TCRAP_Public/990416.MBX 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      

      Friday, April 16, 1999, Vol. 2, No. 74


* C H I N A   &   H O N G   K O N G *

FOUR SEAS: Ex-chief in Four Seas deal
GUANGZHOU FINANCE: Creditors delay liquidation
SING TAO: Lazard rival split in Sing Tao bid
YUE XIU ENTERPRISES: Yue Xiu plans sale of assets

* J A P A N *

KUMAGAI GUMI: Issues profits warning

* K O R E A *

DAEWOO GROUP: Dismisses S&P downgrade

* M A L A Y S I A *

RENONG BHD: Renong plans asset sales to raise RM3.3b

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

MONDRAGON INTERNATIONAL: Court orders police out of casino
PHILIPPINE AIRLINES: PAL revival plan gains time

C H I N A   &   H O N G   K O N G

FOUR SEAS: Ex-chief in Four Seas deal
Relations between Four Seas Travel's former and new majority
shareholders appear to have improved with ex-chairman Leung Yeung
Lai-ling accepting an invitation to become a company adviser. Mrs
Leung resigned as chairman on Tuesday and signed a six-month
consultancy agreement with Four Seas, according to vice-chairman
Christina Cheung Choi-ngor. Ms Cheung is a director of South
China Strategic Investments, which launched a hostile takeover
bid for the troubled air-ticket vendor after buying the Leungs'
56.9 per cent pledged interest in the market.

A special shareholder meeting yesterday voted to remove Mrs
Leung, her husband Leung Hoi and three directors associated with
them from the Four Seas board.

This followed an acrimonious shareholder meeting last month when
South China appointed eight representatives as Four Seas
directors, sparking outrage from Mrs Leung, who claimed the
appointments were invalid and that she was still chairman.

Ms Cheung said: "Her [Mrs Leung's] resignation was of a friendly
nature and the terms of the consultancy agreement were to both
sides' satisfaction."

Mrs Leung was unavailable for comment yesterday.

However, Ms Cheung said legal action between South China and the
ex-chairman was ongoing. In a $16.6 million lawsuit filed in
February, South China was accused of making unlawful use of
confidential information belonging to Mrs Leung. Last month South
China subsidiary Universal Yield sued the Leungs, alleging they
made personal profits by abusing their positions as directors.

Ms Cheung said although most of Four Seas' debts of about $170
million were of a short-term nature, creditors had not pressed
for early repayment as most of the debts were supported by
property collateral. (South China Morning Post 15-Apr-1999)

A petition for the winding up of GGP International (China)
Limited was presented to the High Court on Mar 22 by Law Kam Ying
of Flat C, 11th Floor, 17 Humbert Street, Mei Foo Sun Chuen,
Kowloon, and the said petition is directed to be heard before the
court at  11:00 am on May 12, and any creditor or contributory of
the said  company desirous to support or oppose the making of an
order on the said petition may appear at the time of hearing by
himself or his counsel for that purpose, and a copy of the
petition will be furnished to any creditor or contributory of the
said company requiring the same by Tam Lee Po Lin, Nina for
Director of Legal Aid, 27th Floor, Queensway Government Offices,
66 Queensway, Hong Kong on payment of the regulated charges for
the same.

GUANGZHOU FINANCE: Creditors delay liquidation
The Asian Wall Street Journal reported that the creditors of the
Guangzhou Finance Company are likely to delay its liquidation.  A
hearing this week was postponed until April 19 per the request of
Guangzhou lawyers.  This hearing, too, is expected to be
adjourned pending the results of the details of the restructuring
plan of Guangzhou International Trust & Investment Corporation
(or GZITIC), the overseas borrowing arm of Guangzhou, the capital
of the Guangdong province.  

Guangzhou Finance is an unlisted Hong Kong wholly owned
subsidiary of GZITIC.

Newspaper reports last month also stated that GZITIC could be
pushed into bankruptcy if its Hong Kong based subsidiary
Guangzhou Finance is liquidated.  A city of Guangzhou official
was cited as stating that the liquidation of Guangzhou Finance
would undermine the restructuring plan of GZITIC.  GZITIC
reportedly has liabilities of about $2.46 billion, with about
$740 million owed to foreign creditors.  GZITIC defaulted in
September last year on a $30 million syndicated loan arranged by
Societe Generale SA.  

Earlier reports stated that representatives of KPMG have been
appointed by the Hong Kong High Court as provisional liquidators
of Guangzhou Finance Company.  The bankruptcy petition for
Guangzhou Finance was filed by a syndicate of banks led by the US
based Bankers Trust Co., which made a $300 million loan to the

SING TAO: Lazard rival split in Sing Tao bid
United States billionaire Sam Zell has distanced himself from a
consortium opposing a takeover bid for Sing Tao Holdings. A
spokesman for Mr Zell said last night he was no longer actively
seeking to buy an interest in the loss-making publisher after the
consortium's bid fell through last month. "We are not active in
pursuing the Sing Tao deal. Instead, we are watching what's going     
on," the spokesman said from Chicago.

The consortium lost out to investment fund Lazard Asia Fund last
month when Sing Tao chairman Sally Aw Sian accepted Lazard's
offer to avoid imminent bankruptcy. The consortium has attempted
to sabotage Lazard's offer by complaining to the Securities and
Futures Commission last week on the grounds that Lazard's offer
is too generous to Ms Aw.

ICC also has bought Sing Tao shares in the market to raise its
influence before a special general meeting on April 29 to seek
minority shareholders' approval for Lazard's proposed "special
arrangements" for Ms Aw.

The Ho family of Hong Kong Tobacco is expected to justify its
support of Lazard's offer today. General manager Charles Ho Tsu-
kwok is expected to disclose his holding of about one million
shares bought six years ago when Sing Tao was trading at more
than $10. Last month, Mr Ho's vehicle Yosham suspended legal
action against Ms Aw for $274 million in unpaid debts, paving the
way for the completion of Lazard's takeover. Yosham filed a
bankruptcy petition against Ms Aw in January. It is understood
Lazard's decision to launch a general offer was a key reason for
Mr Ho's support.

Sing Tao adviser Platinum Securities said Lazard was the only
party willing to make a general offer. The general offer will be
launched only if special arrangements offered to Ms Aw are
approved at the April 29 meeting.

A "no" vote will see Lazard's bid fall through.

Lazard is buying 50.02 per cent of Sing Tao from Ms Aw and is
offering her assistance via a loan and an annual consultant's fee
of $9 million for six years. (South China Morning Post

YUE XIU ENTERPRISES: Yue Xiu plans sale of assets
Yue Xiu Enterprises (Holdings) plans to sell interest in GZI
Transport worth between US$40 million and US$60 million as part
of its asset-disposal plan to meet debt obligations. The Hong
Kong investment arm of the Guangzhou municipal government
recently told its creditor banks that it would cash in from the
sale of core and non-core businesses in the next 18 months. It
asked creditors to extend loan repayments for 18 months during
which interest would be paid.

The firm told bankers it had only about HK$666 million in cash as
of March 16, but had to meet debt obligations of HK$4.98 billion
this year, including HK$2.42 billion of syndicated loans. Its
assets stood at HK$21.83 billion as of December and liabilities
amounted to HK$14.02 billion, including bank borrowings of about
HK$9.41 billion.

Yue Xiu spokesman Sofia Yan Yuk-fung said the firm's financial
position remained normal with assets grossly exceeding
liabilities. Ms Yan said the firm would not sell its assets at
rock-bottom prices although analysts have expressed reservation
about investor interest. She said the firm would continue to
discuss loan refinancing with banks.

Its listed arms, Guangzhou Investment and GZI Transport,
successfully refinanced US$68.75 million of maturing loans in the
first quarter. It had improved its transparency amid a tough
environment for mainland corporates to raise funds following the
collapse of the Guangdong International Trust and Investment Corp
last October.

Bankers said their big concern was that they would be unfairly
treated with the firm repaying some loans and not others.

The banking syndicate of a US$65 million loan, which is in
discussions with Yue Xiu about extending a May 8 deadline, is
concerned it will be disadvantaged if, for example, Yue Xiu
repays a US$20 million instalment due on May 23 on a US$200
million syndicated loan. (South China Morning Post 15-Apr-1999)

J A P A N  

KUMAGAI GUMI: Issues profits warning
Kumagai Gumi, the Japanese contractor, yesterday issued a profits
warning, underscoring the severe conditions in the domestic
construction sector. The company blamed the drop in estimated
earnings on a fall in private sector capital spending in the
second half of the year.

Kumagai Gumi cut its estimate of non-consolidated pre-tax profits
before exceptionals from Y8bn to Y7.4bn ($62m) for the year
ending March 31, 1999. The company also revised down net profit
forecast at the parent level from Y2bn to Y1.5bn, against a loss
of Y217bn last year. (Financial Times 14-Apr-1999)


DAEWOO GROUP: Dismisses S&P downgrade
Daewoo Group yesterday brushed off concerns it was heading for a
crisis after Standard & Poor's downgraded its flagship company.  
But shares of most of the listed affiliates of the Daewoo Group,
South Korea's second largest conglomerate, chaired by Kim Woo-
chong, fell on the local stock market as the downgrade fanned
fears about the group's debt levels.

Daewoo said the group was merely facing "a temporary liquidity
freeze". S&P said on Tuesday its downgrade of Daewoo Corp's
credit to B minus from B reflected mounting pressure on the
company's credit quality stemming from its rising debt leverage.
(South China Morning Post 15-Apr-1999)


RENONG BHD: Renong plans asset sales to raise RM3.3b
Renong, Malaysia's biggest industrial group, plans to raise at       
least 3.3 billion Malaysian ringgit (S$1.47 billion) from the       
sale of its property, monorail and other businesses as it looks
to pare debt.

Renong's toll unit Projek Lebuhraya Utara Selatan (Plus) last
month said it would sell a record RM8.4 billion in bonds to bail
out the parent company. The deal requires Renong to raise RM8.75
billion to repay Plus by 2006, when the bonds mature.

"It's going to be quite difficult to raise that kind of money,"
said Choong Wai Kee, an analyst at JM Sassoon Research Sdn.

According to documents obtained by Bloomberg News, Renong will
sell shares, debt and assets, including its stake in monorail
operator Projek Usahasama Transit Ringan Automatik, to raise the
funds. The documents were presented to Renong creditors.

For Renong, which is saddled with debts worth RM20 billion, the
asset sales will mean leaner, more focused operations. It will
also mark the end of its ambitious expansion into everything from
banking and construction to oil, gas, public transportation,
telecommunications and hotels. Other major assets Renong is
likely to sell include its stake in property company Prolink
Development Sdn Bhd and banking firm Commerce Asset Holding.

Prolink, which is 64 per cent owned by Renong, is building a
10,800-hectare city known as Nusajaya near the Causeway. The
market value of Renong's stake in Prolink is estimated at RM2.6
billion. (Bloomberg and Singapore Business Times 15-Apr-1999)


MONDRAGON INTERNATIONAL: Court orders police out of casino
The Asian Wall Street Journal reported that policemen under
orders of the Clark Development Corporation have not vacated a
Mondragon International Philippines Inc. casino despite a
restraining order on March 25 by the Philippines Supreme Court.  
Clark Development (the government agency managing the Clark
special economic zone), is the owner of this property which was
leased to Mondragon.

Mondragon's lease on the Mimosa tourism estate was terminated in
December last year due to unpaid rents of 465 million pesos.  
Mimosa, a 250 hectare estate in the Clark special economic zone
has a casino, hotel, and golf course.  This estate is reportedly
the main driver of Mondragon's earnings.  The article also stated
that Mondragon argues that it only owes 47 million pesos.  

Mondragon has filed motions to hold both Clark Development and
the Philippine National Police in contempt of court.

PHILIPPINE AIRLINES: PAL revival plan gains time
Philippine Airlines, the stricken national flag carrier, looks
set to gain a little more time to seek support for its revival
plan from creditors and potential investors. The Securities and
Exchange Commission, the market regulator, indicated yesterday it
would extend an April 15 deadline for its ruling on the plan to
the end of the month or the first week in May. The move came as
other creditors, including Boeing and the International Air
Transport Association, the industry's umbrella body, rejected the
revival plan which calls for a restructuring of PAL's $2bn debt
burden and the infusion of $200m of new capital.

Further muddying the outlook for the revival plan are tensions
between Lucio Tan, the Filipino-Chinese tycoon who is the
majority shareholder in PAL, and the airline's new management
recruited from Cathay Pacific, the Hong Kong-based carrier.

Perfecto Yasay, the SEC chairman, said yesterday the extension
would allow PAL receivers more time to seek the capital
injection. Under the revival plan, PAL must receive the $200m
capital injection by June 4. Government officials say Mr Tan has
agreed to provide the money if no other investor can be found.

Mr Yasay also said the SEC would talk with creditors opposing the
revival plan later this week. These include Boeing, which
rejected the plan over a dispute over PAL's refusal to recognise
its claims worth $127m related to a 1996 order for seven Boeing
747-400s as part of an over-ambitious fleet expansion programme.
PAL says it had cancelled the order. (Financial Times

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

Troubled Company Reporter -- Asia Pacific is a daily
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Copyright 1999.  All rights reserved.  ISSN: 1520-9482.  

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