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T R O U B L E D   C O M P A N Y   R E P O R T E R     
  
             A S I A   P A C I F I C      

      Wednesday, April 7, 1999, Vol. 2, No. 67

                    Headlines


* C H I N A   &   H O N G   K O N G *

BURLINGAME INTERNATIONAL: Burlingame denies insolvency


* J A P A N *

AMERICAYA SHOE: Americaya ends long walk


* K O R E A *

DAEWOO: Daewoo debt swells
HANIL PHARMACEUTICAL INDUSTRIES: Hanil Pharmaceutical is bankrupt
HANWHA GROUP: Hyundai takes over Hanwha units
HYUNDAI: Hyundai debt swells
LG-HONEYWELL: LG to sell JV stake to partner Honeywell
                       


* P H I L I P P I N E S *

PHILIPPINE AIRLINES: Tan fills US$200m void in PAL rescue bid
PILIPINO TELEPHONE: PLDT denies bailout plan for mobile unit


* T H A I L A N D *

SUPALAI PCL: Supalai starts debt negotiations


=================================
C H I N A   &   H O N G   K O N G
=================================

BURLINGAME INTERNATIONAL: Burlingame denies insolvency
------------------------------------------------------
According to the Hong Kong Standard, struggling property investor
and securities trader Burlingame International said in a written
request dated March 29 to the HongkongBank that the bank's
petition to wind up Burlingame, filed on March 19, should be
withdrawn on the grounds that the firm is not insolvent.

The company said it would ask the court to have the petition
stricken off if the bank disagrees and in any event, the
company's shares, suspended on March 22, are to resume trading
tomorrow at $0.35.

The company said in a statement it was experiencing problems
arising from the reduction in and the inability to renew matured
borrowing facilities from existing bankers, as a result of
enormous falls in the value of all the company's properties being
pledged as collateral.

It added that all of its outstanding debts -- totalling about
$970 million as of the end of Feb 1999 -- were due for immediate
settlement. Its net asset value stood at $385 million.

The company said it had decided to start disposing of certain
properties, including pledged properties, in order to reach a
loan restructuring compromise with its creditor banks.

It also said it had rescinded its June 24 1998 agreement to
purchase the entire issued share capital of Go Gold Ltd from
independent third party Wealth Land Development Corp for a total
of $352.8 million. The company complained that it had not been
able to secure the title to and vacate possession of Go Gold's
properties from WLDC, and demanded that the $90.6 million it had
already paid to WLDC be returned.

Burlingame said last year that its acquisition of Go Gold would
have enabled it to expand its mainland real estate and to obtain
a stable source of income.

The company said it had not yet received any writ from Pacific
Talent in relation to its proposed sale of its 50 per cent stake
in Shanghai Underground Centre Co. The transaction with Pacific
Talent had not yet been completed as the entire sales proceeds
have not yet been received from Pacific Talent, the company said.


=========
J A P A N  
=========

AMERICAYA SHOE: Americaya ends long walk
----------------------------------------
According to the Hong Kong Standard, Americaya Shoe was declared
bankrupt yesterday by the Tokyo district court, with 22.7 billion
yen in liabilities. One of the largest shoe sellers in Japan and
with a history of 74 years, Americaya operated a chain of 109
stores nationwide and had outlets in Hong Kong and Singapore.

A private research agency Teikoku Databank said Americaya was hit
by the country's prolonged economic woes and the consumption
slump, and its shift to cheaper-prices shoes and restructuring
with financial assistance from banks could not save it.

Another research agency said Americaya also suffered substantial
stock losses incurred during the asset-inflated bubble economy
through early 1990s.


=========
K O R E A
=========

DAEWOO: Daewoo debt swells
--------------------------
The Korea Herald reported that the Hyundai Group's debt increased
by 17.5% (10.787 trillion won). The Daewoo Group's debt also
reported a sharp increase of 40.1% (17.136 trillion won). The
article noted that other large chaebols posted declines in total
debt.  

Discrepancy between stated decreases in debt-to-equity ratios and
increases in total debt was reported by a Fair Trade Commission
(FTC) official as attributable mostly to asset revaluations and
capital increases.

The article suggested that the increases in debt indicate half-
hearted restructuring efforts.

Earlier newspaper reports listed Hyundai's end of year 1998 debt
to equity ratio as standing between 320 and 330 percent. Daewoo's
debt to equity ratio has been reported to be between 306 and 386
percent as of December, 1998.


HANIL PHARMACEUTICAL INDUSTRIES: Hanil Pharmaceutical is bankrupt
-----------------------------------------------------------------
The Asian Wall Street Journal reported that the Hanil
Pharmaceutical Industries Company went bankrupt last Friday, when
it failed to honor a maturing debt of 2.1 billion won. The
company has also submitted a letter to the Korea Stock Exchange
stating that it was bankrupt.  


HANWHA GROUP: Hyundai takes over Hanwha units
---------------------------------------------
Hyundai Oil Refining, a unit of South Korea's largest
conglomerate Hyundai Group, signed a formal agreement on the
takeover of Hanwha Group's two units, Hanwha Energy and Hanwha
Energy Plaza. In the agreement, Hyundai Oil Refining will
purchase the oil-refining operations at Hanwha Energy, while the
power-generating business will remain at Hanwha Group, officials
at two companies said. Thus, Hyundai Oil will receive the full
38.817% stake in Hanwha Energy and 100% equity in Hanwha Energy
Plaza that were each held by Hanwha Group, officials said. The
price of the stake purchases will be decided after a due
diligence is completed around June, they added. Of the total debt
of 1.36 trillion won ($1.11 billion) of short-term loans,
creditor banks have agreed to convert 1.22 trillion won to long-
term loans for Hanwha Energy. (Wall Street Journal 05-Apr-1999)


HYUNDAI: Hyundai debt swells
----------------------------
The Korea Herald reported that the Hyundai Group's debt increased
by 17.5% (10.787 trillion won). The Daewoo Group's debt also
reported a sharp increase of 40.1% (17.136 trillion won). The
article noted that other large chaebols posted declines in total
debt.  

Discrepancy between stated decreases in debt-to-equity ratios and
increases in total debt was reported by a Fair Trade Commission
(FTC) official as attributable mostly to asset revaluations and
capital increases.

The article suggested that the increases in debt indicate half-
hearted restructuring efforts.

Earlier newspaper reports listed Hyundai's end of year 1998 debt
to equity ratio as standing between 320 and 330 percent. Daewoo's
debt to equity ratio has been reported to be between 306 and 386
percent as of December, 1998.


LG-HONEYWELL: LG to sell JV stake to partner Honeywell
                       
------------------------------------------------------
South Korea's LG Group said it will sell its 50 percent stake in
high-tech equipment maker LG-Honeywell Co Ltd to US partner  
Honeywell Inc for 15 billion won (US$ 12.3 million). The move
forms part of the  efforts of the huge LG Group, one of South
Korea's top five family-owned conglomerates, to slash its debt-
to-equity ratios under the government's corporate restructuring
crusade. LG said it had signed an agreement on Thursday to hand
over its half share in LG-Honeywell, South Korea's leading
producer of  industrial automation and building control
equipment, to its partner. (AsiaPort 06-Apr-1999)


=====================
P H I L I P P I N E S
=====================

PHILIPPINE AIRLINES: Tan fills US$200m void in PAL rescue bid
-------------------------------------------------------------
A syndicate of Philippine banks that is owed $182 million by
Philippine Airlines conditionally accepted the carrier's revised
rehabilitation plan. Documents released by the nation's
Securities and Exchange commission show the syndicate, led by
Philippine National Bank, will accept the plan on condition that
the airline's restructuring doesn't take more than five years and
an equity injection of $200 million is made no later than June 4.
Among other conditions, the syndicate insists its status as a
secured creditor isn't changed. The syndicate includes Security
Bank, Equitable Banking and Allied Banking, which is owned by
Lucio Tan, the tobacco and beer magnate who has a majority stake
in the airline.

Philippine Airlines is mired in debts exceeding $2.2 billion, and
presented a revised rehabilitation plan to the SEC last month.
The plan already has been conditionally approved by the airline's
main creditors, which include the U.S. Export-Import Bank and a
consortium of European financial institutions, owed a total of
$1.2 billion. For its part, Philippine Airlines hasn't named any
potential investors, though it has said it received some
interest.

The South China Morning Post says in a letter to the SEC, Chase
Manhattan, which is owed about $330 million in unsecured short-
term loans, urged regulators to reject PAL's rehabilitation
plan, as it was grossly unfair and prejudicial to some creditors.
The bank said the rehabilitation plan would convert PAL's
promissory notes with maturities between two months and one year
into a 12-year interest-free loan and it is "tantamount to a
violation of the constitutional prohibition against deprivation
of property without the process of law. The bank also said "it
was precisely because the debts were short term in nature that
creditor Chase Manhattan agreed to grant the loans without
security.

The Hong Kong Standard said that, based on the proposal, payment
of the Chase Manhattan loan is to be stretched to 12 years from
the current period of less than one year. Five per cent of the
overall debt will be paid a year after the plan takes effect,
with the next payment coming only after the 10th year onwards.

The South China Morning Post said that the SEC also released a
statement from General Electric Capital yesterday and two
aircraft lessors backing the rescue plan.


PILIPINO TELEPHONE: PLDT denies bailout plan for mobile unit
------------------------------------------------------------
According to the South China Morning Post and the Hong Kong
Standard, Philippine Long Distance Telephone (PLDT) said it had
no plan to increase its stake in mobile phone subsidiary Pilipino
Telephone (Piltel) and discussions on a mutually acceptable
rehabilitation plan with the creditors of Piltel are still
ongoing. Bailing out Piltel, which owes 35 billion pesos to its
creditors, would increase PLDT's already heavy debt load and risk
a credit-rating downgrade. PLDT has US$400 million of debts
maturing within a year. Piltel told the stock exchange it had not
made a formal proposal to any of its creditors for PLDT to raise
its stake in the company and assume its debts.

Two years ago, Piltel lost its leadership of the mobile-phone
market to Smart Communications due to fraud and unpaid bills.
Piltel and Smart are controlled by First Pacific of Hong Kong,
which bought a controlling stake in PLDT for US$750 million last
November.

PLDT has been trying to persuade Marubeni of Japan to convert
$280 million of Piltel debt into shares in the company. Marubeni
installed 400,000 land lines for Piltel.

The Hong Kong Standard said Piltel still hasn't recovered from
the problems with fraud and delinquent bills that began in 1996.
Its monthly subscriber base has steadily declined, dipping to
about 200,000 at the end of last year.


===============
T H A I L A N D
===============

SUPALAI PCL: Supalai starts debt negotiations
---------------------------------------------
Listed developer Supalai Plc has begun talks on restructuring
debts totalling several billion baht with Thai and foreign
creditors.

The company owes three billion baht in local currency loans and
US$20 million borrowed from a foreign syndicate, according to
Atip Bijanonda, deputy managing director.

The biggest local creditor is Siam Commercial Bank. The foreign
lenders are First Pacific Capital Ltd, the Bank of Nova Scotia
Asia, the National Bank of Kuwait SAK's Singapore branch, the
International Bank of Singapore and the Tat Lee Bank.

Talks with each lender were proceeding at a different pace, Mr
Atip said. Those with BankThai were not making progress because
the bank was undergoing restructuring.

Options in debt restructuring included rollovers, lower interest
rates, a grace period on interest payment, using assets as
payment, and converting debt into shares in Supalai.

"There are no fixed principles on debt restructuring, as the
process depends on sources of debtor income, quality of
collateral, debt-servicing capacity and views of the creditors,"
Mr Atip said.

Slowness in restructuring debt of private companies was mainly
due to a lack of incentives and penalties. If banks could
restructure debt owed by ventures deemed productive, they should
get an incentive to reduce their reserves against loan losses, he
said.

Apart from starting negotiations on loans, Supalai is also taking
with bondholders affected by its decision last year to default on
payments on debentures, with warrants, worth 380 million baht.
Most of the bondholders are Thai financial institutions.

Mr Atip said Supalai had borrowed from some of the finance
companies that were later closed down. The loans were auctioned
by the Financial Sector Restructuring Authority (FRA) last month
and are now held by National Finance & Securities (NFS) and the
Asset Management Corporation (AMC).

This year, Supalai would focus on completing and selling current
projects that could be worth as much as five billion baht, he
said. It would sell units at Supalai Place in Sukhumvit Soi 39,
Supalai Park on Phaholyothin Road and housing estates in Phasi
Charoen, Suwintawong and Rangsit, all in Bangkok.

As part of the plan, the company was converting 200 condominium
units at Supalai Park into serviced apartments. Bookings were
being taken at monthly rentals of between 9,500 and 56,000 baht.
The company expected to achieve 50% occupancy by the end of the
year and would use the income to offset the cost of developing
the unsold units, Mr Atip said. (Bangkok Post 06-Apr-1999)
  

S U B S C R I P T I O N   I N F O R M A T I O N

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