TCRAP_Public/990429.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      

      Thursday, April 29, 1999, Vol. 2, No. 82

                    Headlines


* C H I N A   &   H O N G   K O N G *

CHINA EASTERN: Price war takes heavy toll on China Eastern
LUOYANG GLASS: Falls further into the red
STAR TELECOM: Vows to fight insolvency bid by Nortel


* I N D O N E S I A *

PT MULIA INDUSTRINDO: Debt restructuring agreed to in principle
SALIM GROUP: Creditors don't approve plan; restructuring unravels
SALIM GROUP: Sells UIC stake to Filipino in unconditional deal


* J A P A N *

NIPPON ENTERPRISE: Given court approval of liquidation procedures
                       
SANWA BANK: Banks warn of heavy losses
SASAKI GLASS: Sasaki files for protection from creditors
YASUDA TRUST: Banks warn of heavy losses


* K O R E A *

DAEWOO: Korean president threatens receivership
HALLA GROUP: Decision to cancel contract with Rothschild
HYUNDAI: Korean president threatens receivership
KOREA FIRST BANK: Seoul tries to dispel fears on sale
       
LG: Korean president threatens receivership

SAMSUNG: Korean president threatens receivership
SK: Korean president threatens receivership


* M A L A Y S I A *

GOLDEN HOPE: To revamp plantation sector


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

BENGUET CORP: Benguet gets reprieve from creditors
PHILIPPINE AIRLINES: Government may bail out PAL
PHILIPPINE ASSOCIATED: Firm bid attracts Cojuangco, foreign firms
PILIPINO TELEPHONE: Drops proposal for 3-year grace on interest


* S I N G A P O R E *

CREATIVE TECHNOLOGIES: Creative Q3 net to fall 35-45%
SEMPCORP: S$150mil provision turns profit into S$57mil loss


* T H A I L A N D *

KIATNAKIN FINANCE: Kiatnakin recovers with B248m profit
NAKORNTHON BANK: Standard Chartered wins Nakornthon race
SRITHAI SUPERWARE: Deal maintains family's holding
THAI MILITARY BANK: Military Bank eyes $3b from securities sale


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

CHINA EASTERN: Price war takes heavy toll on China Eastern
----------------------------------------------------------
China Eastern Airlines Corp suffered a worse than expected 481
million yuan (about HK$447 million) net loss last year after
falling victim to a price war and slowdown in air traffic.
A deteriorating operating environment saw the company's loss
swell in the second half following a 33.23 million yuan first-
half decline. The company, one of the mainland's biggest
airlines, made a net profit of 635.13 million yuan in 1997.

Earlier this month rival China Southern Airlines announced a net
loss of 543.85 million yuan last year.

The poor results follow a disastrous year for the mainland's
aviation industry, which recorded a combined loss of more than
six billion yuan last year. The loss, the first such sector-wide
loss in many years, was due to the weakening economy and price
competition.

China Eastern warned the regional financial crisis would extend
its negative impact on the market and its operations.

Last year, China Eastern saw total revenues of its main business
fall about 5 per cent year on year to 7.79 billion yuan, while
operating costs soared about 12 per cent to 7.99 billion yuan.
(South China Morning Post 28-Apr-1999)


LUOYANG GLASS: Falls further into the red
-----------------------------------------
Sagging product prices and exceptional charges have driven H
share Luoyang Glass to a worse than expected net loss of 363.36
million yuan (about HK$338.28 million) for last year. It was the
company's second successive year in the red, following a net loss
of 219.43 million yuan in 1997. The loss could place a cloud over
the future of the company's management.

Beijing brought in rules recently that could see managers of
state-owned enterprises -- including H shares -- dismissed if the
companies make two years of losses due to bad management.

However, chairman Guo Xiaohuan said he had not been notified of
any possible management changes.

The company's loss was mainly attributable to sharp falls in
product prices in recent years due to oversupply, he said.

Luoyang Glass booked an exceptional loss of about 180 million
yuan, including about 36.41 million yuan for money deposited with
financially troubled Guangzhou International Trust and Investment
Corp (Gzitic). This accounted for non-recovery of 25 per cent of
145 million yuan deposited with Gzitic.

The company also made provisions of about 74.44 million yuan for
receivables and 61.83 million yuan for bad debts for trade
debtors.

It reported about 5 per cent increase in turnover to 624.12
million yuan in the period.

The loss per share widened to 51.9 fen from 31.9 fen. The company
did not propose any final dividend.

Mr Guo did not expect the company would need to make more
provisions for the Gzitic deposit. (South China Morning Post 28-
Apr-1999)


STAR TELECOM: Vows to fight insolvency bid by Nortel
----------------------------------------------------
Star Telecom International Holdings and its parent China
Strategic Holdings last night said they would fully defend a bid
by Northern Telecom (Asia), or Nortel, to have Star Telecom
declared insolvent. The move by Nortel has added fuel to a legal
clash between the two firms, as Star Telecom has previously filed
writs claiming loss and damage suffered from alleged breached
contracts. A June court date has been set for Nortel's petition
against Star Telecom.

Star Telecom and China Strategic said the subject matter of the
petition related to an alleged claim for about US$13.7 million
regarding goods supplied by Nortel -- a matter they said was
already the subject of a dispute between Star Digitel, a Star
Telecom subsidiary, and Nortel.

In earlier writs, Star Telecom and Star Digitel have claimed
Nortel misrepresented the availability of financing for equipment
purchases, claiming it "never intended to grant any deferred
payment facility without recourse".

Star Telecom and China Strategic said Star had the resources to
satisfy the claim, and that the petition would not have a
material impact. (South China Morning Post 28-Apr-1999)


=================
I N D O N E S I A
=================

PT MULIA INDUSTRINDO: Debt restructuring agreed to in principle
---------------------------------------------------------------
The Asian Wall Street Journal reported that PT Mulia Industrindo
had clinched an agreement in principle with its creditors to
restructure its debt.  PT Mulia Industrindo, a glass and ceramics
manufacturer, pledges to repay all of its $550 million in debt
through a debt-rescheduling arrangement, according to the paper.  
The debt will be divided into two tranches with different
repayment conditions.

The first tranche, which involves 80 percent of the debt, or $440
million, will be turned into a eight-year loan with step-up
interest rate features.

Mulia Industrindo will only service interest payments in the
first two years and will start making principal payment in the
third year.  To encourage rapid repayment of the first tranche,
the paper reported, interest rates will edge up gradually after
the second year.

The second tranche, comprising $110 million in debt, will be paid
back on an irregular basis in the next eight years, whenever the
company has excess cash, according to the report.


SALIM GROUP: Creditors don't approve plan; restructuring unravels
-----------------------------------------------------------------
The Asian Wall Street Journal reported today in a front page
story that part of Indonesia's Salim Group's restructure plan to
sell 30 percent of its huge instant-noodle maker, PT Indofood
Sukses Makmur, fizzled away after some Indofood creditors failed
to approve the purchase by Nissin Food Products Co. of Japan.  
Nissin Food didn't issue a statement, according to the paper, but
a banker explained the cancelled deal being the result of some
creditors possibly having sought changes in loan-repayment
schedules that Nissin was unwilling to make.

The Salim Group's founder was a close friend of former President
Suharto, and has reportedly been struggling with debt since the
fall of President Suharto last May.


SALIM GROUP: Sells UIC stake to Filipino in unconditional deal
--------------------------------------------------------------
The Salim group has found another buyer in Filipino mandarin John
Gokongwei for its 23 per cent stake in United Industrial
Corporation, after Hongkong's Payson Cha walked away from an
earlier deal. Mr Gokongwei, 71, who is no stranger to Singapore
-- he is the developer of Leedon Heights off Holland Road and
still owns 72 of its 314 units -- is paying the same price as Mr
Cha -- $310.87 million or $1 a share for the 23 per cent.

In an announcement yesterday, the Salim Group's Singapore-based
investment vehicle KMP United Ventures said it had entered into
an unconditional agreement to sell to Telegraph Developments Ltd
(TDL) the 310.87 million shares in UIC at $1 each. A deposit of
US$20 million (S$34 million) has been paid to Citibank which is
acting as escrow agent for both the vendor and the purchaser
pending completion, scheduled for May 28. British Virgin Islands-
incorporated TDL is affiliated to Mr Gokongwei's main Philippines
listed vehicle, JG Summit Group.

Goldman Sachs, whom many had thought was going after the
Salim stake for itself, said yesterday it was the financial
adviser for the transaction. It said the Filipino party made the
purchase because it found the price and the assets "very
attractive".

However, several observers have suggested that Mr Gokongwei's
purchase of the UIC shares might be tied to deals in the
Philippines between JG Summit and the Salim's First Pacific
Group which is redeveloping Fort Bonifacio, a huge site in
Makati, Metro Manila. Cebu-born Mr Gokongwei is one of Asia's
richest men worth an estimated US$2 billion (S$3.4 billion).

JG Summit is one of the Philippines' most powerful conglomerates
with interests in food manufacturing, department stores, property
development, hotels, banking, media, telecommunications and an
airline. His son and heir, Lance, was educated at Anglo-Chinese
School in Singapore.

It is not known how Mr Gokongwei is going to finance his
purchase, but his recent sale of his cement operations to Cemex
SA of Mexico for about US$250 million could have provided him
with some liquidity,

Tan Kong King, who is also KMP's managing director, said
yesterday that JG Summit was not the only suitor for the stake
after Mr Cha opted out reportedly because of a breach of a profit
warranty. (Singapore Business Times 28-Apr-1999)


=========
J A P A N  
=========

NIPPON ENTERPRISE: Given court approval of liquidation procedures
                       
-----------------------------------------------------------------
Nippon Enterprise Development Corp. has received court approval
for starting the procedures for liquidating itself, Teikoku Data
Bank Ltd. said Tuesday. NED, a major venture capital firm
affiliated with failed Long-Term Credit Bank of Japan, received
the approval from Tokyo District Court on April 9, the credit
research agency said. NED left liabilities of about 510 billion
yen.

Eight NED affiliates also received court approval for launching
liquidation  procedures on April 9.

NED tumbled into difficulty following the collapse of asset-
inflated economic "bubbles" in the early 1990s, which left the
company with mountains of problem loans.

NED handed over its venture capital operations to an investment
partnership set up by Yasuda Fire and Marine Insurance Co. early
this year after LTCB was placed under state control due to its
insolvency late last year. (Jiji Press English News 27-Apr-1999)


SANWA BANK: Banks warn of heavy losses
--------------------------------------
Two leading banks warned yesterday they were facing heavier than
expected losses for the past year to March, as they struggle with
poor profitability and heavy bad loans.

Sanwa Bank said it was facing a heavy 470 billion yen (about
HK$30 billion) group net loss for the past year to March. It was
the second time in two months that Sanwa, one of Japan's top city
banks, has warned its results will be worse than expected.

Sanwa took a 182.4 billion yen net loss the previous year. The
smaller Yasuda Trust and Banking said it would now take a 400
billion yen group net loss, against a 94.5 billion yen loss the
previous year. (South China Morning Post 28-Apr-1999)


SASAKI GLASS: Sasaki files for protection from creditors
--------------------------------------------------------
The Asian Wall Street Journal reported that Sasaki Glass Co.
filed for court protection from creditors under Japan's
corporate-bankruptcy law. The move marks the first failure of a
company listed in the first section of the Tokyo Stock Exchange
this year, and the third bankruptcy of a listed company overall,
according to the report.

Sasaki Glass said its outstanding debt, including that of six
subsidiaries, totals 46.65 billion yen.  In December, according
to the Asian Wall Street Journal story, the company asked several
banks to forgive 12 million yen in loans as part of a
restructuring plan, but failed to reach an agreement.  The report
stated that due to liquidity problems, the company could no
longer wait for an agreement to be reached.


YASUDA TRUST: Banks warn of heavy losses
----------------------------------------
Two leading banks warned yesterday they were facing heavier than
expected losses for the past year to March, as they struggle with
poor profitability and heavy bad loans.

Sanwa Bank said it was facing a heavy 470 billion yen (about
HK$30 billion) group net loss for the past year to March. It was
the second time in two months that Sanwa, one of Japan's top city
banks, has warned its results will be worse than expected.

Sanwa took a 182.4 billion yen net loss the previous year. The
smaller Yasuda Trust and Banking said it would now take a 400
billion yen group net loss, against a 94.5 billion yen loss the
previous year. (South China Morning Post 28-Apr-1999)


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

DAEWOO: Korean president threatens receivership
-----------------------------------------------
The Korea Herald reported in a front page story that Korean
President Kim Dae-jung stated that if the nations largest family
own conglomerates, or chaebols, fail to faithfully implement
their reform programs they would be placed under court
receivership.  The president said the government would step in if
necessary for the protection of public interest and employ
workout programs or court receivership.

Last December, the five largest chaebols signed an agreement with
the Korean government that called for, among other things, the
reduction of their debt-to-equity ratios to below 200 percent by
the end of 1999.  

In Korea, a workout procedure is aimed at helping firms hit by
temporary liquidity shortages to regain financial health and
competitiveness through debt relief and restructuring programs
offered by creditors.  It is also designed to reduce banks' non-
performing loans by improving borrowers' debt payment
capabilities.  The workout can result in the shareholders being
asked to reduce capital and the disposal of unprofitable assets
and subsidiaries.  Furthermore, there is a compulsory shake-up of
the top management of the "workout companies".

The conglomerates referred to in the article and their last
year's end of year (EOY) debt-to-equity ratios are:

                   Debt-to-Equity Ratio  
Conglomerate            EOY-1998

Daeyou                     306%
Hyundai                    323%
LG                         360%
Samsung                    280%
SK                         378%


HALLA GROUP: Decision to cancel contract with Rothschild
--------------------------------------------------------
The recent decision by the Seoul Debt Restructuring Fund (SDRF)
to take back its funds entrusted to Rothschild Inc. of the United
States, may damage Korea's image and credibility, financial
analysts said. Rothschild, the world's largest independent  
investment bank, has been managing 600 billion won ($500 million)
from SDRF and used 59.3 billion won ($49.7 million) in bridge
loans to revive the ailing Halla Group, to which it is committed
to provide $1 billion in rehabilitation funds. However, SDRF's
board last Thursday suddenly announced it will cancel the fund
entrustment contract with Rothschild. The decision came after
media reports alleged that Rothschild broke its promise by using
part of the SDRF funds to fulfill its commitment to Halla.

According to the reports, Halla's creditor banks wrote off 57.9
percent of Halla's debts last year on the condition that
Rothschild bring in $1 billion from abroad to help rehabilitate
the insolvent group. But Rothschild, the reports claim, injected
$100 million from the SDRF funds into Halla, thus failing to
fulfill the contract with Halla's creditor banks. SDRF is a fund
established by 22 domestic banks to support companies under
restructuring after the 1997 financial crisis. However,
Rothschild officials said that its contract with the Korean banks
does not contain any provision to the effect of bringing in all
of the $1 billion from abroad. "We didn't make any pledge to that
effect," a Rothschild official said.

SDRF officials confirmed this. "The contract does not specify
that Rothschild should not use the funds we had entrusted to
salvage Halla," said an official on the condition of anonymity.
But SDRF's board decided to cancel its contract with Rothschild,
probably to avoid being involved in a controversy. "The board
wanted to find a new investment bank because it thought that the
controversy surrounding Rothschild will seriously impair its
capability to manage the fund in Korea," he said. He added that
the contract has a clause allowing the SDRF to cancel its deal
with Rothschild if it notifies the investment bank of its
decision three months ahead.

"If the contract with Rothschild is canceled, it will be very
regrettable for both sides. So far Rothschild has managed the
SDRF funds efficiently within the given guidelines," the official
said. Wilbur Ross, chairman of the Rothschild Fund who recently
visited Korea, said he was very upset by the SDRF's decision. "I
cannot understand it because Rothschild has conducted business
completely in accordance with the legal guidelines," he said.
"The way we managed the SDRF funds is totally legal and very
common in the United States and Japan," he said. "The creditor
banks did not ask us to raise the funds overseas, and they wrote
off 57.9 percent of Halla's debts (3.24 trillion won or $2.6
billion) by themselves without attaching any conditions."

"I am afraid this decision by the SDRF's board may discourage
foreign investment in Korea in the future," Ross said. "The
purpose of the bridge loan for Halla was to save its insolvent
companies from going bankrupt and therefore it is meaningless to
insist on financing it from overseas." He contended. If canceling
the contract damages Korea's credibility, which is very likely,
the SDRF board will be to blame, an industry watcher said. (Korea
Herald 28-Apr-1999)


HYUNDAI: Korean president threatens receivership
------------------------------------------------
The Korea Herald reported in a front page story that Korean
President Kim Dae-jung stated that if the nations largest family
own conglomerates, or chaebols, fail to faithfully implement
their reform programs they would be placed under court
receivership.  The president said the government would step in if
necessary for the protection of public interest and employ
workout programs or court receivership.

Last December, the five largest chaebols signed an agreement with
the Korean government that called for, among other things, the
reduction of their debt-to-equity ratios to below 200 percent by
the end of 1999.  

In Korea, a workout procedure is aimed at helping firms hit by
temporary liquidity shortages to regain financial health and
competitiveness through debt relief and restructuring programs
offered by creditors.  It is also designed to reduce banks' non-
performing loans by improving borrowers' debt payment
capabilities.  The workout can result in the shareholders being
asked to reduce capital and the disposal of unprofitable assets
and subsidiaries.  Furthermore, there is a compulsory shake-up of
the top management of the "workout companies".

The conglomerates referred to in the article and their last
year's end of year (EOY) debt-to-equity ratios are:

                   Debt-to-Equity Ratio  
Conglomerate            EOY-1998

Daeyou                     306%
Hyundai                    323%
LG                         360%
Samsung                    280%
SK                         378%


KOREA FIRST BANK: Seoul tries to dispel fears on sale
       
-----------------------------------------------------
The South Korean government and Newbridge Capital Ltd. attempted
Tuesday to dispel speculation that the U.S. company's purchase of
debt-ridden Korea First Bank was in danger of collapse. Newbridge
said it might not meet the deadline of Friday for completing the  
deal but insisted that the agreement would be concluded. For its
part, the government, which owns 94 percent of Korea First Bank,
reiterated its staunch commitment to the transaction. The success
of the deal is crucial to reinforcing the perception that South  
Korea is willing to permit foreign ownership of some major
companies after years of vigorous resistance.

Some analysts say the government will even compromise on sticking
points for fear that losing the Newbridge investment would
undermine other efforts at luring foreign capital, regarded as
essential to economic recovery.

But bankers said the deal no longer ranked as the unique prospect
it was when it was proposed Dec. 31. At the time, Newbridge was
the first foreign company to agree in principle to take over a
South Korean bank. Under a memorandum of understanding, Newbridge
agreed to purchase 51 percent of the bank's equity, reportedly
for $600 million.

Since then, Hongkong & Shanghai Banking Corp. has agreed to pay
$900 million for Seoul Bank, another troubled entity largely
owned by the government, and Goldman, Sachs & Co. has agreed to
invest $500 million in Kookmin Bank.

The negotiations for Korea First Bank are believed to be
considerably more complicated than the others. Newbridge was
reported to have found that the bank's debts were higher than
first believed. (International Herald Tribune 28-Apr-1999)

Meanwhile, it was reported Newbridge Capital Co. hinted that the
conclusion of its takeover deal with Korea First Bank may go
beyond the April 30 deadline. (Asia Pulse 28-Apr-1999)


LG: Korean president threatens receivership
-------------------------------------------
The Korea Herald reported in a front page story that Korean
President Kim Dae-jung stated that if the nations largest family
own conglomerates, or chaebols, fail to faithfully implement
their reform programs they would be placed under court
receivership.  The president said the government would step in if
necessary for the protection of public interest and employ
workout programs or court receivership.

Last December, the five largest chaebols signed an agreement with
the Korean government that called for, among other things, the
reduction of their debt-to-equity ratios to below 200 percent by
the end of 1999.  

In Korea, a workout procedure is aimed at helping firms hit by
temporary liquidity shortages to regain financial health and
competitiveness through debt relief and restructuring programs
offered by creditors.  It is also designed to reduce banks' non-
performing loans by improving borrowers' debt payment
capabilities.  The workout can result in the shareholders being
asked to reduce capital and the disposal of unprofitable assets
and subsidiaries.  Furthermore, there is a compulsory shake-up of
the top management of the "workout companies".

The conglomerates referred to in the article and their last
year's end of year (EOY) debt-to-equity ratios are:

                   Debt-to-Equity Ratio  
Conglomerate            EOY-1998

Daeyou                     306%
Hyundai                    323%
LG                         360%
Samsung                    280%
SK                         378%


SAMSUNG: Korean president threatens receivership
------------------------------------------------
The Korea Herald reported in a front page story that Korean
President Kim Dae-jung stated that if the nations largest family
own conglomerates, or chaebols, fail to faithfully implement
their reform programs they would be placed under court
receivership.  The president said the government would step in if
necessary for the protection of public interest and employ
workout programs or court receivership.

Last December, the five largest chaebols signed an agreement with
the Korean government that called for, among other things, the
reduction of their debt-to-equity ratios to below 200 percent by
the end of 1999.  

In Korea, a workout procedure is aimed at helping firms hit by
temporary liquidity shortages to regain financial health and
competitiveness through debt relief and restructuring programs
offered by creditors.  It is also designed to reduce banks' non-
performing loans by improving borrowers' debt payment
capabilities.  The workout can result in the shareholders being
asked to reduce capital and the disposal of unprofitable assets
and subsidiaries.  Furthermore, there is a compulsory shake-up of
the top management of the "workout companies".

The conglomerates referred to in the article and their last
year's end of year (EOY) debt-to-equity ratios are:

                   Debt-to-Equity Ratio  
Conglomerate            EOY-1998

Daeyou                     306%
Hyundai                    323%
LG                         360%
Samsung                    280%
SK                         378%


SK: Korean president threatens receivership
-------------------------------------------
The Korea Herald reported in a front page story that Korean
President Kim Dae-jung stated that if the nations largest family
own conglomerates, or chaebols, fail to faithfully implement
their reform programs they would be placed under court
receivership.  The president said the government would step in if
necessary for the protection of public interest and employ
workout programs or court receivership.

Last December, the five largest chaebols signed an agreement with
the Korean government that called for, among other things, the
reduction of their debt-to-equity ratios to below 200 percent by
the end of 1999.  

In Korea, a workout procedure is aimed at helping firms hit by
temporary liquidity shortages to regain financial health and
competitiveness through debt relief and restructuring programs
offered by creditors.  It is also designed to reduce banks' non-
performing loans by improving borrowers' debt payment
capabilities.  The workout can result in the shareholders being
asked to reduce capital and the disposal of unprofitable assets
and subsidiaries.  Furthermore, there is a compulsory shake-up of
the top management of the "workout companies".

The conglomerates referred to in the article and their last
year's end of year (EOY) debt-to-equity ratios are:

                   Debt-to-Equity Ratio  
Conglomerate            EOY-1998

Daeyou                     306%
Hyundai                    323%
LG                         360%
Samsung                    280%
SK                         378%


===============
M A L A Y S I A
===============

GOLDEN HOPE: To revamp plantation sector
----------------------------------------
BRITAIN: Golden Hope Plantations Bhd plans to undertake an
international reorganisation of its plantation group of
companies, which will lead to the liquidation of companies
incorporated in Britain. In a statement on Monday, Golden Hope
said the move is to streamline the historically complex structure
of its group and avoid a duplication of activities. The company
added that this will consolidate its plantation activities under
its Malaysian subsidiaries and will rationalise group structure
to enhance efficiency and productivity.

The proposed reorganisation will involve 16 plantation companies
and five intermediate holding companies which are incorporated in
Britain and one plantation company incorporated in Malaysia. The
companies are wholly-owned by Golden Hope and are involved in
plantation related activities, many of which are mirror image of
each other.

Among the companies are Holyrood Rubber Plc, The London Asiatic
Rubber & Produce Co Ltd, The Petaling Rubber Estates Ltd, Kinta
Kellas Rubber Estates Plc and Bakasawit Sdn Bhd.

Golden Hope said under the reorganisation, the complex cross
holding structure as well as much of the duplication in
activities will be eliminated. To achieve this, the company will
transfer the businesses and assets of all the wholly-owned
companies to Golden Hope Plantations (Peninsular) Sdn Bhd and the
investments held by the said companies to Tegas Setia Sdn Bhd.
Golden Hope Plantations (Peninsular) and Tegas Setia are wholly-
owned subsidiaries of Golden Hope.

The company said the consideration for the transfer will be
determined by reference to the companies audited net book values
as at June 30, 1999 in exchange for new shares to be issued at
par. Golden Hope said it will then acquire the shares at cost.
(Bernama and The Star Online 28-Apr-1999)


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

BENGUET CORP: Benguet gets reprieve from creditors
--------------------------------------------------
Listed mining firm Benguet Corp. and its 17 creditor banks have
agreed in principle to extend the payment of the company's 1.6-
billion-peso debt for another three years. BusinessWorld sources
privy to the negotiations, however, said the parties need to put
the agreement in writing first for it to be formalized. The
creditors though were not as happy about the other provisions of
Benguet's proposed debt restructuring plan.

A source from one of the firm's creditor banks clarified the
banks have not yet accepted the mining firm's proposed debt
restructuring plan as a whole. In particular, they are wary of a
major provision in the plan concerning the sale of the firm's
nonperforming assets to pay off a portion of its debts. He
confirmed though that while "the banks are still reviewing the
proposal they have generally agreed in principle to extend the
maturity of the loans and it only needs to be put in writing."

Another source said the banks are having second thoughts
accepting the plan because of some "uncertainty." For one thing,
he said "the assets ... may not be sold for some time. There is
uncertainty in disposing the assets." Also, he said a divestment
in assets will diminish the creditor banks' collateral position.

"The banks' loans to Benguet Corp. are secured by a mortgage
trust indenture (MTI) agreement... Creditors' claims on the
assets are pro-rata, depending on the level of their exposure to
the company," the source said. MTI is a loan arrangement which
pools a company's assets to be used as collateral for its
remaining debts.

"But if they (Benguet Corp.) have buyers, we may release the
asset from the MTI and get the payment directly," the source
added.

The other terms of the proposed plan include the capitalization
of unpaid interest wherein the interest will form part of
principal; a condonation of penalties; and the payment of the
principal in lump sum at the end of the third year.

"Creditors cannot agree to the condonation of penalties... Banks
are also hurting... The banks will submit a counterproposal," the
source said, adding the company asked for the banks' comments
last week.

Out of Benguet's 1.6-billion-peso debt, the current portion of
its long-term debt stood at 1.1 billion Philippine pesos (PhP).
The loans were scheduled to mature last year.

The creditor-banks with the biggest exposure to the firm include
Rizal Commercial Banking Corp., which has exposure of $4.69
million plus PhP193,000; Philippine National Bank, $4.1 million
and PhP113.9 million; Union Bank, $1.99 million and PhP56
million,; and United Coconut Planters Bank, $2 million and PhP7
million. The mining firm also has debts to AsianBank amounting to
$259,000; Asiatrust Development Bank, PhP3 million; Banque
National de Paris, $1 million; Credit Lyonnaise, $1.8 million;
Equitable Bank, PhP6.4 million; HSBC, PhP14.4 million; Land Bank
of the Philippines, PhP45 million; Philippine Banking Corp.,
$259,000; Security Bank, $466,000 and PhP25.9 million;
Government Service Insurance System, PhP48 million; Solid Banking
Corp., PhP5 million; Standard Chartered Bank, PhP5 million; and
Urban Bank, $806,000. The firm also owes Lazard Freres & Co.
$777,000.

Benguet Corp.'s problems started in 1993 when it was forced to
declare a debt moratorium after a creditor bank refused to renew
its credit facility. The company was also forced to sell some of
its assets to pay of a portion of its debts, including its
building in Ortigas and an aircraft. Meanwhile, another source
said the firm along with the Presidential Commission on Good
Government (PCGG) and Palm Avenue have already given their
approval to reinvest funds turned over to the PCGG as the present
holder of the 28% sequestered shares of the company. The funds
consist of dividends owed to Palm Avenue which was the previous
holder of the 28% sequestered shareholdings.

The source said the three parties have already signed the
agreement that is now pending approval at the Sandiganbayan, the
country's anti-graft court. The said private placement, as
well as the company's value-added tax claims, are expected to be
concluded within the year.

The mining firm's earnings have been suffering heavily due to
losses from some of its mining operations. Last year, it incurred
PhP620 million in net losses, although this was an improvement
compared with the previous year's losses of PhP1.99 billion.

The company has already terminated its gold operation in Benguet
Antamok as well as mine and milling operations in the Masinloc
mine in order to avoid further losses. (BusinessWorld
28-Apr-1999)


PHILIPPINE AIRLINES: Government may bail out PAL
------------------------------------------------
The government, backtracking on earlier promises not to bailout
Philippine Airlines (PAL), may invest more money to keep the
debt-strapped flag carrier aloft, a senior official said.

Finance Secretary Edgardo Espiritu said several government-
controlled institutions could be asked to cover some of the
US$200 million capital increase demanded by PAL's creditors. PAL
chairman and chief executive Lucio Tan, a tobacco tycoon with
close ties to President Joseph Estrada, has been seeking
additional investors since stumping up half of the required
capital increase last week.

"The [government institutions] can exercise their pre-emptive
rights since they are current stockholders of PAL," Mr Espiritu
said. "The aim here is to prevent the collapse of PAL." (South
China Morning Post 28-Apr-1999)


PHILIPPINE ASSOCIATED: Firm bid attracts Cojuangco, foreign firms
-----------------------------------------------------------------
The list of groups interested in bidding for the government's 37%
share in Philippine Associated Smelting and Refining Corp.
(PASAR) slated for Monday next week has grown to seven with the
recent entry of two more foreign firms and local Northern
Consolidated Cement Corp. of Eduardo "Danding" Cojuangco, Jr.
The other two are Japanese trading giant Marubeni Corp. and
Korean conglomerate Samsung, said Domingo Bautista, an Asset
Privatization Trust (APT) official designated as supervising
trustee for the PASAR bidding.

Earlier, government sources said there were four that had
reportedly paid for the bidding information kit: Wellex Group
owned by businessman William Gatchalian, Swiss group Glencore, a
group represented by the Picazo law offices, and one unidentified
group.

If PASAR is not privatized, government can lose $1 billion at the
end of the Estrada administration, APT chief executive trustee
Renato B. Valdecantos told the Senate committee on government
corporations and public enterprises chaired by Senator Juan
Ponce Enrile. "PASAR's cash advances total 24 billion
(Philippine) pesos (PhP) while maturing obligations amount to
PhP7 billion," he said.

Some minority stakeholders of the firm have insisted on
preventing the auction, fearing the entry of a new partner would
dilute their shares. Some quarters have also moved for the
restructuring of PASAR's debts before government bids out its
shares. (BusinessWorld 28-Apr-1999)


PILIPINO TELEPHONE: Drops proposal for 3-year grace on interest
---------------------------------------------------------------
After being rejected by its creditor banks, debt-ridden cellular
telephone firm Pilipino Telephone Corp. (Piltel) has decided to
scrap its bid for a three-year grace period on interest
payments. A BusinessWorld source at one of the creditor banks
said this particular provision was not in the latest
rehabilitation scheme Piltel presented last Wednesday. The banks
have adamantly rejected what they feel was the "equivalent of an
interest moratorium" and stressed their position is "non-
negotiable."

With that out of the way, Piltel and its creditors can proceed to
flesh out an amicable debt restructuring plan, which include
concessionary interest rates, longer repayment term and the
conversion of a portion of the principal into equity, the
BusinessWorld source said.

The source added creditor banks are expected to give their
"agreement in principle" to the newest rehabilitation terms. The
cellular firm, whose brand name is Mobiline, has 34.9 billion
Philippine pesos (PhP) in obligations that needs to be
restructured, including $279 million it owes to Japanese supplier
Marubeni Corp.

Under the latest rehabilitation plan, Piltel will pay a lower
interest rate of 1% plus the prevailing 91-day Treasury bill rate
on peso-denominated loans and a rate of 1% plus the London
interbank offered rate (LIBOR) on dollar-denominated loans, the
source said. These rates were actually what banks proposed
in lieu of a three-year moratorium on interest payments, which
would have classified the loans as past due or non-performing in
the banks' books.

Under a "gentlemen's agreement," local banks will charge 1.5% and
6.5% more over the 91-day T-bill rate to prime and non-prime
borrowers, respectively. Thus, Piltel will enjoy rates even
better than what prime borrowers could avail of.

The proposed plan also includes the conversion of 50% of Piltel's
loans to banks into preferred shares of its mother company,
telecommunications leader Philippine Long Distance Telephone Co.
(PLDT).

"If I were the bank, I would convert half of my loans to PLDT
preferred shares immediately. The credit risk will then become
PLDT's," the BusinessWorld source said. The remaining 50% will
have maturities of 10 and 15 years and will be "strictly Piltel's
obligation."

As of Dec. 31, 1998, Piltel has $408 million or PhP16.3 billion
in dollar loans, 66% or $268 million of which is in the form of
convertible bonds, 21% or $87 million in long-term loans and 13%
or $53 million in short-term loans. Peso-denominated loans
account for PhP7.45 billion. Short-term loans amount to PhP2.7
billion while long-term obligations are pegged at PhP4.7
billion.

PLDT will also be acquiring 99% of Piltel through a buyout. At
present, it has a 57.76% stake in the cellular telephone
provider.

Piltel's original debt restructuring proposal called for the
conversion of one-third of its loans into PLDT convertible bonds.
One-third will have a 10-year repayment term, while the balance
will mature in 15 years. (BusinessWorld 28-Apr-1999)


=================
S I N G A P O R E
=================

CREATIVE TECHNOLOGIES: Creative Q3 net to fall 35-45%
-----------------------------------------------------
Analysts are expecting soundcard maker Creative Technology to
report today a 35-45 per cent decline in net profits for its
fiscal third quarter ended March, and revenues to be flat at best
or fall by as much as 10-15 per cent. Based on a BT poll of six
broking houses, research analysts' earnings forecasts for the
group range from US$24 million (S$41 million) to US$30 million.
Creative's results were due to be announced in the US after the
market there closed Monday. On an earnings per share basis, local
analysts are predicting a fall of between 24 US cents and 32 US
cents.

Last year, Creative turned in net earnings of US$45.2 million, or
48 US cents per share, on a group turnover of US$298.4 million.
(Singapore Business Times 28-Apr-1999)


SEMPCORP: S$150mil provision turns profit into S$57mil loss
-----------------------------------------------------------
SEMBCORP Industries has decided to make a provision of S$150mil
above-the-line for a suit involving the conversion of a vessel
named Solitaire -- thus reversing its 1998 profits to a S$57mil
loss. The decision was made after a London tribunal delayed its
decision on the matter pending further evidence, the Singapore
Business Times reported. Because of this "exceptional" item, the
business daily said, SembCorp would now report a loss of
S$57.1mil for the financial year to Dec 31, 1998, instead of a
net profit of S$93mil as announced earlier.

The group's bottom-line loss for the year would also balloon to
S$515mil, the largest for any Singapore-listed company last year
and far more than Neptune Orient Line's S$438mil loss, the report
said. The company's move was in no way an admission of any fault
or liability. It intended to continually defend its position, a
SembCorp statement said.

Asked whether additional provisions were needed, Wong noted: "The
arbitration will last for at least two more years and we will do
nothing more until we have a decision in hand."

The provision will not affect the results of Jurong Shipyard, to
which all of Sembawang Corp's shipyard operations were sold
before Sembawang merged with Singapore Technologies Industrial
Corp to form SembCorp.

The Solitaire case dates back to November 1993 when the shipyard
was awarded a S$230mil contract by the vessel's owner, Allseas.
The contract was to convert the bulk carrier into a pipe-laying
vessel. Allseas terminated the contract in October 1995 before
work was completed, alleging failure by Sembawang to finish the
job on time and other breaches. It sued for o142mil. Sembawang is
challenging the termination and counter-claiming for damages and
work done amounting to S$231mil -- S$137mil for variation order
requests and S$94mil for work done and not paid -- less an offset
of S$115mil in respect of the original contract value. These
claims and counter-claims, SembCorp said, would result in a net
exposure of S$150mil. (The Star Online 28-Apr-1999)


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

KIATNAKIN FINANCE: Kiatnakin recovers with B248m profit
-------------------------------------------------------
Kiatnakin Finance and Securities Plc has managed to rescue its
businesses after temporary closure by the authorities in August
1997. The company moved into the black in the first quarter of
this year with a net profit of 248.9 million baht, compared with
a loss of 629 million baht in the same period of last year. From
the profit, the company was able to repay some of the loans
extended by the Financial Institutions Development Fund on
condition repayment is made within eight years.

The amount owed to the fund has dropped to four billion baht from
5.7 billion, Vichien Jearkjirm, the managing director, said
yesterday.

The turnaround stems mainly from interest and dividend income
totalling 320 million baht and more than 83 million baht in non-
interest earnings. Almost one billion baht was raised through the
issuing of warrants and debentures, lifting the company's
capital-to-loans ratio to 12%. As of March 31, the company's
assets were worth 23.5 billion baht.

Its non-performing loans accounted for 61% of the original
lending totalling seven billion baht before the temporary
closure. But all subsequent loans totalling two billion baht were
performing, Mr Vichien said. After the completion of debt
restructuring, the company expected to cut the NPLs to between
10% and 15% of its total lending. (Bangkok Post 28-Apr-1999)


NAKORNTHON BANK: Standard Chartered wins Nakornthon race
--------------------------------------------------------
While Standard Chartered Bank of the United Kingdom has been
chosen as the strategic partner for Nakornthon Bank, the plan to
rescue the small Thai bank has taken a new twist. Nakornthon will
be nationalised instead of entering the finance ministry's
recapitalisation assistance programme. However, the central
bank's Financial Institutions Development Fund, which would have
to inject about 14 billion baht into the bank, wants a week to
consider the proposal. The FIDF board will meet next Tuesday to
discuss the plan, said Chaktip Nitiphon, the central bank's
assistant governor and manager of the Fund.

The new proposal was made because of several problems. Under the
old plan, the finance ministry would have provided 13 billion
baht to cover Nakornthon Bank's negative equity position. The
government then would acquire a 20% stake in the bank for an
estimated 1.4 billion baht.

Under the plan, Standard Chartered would eventually control 70%,
the ministry 20% and existing shareholders 10%.

However, the plan was seen as politically dangerous. The
government would have to explain why its 13 billion baht gave it
only a 20% holding, while Standard Chartered controlled 70% for
just 4.8 billion baht.

There was also a technical problem: finance ministry involvement
would have made Nakornthon a state enterprise, making it more
difficult under the law for Standard Chartered to acquire its
shares. However, if the FIDF nationalises the bank, it has the
authority to sell shares to any strategic investor.

As the situation had changed, Mr Chaktip said it would be too
early for the FIDF to predict the exact amount the Fund would
have to commit.

However, he new proposal would not affect the deal between
Nakornthon and Standard Chartered Bank, and a signing ceremony
would be held in Bangkok today once Rana Talwar, the group chief
executive arrives.

He said a South China Morning Post report that Standard Chartered
Bank would acquire a 69% equity in Nakornthon was correct, but
this would only be done after the existing shareholders had their
equity written down by 90%, or from 10 baht par to one baht a
share. Under the plan, Standard Chartered would take operational
control, and existing top management would resign after a
transition period. The source said the bank might not see
significant changes in operational structure for about two years,
though. (Bangkok Post 28-Apr-1999)


SRITHAI SUPERWARE: Deal maintains family's holding
--------------------------------------------------
After a long wait, Srithai Superware Plc yesterday announced it
had successfully restructured its debts in line with the new
business rehabilitation law. Under the deal, Srithai's 23
creditors will take around 50% equity in the firm but leave the
founding family with the single largest shareholding and the
current management in control. Srithai's problems started soon
after the devaluation of the baht due to $160 million in unhedged
loans.

Srithai said yesterday it had restructured $100 million of its
debt, with the remaining $60 million a straight debt for equity
swap. Bank of America, WestLB and Schroder International Merchant
Bank are among the largest creditors.

"Existing senior management will retain operational control and
creditors will assume a significant equity in return for a
substantial reduction in the company's ongoing foreign burden,"
the president of Srithai, Sanan Angubolkul, said in a statement.

"The process of rehabilitation will take some time and we will
shortly appoint SGV Na Thalang & Co as rehabilitation planner to
facilitate the implementation of the restructuring."

The plan, while winning the agreement of all creditors, must
still be formally ratified by the court before it can be
implemented.

Srithai said its strong operating cashflow had helped maintain
confidence in the firm and its management, among creditors.

A local analyst said the deal would encourage other indebted
family-owned businesses which fear loss of control, to enter
similar restructuring agreements. Mr Sanan yesterday confirmed
the family would have the first option to purchase shares if
creditors decided to off-load them. The company had earlier
sought a strategic partner and briefly flirted with Berli Jucker
Plc. However, Berli Jucker Plc wanted to acquire about 60% of
Srithai for 1.2 billion baht which was unacceptable to the family
as Berli Jucker would end up holding the largest stake. (Bangkok
Post 28-Apr-1999)


THAI MILITARY BANK: Military Bank eyes $3b from securities sale
---------------------------------------------------------------
Thai Military Bank's shareholders have approved a plan to raise
at least 15.4 billion baht (about HK$3.16 billion) by selling
stocks and bonds to boost capital amid rising loan defaults.
The bank said it would sell 9.9 billion baht of preferred shares
with bonds attached locally by the end of next month, as it joins
a government-funded rescue programme. The securities would carry
a minimum annual guaranteed return of "slightly higher than 11
per cent", said president Thanong Bidaya.

Thai Military Bank executives have repeatedly said a state-
sponsored bailout was an option, as the armed forces, which owns
42 per cent of the bank, are strapped for cash. (Bloomberg and
South China Morning Post 28-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

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

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