TCRAP_Public/990825.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

            Wednesday, August 25, 1999, Vol. 2, No. 165


* C H I N A  &  H O N G  K O N G *

ENGLONG INTN'L: Delisting puts more firms on brink STIME
WATCH INTN'L: In debt restructuring talks           -

* K O R E A *

DAEWOO GROUP: Subsidiaries face workout plan
DAEWOO MOTORS: GM visits factories, preliminary to talks
KOREA LIFE: Private investment to defy government plans
SAMSUNG GROUP: Agreement with creditors reached

* M A L A Y S I A *

PANTAI HOLDINGS BHD: Posts annual loss
PUNCAK VISTA SDN: UEM unit still can't repay loans
SOUTHERN STEEL BHD: Posts first-half loss
SYARIKAT KAYU WANGI BHD: Posts first-half loss

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

ORIENT BANK: Allied Bank seeks aid from gov't regulators
PHILIPPINE AIRLINES: MIASCOR bids for some of assets
PHILIPPINE REALTY: In talks for debt-for-equity swap
UNIWIDE GROUP: SEC orders ING Bank not to sell assets

* T H A I L A N D *

CHAROONG THAI WIRE: Posts first-half loss
ITALIAN-THAI DEVELOPMENT: Debt rollover brightens picture
KRUNG THAI BANK: Probe to be conducted independently
NAKORNTHAI STRIP MILL: S&P downgrades corporate ratings
PANJAPOL PAPER: Gets court order to rehabilitate
SAMMAKORN PLC: To sell stake in Danacom
THAI FARMERS BANK: Posts first-half loss
THAI FILM INDUSTRIES: Ends debt restructure,shares to BBL
THAI OIL CO.: Cabinet to thrash out details of debt plan
TOTAL ACCESS COMMOS.: Nears deal with Bell Canada

C H I N A  &  H O N G  K O N G

ENGLONG INTN'L: Delisting puts more firms on brink              
Nine companies face the risk of losing their listings on
Hong Kong's stock exchange, following yesterday's delisting
of Englong International, as the exchange steps up
enforcement of rules on prolonged suspensions.

Each of the nine companies have been suspended from trading
by the stock exchange for more than three months.  Three of
these companies are in the final stage of the exchange's
delisting process.  Under stock exchange rules, if these
companies are to stave off delisting, they need to have
restructuring proposals accepted by the exchange within six
months from when final delisting procedures began.  The
three companies are: Rhine Holdings, Yaohan Hongkong and
Chintex Oil & Gas, owned by former legislator Chim Pui-

Yaohan will be the next company to be delisted if it does
not put forward a valid restructuring proposal by September
15.  Rhine is facing a January 12 deadline.  However,
Chintex, which has been suspended from trading since
September 1, 1989, has already submitted a restructuring
proposal.  The plan, which has been approved by the
exchange in principle, is still subject to shareholder

The other six companies have not reached the final stage of
the stock exchange's delisting process.  The exchange
introduced procedures to delist companies with prolonged
suspensions last February.  The exchange delisted Englong
International yesterday after the company failed to submit
a valid resumption proposal before a June 17 deadline.

On July 13, the exchange cancelled the listing of collapsed
investment bank Peregrine Investments under its delisting
procedures.  The stock exchange's enforcement of its
delisting rules for companies with prolonged suspensions
have generally been welcomed by brokers.  Standard Capital
Group executive director Louis Tse Ming-kwong said the
stock exchange should delist companies that have been
suspended for several years.

"For small shareholders, it would not be a big difference
between a delisting and a continued suspension," Mr Tse
said.  "In both cases, small investors cannot cash in their
investments in the companies."

Hung Sing Securities director Gilbert Cheung Yik-cho said
the delisting of companies with prolonged suspensions was
the only solution.

"Many of these companies have financial problems," Mr
Cheung said.  "It would not be appropriate to request them
to resume trading."

However, Hong Kong Stockbrokers Association chairman Dannis
Lee Jor-hung said the delisting of Englong would discourage
investors from trading in second and third-tier firms.  He
said the stock exchange needed to take into account the
interests of retail punters.

"I think the exchange has to consider how many minority
shareholders would be affected under the delisting plan of
a company," he said.  "If there are a lot of investors
going to be affected in a delisting plan, the exchange
should not make such a decision."   (South China Morning
Post  24-Aug-1999)

STIME WATCH INTN'L: In debt restructuring talks           -
Debt-laden watch-maker Stime Watch International Holdings
is in talks with two potential investors on a possible debt
restructuring and buy-out.

One of the investors was a Taiwanese watch and jewellery-
maker, while the other was from the mainland, financial
controller Kenneth Sin said yesterday.  Mr Sin said the
success of the talks depended on the attitude of creditor
banks.  He said the firm had about $170 million of bank
loans, while its cash in hand amounted to only "a few
hundred thousand dollars. We hope the negotiations can be
finalised in the next two to three months."

Mr Sin said a liquidity squeeze had forced the firm to
shrink its business, further reducing its profit margin.  
For the year to December 31, Stime recorded turnover of
$190.73 million, almost 44 per cent lower than in 1997. It
posted a $164.3 million loss for the year, compared to a
$125.7 million loss in 1997.  (South China Morning Post  


DAEWOO GROUP: Subsidiaries face workout plan
In a bid to ease the worsening financial condition of the
Daewoo Group units, the government will put some of them
under an early rehabilitation program regardless of the
group's recent accord with creditors on sweeping
restructuring, a senior financial regulator said yesterday.

The government has been implementing this principle in
improving the financial status of the ailing private
sector.  A high ranking government official had said Monday
that there had been a meeting of top government economic
policy makers including Minister of Finance and Economy
(MOFE) Kang Bong-kyun, Financial Supervisory Commission
(FSC) Chairman Lee Hun-jai, and Chief Presidential Economic
Advisor Lee Ki-ho on Sunday and that they agreed to
implement the scheme to take care of the Daewoo problem.

A government official said the basic government position on
the restructuring of Daewoo is that a workout program will
be enforced only if the overhaul is not proceeding well.

"But if the current liquidity problems of some units
continue, they may face the risk of collapsing even before
the six month period for the group restructuring is over,
prompting the talk of an early workout plan," he said.

The workout program will be imposed on Daewoo affiliates
facing serious liquidity crises even before the group
completes its overhaul plan, Lee said. A workout program
usually entails a temporary freeze on the debts of a
company, while its creditor banks provide it with
operational funds. Debt rescheduling or write-offs can be
granted as well.

The government official said that the Daewoo workout plan
consists of a government commitment to provide Korea's
second largest business group with bailout measures
including debt to equity swaps and capital injections. The
official also said that the administration's guarantees
will eliminate any jitters in the financial market.

"Concerning Daewoo's restructuring, we are mulling all
possibilities," FSC spokesman Kim Young-jai said yesterday.
"However, nothing has been decided yet."

But analysts said that the government will have no choice
but to put some Daewoo units under a rehabilitation program
in light of their serious credit shortages.  The government
only needs to decide when to implement the workout program
and which Daewoo units to subject to it, they said.

However, the two government offices in charge of private
sector restructing, FSC and MOFE are known to be split over
specific steps of the bailout plan.  The same official
said, however, that the exact timetable for implementing
the workout policy could be postponed until next week as
the whole plan needs to be agreed by Daewoo's Chair Kim
Woo-Choong, who is now on a business trip abroad.  

Meanwhile, Daewoo Corp., the group's trading and
construction unit, said yesterday that the company will
continue its trading business despite the group's
restructuring program.

Presiding over a meeting of senior company officials,
Daewoo President Chang Byong-joo urged them to step up
publicity activity in order to dissipate misunderstandings
among foreign buyers and domestic suppliers that it will be
reorganized into an auto-related firm.

In addition, the company aims at posting an annual turnover
of 30.6 trillion won and exporting products worth $20
billion by the year 2002.  (Digital ChosunIlbo  24-Aug-
1999; Korea Herald  25-Aug-1999)

DAEWOO MOTORS: GM visits factories, preliminary to talks
About 20 representatives from General Motors (GM) arrived
here yesterday to visit the factories of Daewoo Motor and
hold talks with Daewoo Motor President Kim Tae-gou over a
proposed tie-up, industry sources said.

The asset-evaluation visit is expected to open full-scale
negotiations on strategic cooperation, as it is the first
time for GM officials to visit Korea in large numbers after
the two companies exchanged a memorandum of understanding
(MOU) Aug. 6. Earlier last week, Daewoo Motor President Kim
met with top GM managers at the firm's headquarters in

"It is not known whether the GM officials will make a full-
fledged inspection during their visit this time or engage
in detailed negotiations, as the bilateral talks are still
in the early stages," said a source.

According to some observers, the troubled Daewoo Group has
already agreed to hand over a more than 60 percent stake in
the auto affiliate's passenger car operations to the U.S.
giant.  (Korea Herald  25-Aug-1999; Digital ChosunIlbo  24-

KOREA LIFE: Private investment to defy government plans
Panacom, a U.S. company assisting former Korea Life
Insurance Chairman Choi Soon-young in his desperate effort
to retain the insurance firm, has decided to make a 50
billion won equity investment by Aug. 30, defying the Seoul
government's plan to nationalize the company.

Korea Life yesterday decided at a meeting of the board of
directors to issue 10 million new shares with face value of
5,000 won per share, handing all of them to its U.S.
savior.  If the U.S. company makes the announced equity
investment, it risks losing the entire 50 billion won
because the Financial Supervisory Commission is determined
to eliminate all outstanding shares before injecting public
funds.  An FSC official said he does not believe Panacom
will be foolish enough to take on the risk.

"It may be a gesture to get a favorable verdict on the suit
filed by Choi to invalidate the commission's measures
against Korea Life," he said. The ruling on the suit will
be made Aug. 31.

The U.S. company has offered to buy Korea Life through a
capital investment of 2.5 trillion won but the FSC
instantly rejected the proposal.  The commission has
already declared Korea Life insolvent and plans to infuse
between 1.35 trillion won and 2.7 trillion won into the
troubled insurer before auctioning it off.  (Korea Herald  

SAMSUNG GROUP: Agreement with creditors reached
The creditors group of Samsung Motors convened a meeting
Tuesday after agreeing to accept Samsung Business Group's
proposal to pay W2.45 trillion to compensate for the auto
company's expected losses by the end of next year.

"Samsung will assume 2.45 trillion won by whatever [means
they choose] to secure the money by the end of next year,"
a Hanvit Bank spokesman said.  The conglomerate will
present a written pledge soon for endorsement by creditors,
he said.  In return, creditors will cancel plans to hit it
with punitive financial sanctions.

The creditors group has been in a tug-of-war with Samsung
for more than 2 months over the issue of how the business
group should pay off the W2.8 trillion in debts of Samsung
Motors. Two months ago, Samsung Group chair Lee Kun-hee
agreed to contribute 4 million shares of Samsung Life as
payment for the debts. However, Samsung and the creditors
group differed widely on what should be done in the event
that the value of the donated stocks should fall below the
full amount of the debt.

According to the creditors group, Samsung chair Lee will
hand over 3.5 million shares to the creditors group and
another 500,000 shares to compensate Samsung Motors's
suppliers and subcontractors for a total contribution of 4
million shares. The creditor group will commission the
group to turn the shares into cash for a payment of W2.45
trillion to the creditors group and W350 billion to Samsung
Motors's suppliers and subcontractors. Samsung chair Lee
agreed to hand over an additional 500,000 shares if the
total value of the shares falls short of W2.45 trillion.

"If the amount is short of 2.45 trillion won, Samsung then
will be required to buy subordinated bonds of creditor
banks or subscribe to their rights issues," he said.

The debt-laden carmaker sought protection from its
creditors in June. It had suffered massive losses since its
ill-fated birth at the height of South Korea's economic
crisis in March last year.

Samsung's new agreement was seen as another victory for
President Kim Dae-Jung, who has battled to reduce the
powers of sprawling family-owned business groups.
Samsung was pressured to assume full responsibility for its
disastrous auto venture. (Digital ChosunIlbo, Business Day  


PANTAI HOLDINGS BHD: Posts annual loss
Pantai Holdings Bhd recorded a group pre-tax loss of
RM67.61mil for the year ended June 30, 1999 as compared to
a pre-tax profit of RM252.77mil the previous year. This was
the result of a 28.4% drop in turnover to RM116.06mil from
RM102.1mil previously.  (Star Online  24-Aug-1999)

PUNCAK VISTA SDN: UEM unit still can't repay loans
Construction group United Engineers (Malaysia) Bhd said
yesterday that its associate Puncak Vista Sdn Bhd was still
in default on the payment of principal on two facilities
worth a total of 393 million Malaysian ringgit (S$173
million).  (Reuters; Business Times  24-Aug-1999)

SOUTHERN STEEL BHD: Posts first-half loss
Southern Steel Bhd recorded a lower pre-tax loss of
RM30.09mil for the six months ended June 30 compared to a
loss of RM86.012mil in the corresponding period last year.
Turnover dropped 8.3% to RM381.79mil from RM416.56mil
previously. The company expects its performance for the
second half of the year to continue to improve.  (Star
Online  24-Aug-1999)

SYARIKAT KAYU WANGI BHD: Posts first-half loss
Syarikat Kayu Wangi Bhd recorded a higher group pre-tax
loss of RM3.94mil for the six months ended June 30, 1999
compared to RM1.98mil loss in the corresponding period last
year. This was despite a higher turnover of RM103,000 from
RM59,000 previously.  (Star Online 24-Aug-1999)


ORIENT BANK: Allied Bank seeks aid from gov't regulators
Lucio Tan-owned Allied Banking Corp., which is set to pay
one billion Philippine pesos (PhP) (US$25 million at
PhP39.543:US$1) for the right to run the 52 branches of
failed Orient Commercial Banking Corp., now wants
regulators to extend PhP1.8 billion (US$46 million) in cash
assistance to service depositors.

"Where do you think Allied Bank will get the money (to pay
for the first batch of deposit withdrawals)? That's why
there is a PhP1.8-billion funding assistance," the bank is
asking from the Bangko Sentral (Central Bank of the Phils.)
and the Philippine Deposit Insurance Corp. (PDIC), PDIC
executive vice-president Ricardo Tan yesterday told

Allied Bank won last Tuesday's bidding for Orient Bank with
its PhP1-billion offer, but the payment will not cover
Orient Bank's PhP2.4-billion (US$61 million) emergency
loans and PhP1.1-billion (US$28 million) emergency advances
with the central bank, and PhP900 million (US$22.8 million)
from the PDIC.  As far as Allied Bank is concerned, it will
only assume Orient Bank's deposit liabilities and run its
52 branches, in exchange for PhP1.8 billion (US$46

"After that, wala na (no more)," said Bangko Sentral deputy
governor Alberto V. Reyes said.

Allied Bank has also proposed that it will allow only 20%
of Orient Bank's deposits to be withdrawn and the rest
would be kept with the bank for five years earning a 2%
annual interest, Mr. Reyes said.  However, this scheme, as
well as the PhP1.8-billion in assistance that Allied Bank
is asking, are still subject to approval by the regulators.
He said the central bank has started to foreclose on all
the collateral pledged by Orient Bank and Ever Gotesco
Group owner Jose Go to raise enough cash to cover the debts
with the central bank.

"All the collateral are now being foreclosed, including the
property of Mr. (Jose) Go and his brothers," said Mr.

He said the central bank has identified more than 500
titles Mr. Go and his brothers own. These, he said, can be
used by the Bangko Sentral to "attach" to the foreclosure
papers it will submit to the courts.  "These will be used
to cover the uncollateralized overdrafts," said Mr. Reyes.

He said the PDIC has also started to liquidate Orient
Bank's PhP3-billion (US$76 million) assets to pay off
Orient Bank's remaining obligations.

"PDIC is the receiver-liquidator and Orient Bank is
currently under liquidation," PDIC's Mr. Tan said. "So when
(a bank) is under liquidation, we sell off the assets (to
cover the bank's outstanding obligations)."

However, he said while the Bangko Sentral's exposure is
fully backed by first-class collateral pledged when the
bank was granted emergency loans, "PDIC's exposure is
simply what we've already paid (to insured depositors) ...
for subgrogated claims, in effect."

This means the central bank could start foreclosing on the
assets of Orient Bank, but the PDIC would have to wait for
the proceeds from the auction to pay off insured
depositors.   The PDIC official also clarified that Allied
Bank only won the license to operate Orient Bank's
branches, and did not acquire the bank's premises.

"They are not acquiring assets. They are just assuming the
uninsured deposits and the right, within two years, to
establish 52 branches -- especially in those localities
which need banking services because of the closure of
Orient," he said.

He added Allied Bank, as well as other banks, may still bid
for Orient Bank's premises, loan portfolio, and other fixed
assets.  PDIC's Mr. Tan said uninsured depositors will have
to assign their claims to Allied Bank by executing a deed
of assignment.  Mr. Reyes, however, said the Allied Bank
proposal has yet to be officially approved by the policy-
setting Monetary Board, which meets every Friday.

According to the report of the National Bureau of
Investigation released to the media last year, Mr. Go used
"dummy accounts" to go around the central bank's limits on
insider lending or lending to directors, officers,
stockholders and related interests (DOSRI).  Orient Bank
was closed last October 14 after failing to service
withdrawals starting February 14 of the same year. The bank
collapsed from heavy non-performing loans, most of which
were made up of DOSRI loans. It had PhP2.3 billion (US$58
million) in uninsured deposits. (Business World  24-Aug-

PHILIPPINE AIRLINES: MIASCOR bids for some of assets
In line with its thrust of broadening its passenger and
cargo handling operations, the Manila Integrated Airport
Services Corp. (Miascor) formalized last week its bid to
acquire a number of Philippine Airlines, Inc.'s (PAL)
ancillary business.

In a letter to Securities and Exchange Commission (SEC)
chairman Perfect R. Yasay, Jr. Miascor chairman Jovino G.
Lorenzo, Jr. said the company acknowledges the commission's
policy of "obtaining the best prices for the sale of PAL's
valuable non-core assets and not allowing sweetheart

"We know the auction process would be the best way of
achieving your process (of getting the best price for PAL's
assets)," Mr. Lorenzo said.

The local ground-handling firm is optimistic about the sale
of PAL's non-core assets since there is now a permanent
receivership committee to oversee the disposal of the
airliner's assets.  Miascor also expressed its full support
to the SEC's decision to appoint "independent and credible
personalities with proven management skills and outstanding
reputations as representatives -- SEC representative Renato
Francisco, former Petron chairman Monico Jacob, and SGV
partner Carlos Alindada -- to the permanent receivership

The Delgado-owned firm first expressed interest in bidding
for the maintenance and repair facility, ground handling
units and catering unit of the debt-ridden flag carrier in
a letter to PAL president Avelino L. Zapanta.  Miascor --
one of the major firms in the country's cargo and passenger
handling sector -- earlier asked PAL for the details of the
possible take-over of the said businesses. Mr. Lorenzo also
asked for information on how to go about a due diligence to
put forward a serious offer for the non-core assets.

Meanwhile, Miascor recently forged a joint-venture
agreement with Swissport, the ground-handling subsidiary of
the SAir Group, involving the latter's acquisition of 40%
of Miascor's Ground Handling Corp.  With the entry of
Swissport, Miascor plans to expand its regional presence to
other major airports in Asia.  (Business World  24-Aug-

PHILIPPINE REALTY: In talks for debt-for-equity swap          
Hit by temporary illiquidity as a result of the financial
crisis, listed real estate developer Philippine Realty and
Holdings Corp. (PhilRealty) is negotiating for a payment-
in-kind arrangement with creditor banks for its more than
two-billion-peso (US$51 million at PhP39.453:US$1) debt,
banking sources said.

Sources said PhilRealty -- controlled by the Lanuza family
-- is offering various land properties to the banks as
payment for its obligations through dacion en pago (debt-
for-asset swap).  PhilRealty officials cannot be reached
for comment.

As of February, the real estate company owes Metropolitan
Bank and Trust Co. (Metrobank) 1.6 billion Philippine pesos
(PhP) (US$41 million); Land Bank of the Philippines
(Landbank), PhP500 million (US$12.67 million); Philippine
National Bank (PNB), PhP38.6 million (US$978,000); and
Urban Bank, PhP14 million (US$355,000). Pilipinas Bank also
has an exposure to the company, the sources said. The
figures exclude interest charges.

PhilRealty's debts to Landbank have reportedly gone "past
due," while those with the other creditor banks are still
"current," the sources said.  In a disclosure to the
Philippine Stock Exchange (PSE) yesterday, the real estate
firm said it is "negotiating for a debt-for-property swap
with Metrobank" and has offered land as payment.

"Negotiations are still ongoing. There is no final
agreement yet. We have yet to agree on the valuation of the
properties," a source from one of the creditor banks said.

The source added that the creditor banks' internal
appraiser is quoting a "conservative" or below-market
valuation on PhilRealty's assets, as the holding cost has
to be factored in.  Since the assets cannot be sold
immediately, it will be considered non-earning, the source
added.  The source said PhilRealty prefers a debt-for-asset
swap arrangement rather than restructure its loans to
"substantially reduce its obligations" to the banks.

"Their collateral has high value. The company is not
insolvent. They are just suffering from temporary
illiquidity. Their cash flow is not sufficient to pay off
their loans," the sources said.

Earlier, the source said PhilRealty "promised" to use the
proceeds from the sale of its 10.44% stake in International
Exchange Bank (iBank) as payment to a portion of its loans
to the creditor banks.  "The company was selling its iBank
shares before," the source said.
Creditor Metrobank was reported to be eyeing the Lanuzas'
stake in the bank as payment to PhilRealty's loans in the
bank. Metrobank, however, denied this news.  The real
estate company's problems began during the 1997 currency
crisis, when lending rates rose and sales plummeted in the
real estate sector.

"Before the crisis, PhilRealty has no problem. 'Yung mga
bangko pa nga ang naghahabol sa kanila para magpa-utang
(Banks were even eager to lend to the company)," the source

PhilRealty went into land banking and construction of
condominium units prior to the crisis.  PhilRealty shares
closed unchanged yesterday at PhP0.35.  (Business World  

UNIWIDE GROUP: SEC orders ING Bank not to sell assets
The Securities and Exchange Commission yesterday ordered
ING Bank to honor a debt moratorium and stop the
foreclosure and sale this Thursday of the assets of the
cash-strapped Uniwide Group of Companies.

The SEC hearing panel, chaired by SEC chairman Perfecto R.
Yasay, told ING Bank to "cease and desist from proceeding
with the scheduled extrajudicial sale on Aug. 26 or on any
subsequent date until further orders."   It also required
ING Bank country manager and president Ponciano F. Espiritu
and the bank's board of directors to show cause why they
should not be cited in contempt or disobedience of the 60-
day temporary debt suspension order issued by the
commission last July 29.

"It should be stressed that the suspension order dated June
26 and the subsequent order dated July 29, have the effect
of preventing any creditor from proceeding against any
(Uniwide) properties or assets on which said creditor holds
a security for the payment of obligations," the SEC said.

The SEC order prevents ING Bank from conducting an
extrajudicial sale of some 218 parcels of land in Naic,
Cavite to cover the accrued debts of Uniwide of over 27.41
million Philippine pesos (US$694,750 at PhP39.543=US$1).
According to the commission, the scheduled sale of the
Cavite properties owned by Uniwide Sales Realty & Resources
Corp. -- a member of the Uniwide Group -- "appears to be in
outright defiance and contravention of a lawful order,
which may constitute indirect contempt."

The Uniwide group earlier said that if the sale of the
Cavite properties pushed through, not only will the debt-
laden group be prejudiced, but other creditors will also be
discriminated against in a situation where all creditors
should be on "equal footing."

Last week, Uniwide said it will focus corporate recovery
efforts on reviving its retail business. In fact, it has
targetted a PhP500-million ($12.67 million) capital
infusion, supposedly to come from a yet unnamed strategic
partner, to service debts accrued by retail arm Uniwide
Sales Warehouse Club, Inc.

Uniwide also assured creditors Allied Bank, United Coconut
Planters Bank and ING Bank that a specific plan and
schedule of payment has already been drafted.  It added
that its properties are being appraised, and that once the
SEC gives the go-ahead, creditors will be paid in kind.

Meanwhile, another Uniwide creditor, Manila Electric Co.
(Meralco), has asked the SEC to acknowledge its claims
amounting to PhP31.62 million ($799,636), and not the
retail firm's earlier computation of PhP15.65 million
($395,771).  Meralco, however, has not threatened to cut
services to Uniwide because of the suspension order issued
by the SEC. Meralco also stressed that its claim should be
recognized before the SEC decides on the merits of the
proposed rehabilitation plan.  (Business World  24-Aug-


CHAROONG THAI WIRE: Posts first-half loss
Charoong Thai Wire and Cable yesterday posted H1 losses of
28.6 million baht, compared with profits of 52.6m last
year. Q2 profits were 2.2m, compared with losses of 201.76m
last year.  (Bangkok Post  24-Aug-1999)

ITALIAN-THAI DEVELOPMENT: Debt rollover brightens picture
Italian-Thai Development's vice president says the success
of the company's $200 million debt extension will boost the
company's credit when it comes to bidding for construction
projects.  ITD's creditors last week officially approved
the roll over of debts for an additional five years. About
75 percent of creditors are foreigners.

"After the debt extension, the company will have the
capacity to seek loans" he added.

As a result, ITD has entered into construction deals worth
35 billion baht in the first half of this year, expecting
its revenue in the latter half to pick up from improving
economy, said the company Vice President Chatichai Chutima.

"We already have works in hand worth 35 billion baht. The
value is expected to be higher in the latter half since the
company has applied for bidding on several infrastructure
projects such as the expansion project of Don Muang
airport.  Each project is valued at an average of around
3.5-4 billion baht," he said.

However, the estimated revenue for 1999 should be
relatively close to that of 1997's figure which was
recorded at 24.78 billion baht. The company and its
subsidiaries in 1997 posted a loss of 4.85 billion baht,
but returned a 2.4 billion baht profit in 1998.  Its
revenue last year was extraordinary as ITD won the 6
billion-baht construction project for the Asian Games.
(Business Day  24-Aug-1999)

Khunying Patcharee Wongpaithoon, who says she has no money
to repay more than eight billion baht to creditors, is
likely to be declared bankrupt soon.

Khunying, daughter of Bhichai Rattakul, a deputy prime
minister, earlier failed to meet a deadline set by the
Civil Court for her to settle her debts or negotiate new
terms.  Her 19 creditors have now asked the court in Phayao
province to declare her bankrupt.

The legal process began last year. Bangkok Bank filed a
civil suit against Industrial Syndicate Co, a company owned
by Khunying Patcharee, for its failure to honour promissory
notes worth 97.72 million baht. As well, the bank filed
suits against Khunying Patcharee and her husband, Veeranond
Wongpaithoon.  The court ruled in favour of the bank, but
the three defendants did not settle the debts.

Bangkok Bank responded by filing a bankruptcy suit against
Khunying Patcharee in January this year. In March, the
court ruled in favour of the bank, and gave all of her
creditors two months to file claims for debt repayments. It
allowed Khunying Patcharee to negotiate repayments during
the period.

Negotiations were never held. When the deadline expired,
the court made an unsuccessful bid to seize her assets.
Khunying Patcharee had told the court that her assets were
worth several billion baht, in the form of land, buildings
and stocks.  However, all of her assets had been
transferred to the Financial Institutions Development Fund
(FIDF) as loan repayments, she said.

Khunying Patcharee was the former major shareholder and
president of First City Investment Plc, which plunged into
financial trouble in 1992 sparking heavy withdrawals.
The company sought help from the FIDF, which asked the
Industrial Finance Corporation of Thailand to take over the

In 1997, after the economic bubble burst, First City
Investment was one of 12 companies ordered by the Finance
Ministry to merge with Krungthai Thanakit Finance and
Securities Plc.  The enlarged finance house was later
merged with Union Bank of Bangkok to become BankThai Plc.

The Bank of Thailand has charged Khunying Patcharee, her
husband and two other former executives of First City
Investment, with illegally transferring almost 2.4 billion
baht from the company into their personal bank accounts.
The case is pending.  (Bangkok Post  24-Aug-1999)

KRUNG THAI BANK: Probe to be conducted independently
The Government yesterday announced plans to set up an
independent investigation into state-owned Krung Thai Bank
(KTB) following reports of questionable lending practices.

Criticism is mounting from opposition politicians citing
alleged lending irregularities by former management in a
row that has cut to the heart of the government's banking
sector reforms.  The Finance Ministry said in a statement
that it was approaching impartial outsiders to serve on a
team to investigate KTB, which has bad loans equal to some
60 percent of total lending.

"The prime minister and finance minister have confirmed
that there will be transparent investigation without
discrimination," a statement said.

Finance Minister Tarrin Nimmanahaeminda said the committee
would be chaired by an outsider in order to ensure fairness
and objectivity.

"The prime minister and I said on many occasions that the
examination of Krung Thai Bank's operations must be done in
accordance with the actual facts and in a transparent
manner," Tarrin said.

The bank leapt into the ranks of the country's biggest
three last year when the government used it to help deal
with sweeping industry restructuring in the wake of the
Asian financial crisis.  The storm of controversy was
sparked earlier this month by criticisms contained in a
leaked report by international auditors
PricewaterhouseCoopers, which examined the bank's former
management and lending procedures.

Finance Minister Tarrin Nimmanahaeminda, whose brother
formerly headed the bank, expressed confidence that KTB had
nothing to hide but announced an investigation by the
Finance Ministry and central bank.  However, opposition
politicians called for a fully independent probe.

KTB vice president Pongsathorn Siriyothin earlier said the
auditor's report had incorrectly estimated that non-
performing loans accounted for about 80 percent of the
bank's total credit extension.  He said the bank's NPLs at
the end of June stood at 393.5 billion baht (10.6 billion
dollars) or 59.3 percent of total loans.

KTB president Singh Tangtatswas criticized the leaking of
the auditors' report, saying only sections critical of the
bank were made public.  Under its industry restructuring
plans the government had merged First Bangkok City Bank
(FBCB) with KTB, while the troubled Bangkok Bank of
Commerce (BBC) transferred its good assets to it.
The opposition claims the move, part of wider efforts to
deal with bad loans which now account for nearly 50 percent
of all lending by Thai institutions, was intended to cover
up KTB's own debts. KTB denied the charges.

The KTB Board of Directors in holding a meeting today, and
the Financial Institutions Development Fund (FIDF) as KTB's
largest shareholder has primary responsibility to decide on
the matter of the position of the bank's chairman of the
board. Specifically, the issue deals with extending the
term of service of KTB Chairman Mechai Viravaidhya beyond
August 31.

An audit by PricewaterhouseCoopers using the sampling
method estimated that KTB had nonperforming loans (NPLs) of
80 percent of total credit outstanding. Top KTB officials
strongly criticized the audit, saying that it was
inaccurate and incomplete and that the method of analysis
was faulty. KTB claims that its NPLs were 59.3 percent at
the end of March.

Meanwhile, Fitch IBCA, and international ratings agency,
estimated KTB's NPLs to be in the range of 60-70 percent.
The Bank of Thailand (BOT), which is directly responsible
for overseeing the reporting of NPL data from all financial
institutions, has not taken a public stand on KTB's NPL
level except to pass on the reports submitted by the bank.
The BOT's lack of assertive action in getting at the true
NPL figure has led to doubts over the accuracy and
completeness of bad loan reports by other banks and finance
companies, analysts said, adding that no system appears to
be in place to ensure accuracy of NPL data. (Business Day  

NAKORNTHAI STRIP MILL: S&P downgrades corporate ratings
Standard and Poor's (S&P) yesterday downgraded the long-
term corporate ratings for Nakornthai Strip Mill to default
status.  The downgrade lowers the company's rating to 'D'
from 'SD' (selective default).

Ratings on the $249 million in senior mortgage notes due in
2006, issued by NSM Steel (Delaware) and guaranteed by
Nakornthai Strip Mill, were also lowered to 'D' from 'CC'.
Ratings on the $203 million in senior subordinated mortgage
notes due in 2008 issued by NSM Steel were maintained at

Standard and Poor's said the outlook on corporate credit
ratings of Nakornthai Strip Mill "remained not meaningful".
NSM missed interest payments of $15 million on the senior
mortgage notes on August 1, as well as on February 1.
Standard and Poor's noted that debt restructuring was under
way to allow the company to continue operations.

"With the cessation of operations since late 1998 after
lightning struck the company's hot mill facility electrical
substation, Nakornthai Strip Mill has very limited
financial flexibility," the rating agency said.

The key to any solution to the company's problem is a debt
agreement with creditors, S&P said. The company hasn't been
producing since late 1998, when lighting struck its main
plant. Sawasdi Horrungruang, whose NTS Steel Group Plc is a
major investor in the project, has said that it would take
about $100 million to restart the mill.  In the United
States, meanwhile, investment funds that purchased almost
$43 million of NSM notes are continuing with their lawsuit
against the underwriters.

The plaintiffs allege that the underwriters misled
investors about the mills' status and capabilities.
A group of funds managed by Farallon Capital Management LLC
and Oaktree Capital Management LLC is seeking $33 million
and other damages for investments in senior notes, senior
subordinated notes and debentures.

Underwriters that handled the issue included McDonald
Investments Inc, which was recently appointed as a
financial adviser by four Thai steel producers seeking to
merge operations in a cost-saving drive.  The other
underwriters were Gleacher and Co, Natwest Group Holdings
Corp, PaineWebber Inc. and ECT Securities LP.

The suit alleges that the underwriters and others misled
investors in selling $452.5 million of debt in March 1998.
It claims they misrepresented the NSM plant's construction
status, the quality of its design and steel produced, and
availability of working capital.

The investors claim they learned of the mill's problems in
October 1998 after most of the mill's management team had
been fired. The plaintiffs at that time were told the plant
construction was over budget and faced a myriad of
problems.  (Bangkok Post, Business Day  24-Aug-1999)

PANJAPOL PAPER: Gets court order to rehabilitate
The Central Bankruptcy Court yesterday ordered Panjapol
Paper Industry, one of the country's leading paper
producers, to rehabilitate its business under the
Bankruptcy Law, following an earlier rehabilitation order
issued to another company of the same group, Panjapol Pulp

According to the court, the request to rehabilitate
Panjapol Paper Industry had been made by Thai Farmers Bank
(TFB), the company's major creditor. Three of the company's
trade creditors previously submitted petitions to oppose
the rehabilitation but decided to withdraw them later.
The court also appointed Surapong Tejavibulya from Panjapol
Paper Industry's law division as the company's
rehabilitation planner. Surapong is also the planner for
the rehabilitation of Panjapol Pulp Industry, which had
entered the rehabilitation process after the court's order
in late June.

Surapong refused to mention the exact amount of the debts
of Panjapol Pulp Industry and Panjapol Paper Industry, but
said that the two companies owed billions of baht. After
both companies had announced that they were seeking
approval for rehabilitation early this year, payment of
bank debts had been stopped automatically, but the
companies were still servicing debts owed to trade
creditors.  Apart from TFB, Panjapol's creditor banks are
Thai Military Bank, Bangkok Metropolitan Bank, and Siam
City Bank.

"The banks and the company are working in close
collaboration to make the rehabilitation plan feasible.
Meanwhile, we have discussions with trade creditors too,
from time to time," said Surapong.

After the order for rehabilitation, creditors of Panjapol
Paper Industry have one month to inform the court about the
amount of debt owed by the company. Along with this, the
rehabilitation planner have three months to complete a
business rehabilitation plan, preparation period of which
could be extended twice by one month.

Surapong explained that the rehabilitation plan would
primarily comprise of the conversion of debt to equity and
rescheduling of loan repayment periods. The company has no
intention to seek a strategic partner at this stage.
One of the leading players in the Thai paper industry,
Panjapol owns a packaging paper plant with an annual
capacity of 249,000 tonnes. It also produces 48,000 tonnes
of printing and writing paper a year. The company was
investing in a pulp production facility requiring a total
investment of over Bt10 billion, but the project has been

The group's two power projects, with a capacity of 150
megawatts each, are among six power plants under the Small
Power Producers (SPP) scheme that are requesting suspension
of operations for at least three years, in order to wait
for the recovery of the economy.  Also, Panjapol group is
the developer of the high-rise building on Rama IV road
which houses the headquarters of Esso (Thailand).  (The
Nation  24-Aug-1999)

SAMMAKORN PLC: To sell stake in Danacom
Listed property developer Sammakorn Plc will sell the
entire Bt65.60 million stake in its wholly-owned Danacom
and Development Co Ltd to Sribathana Co Ltd, another
related party, to alleviate its loss burden.

Sribathana is a wholly-owned subsidiary of HM's Private
Property Office which is also the largest shareholder in
Sammakorn with a combined direct and indirect holding of
60.14 per cent.  According to a company statement quoting
Sammakorn managing director Somsak Kemarangsri, the sale
had stemmed from Danacom and Development Co Ltd's
continuous posting of hefty losses and having to pay
relatively high interest rates sent climbing by the
country's economic woes.

The losses generated by its subsidiary have adversely
affected the company's performance, which is evident from
the net loss of Bt12.82 million in the second quarter of
this year against the Bt590,000 net profit in the same
period a year ago, he said.  In fact, the company's sales
in the second quarter of this year considerably jumped to
Bt102.513 million, compared with Bt68.08 million in the
corresponding period last year.

Danacom and Development Co Ltd operates the Worachak
project, located in Bangkok's Ponprab district. The
project, which commenced commercial operations in the first
quarter of this year, comprises a three-level shopping area
and an eight-storey parking lot.  Somsak said the purchaser
would pay Bt6.55 million on the day the contract is signed.
The purchaser will pay Bt6.55 million each year thereafter
in instalments, over an eight-year period from Sept 28,
2000, to the same date in the year 2008.

However, to become valid, the deal must receive support
exceeding 75 per cent of the total votes of Sammakorn's
shareholders, excluding the votes of those related to the
transaction.  SCB Securities has been assigned the
financial adviser for the deal.

Sammakorn's share price tumbled to Bt18.50 at the close of
trading yesterday, falling by Bt1 from last Friday's close
of Bt19.50.  (The Nation  24-Aug-1999)

THAI FARMERS BANK: Posts first-half loss
Thai Farmers Bank yesterday reported audited H1 losses of
17.34 billion baht (14.74 baht per share), compared with
losses of 3.9bn (3.96) a year earlier.  (Bangkok Post  24-

THAI FILM INDUSTRIES: Ends debt restructure,shares to BBL
Thai Film Industries Plc (TFI) said yesterday it will issue
30 million new shares to Bangkok Bank (BBL) to complete its
debt restructuring programme.

The capital increase announcement followed the debt
restructuring agreement that TFI signed with BBL, its main
creditor, last Friday.  TFI managing director Vallop
Kunanukornkul said the deal with BBL marked the completion
of debt restructuring talks since the firm had already
concluded debt restructuring plans with other smaller

Under the plan, TFI will increase its registered capital to
Bt1.02 billion from Bt720 million by issuing 30 million new
shares. BBL will be the sole subscriber to the new capital
increase shares at Bt10 a piece under the debt-to-equity
conversion plan, although the TFI share price is trading at
only around Bt4 on the local bourse.

BBL has agreed to subscribe to the TFI shares at the price
higher than the market price because it has confidence in
the future of the company, said Vallop. But he declined to
disclose details on the amounts of debts TFI owed to BBL.
An extraordinary shareholders meeting will be held on 17
Sept to approve the IFI's recapitalisation plan. BBL is
scheduled to 'pay' for the new shares on Sept 20.

According to TFI report submitted to the Stock Exchange of
Thailand (SET), the company has appointed Deloitte Touche
Tohmatsu as financial adviser to help it explain to
stockholders merits of the capital increase and debt
restructuring plans.

Following the debt-to-equity conversion, BBL will hold a
29.4 per cent stake in TFI while the Prayudh Mahakijsiri
group will reduce its shares to about 50 per cent from
slightly over 70 per cent at present.  Vallop said the debt
restructuring agreements contains some 'haircut' or debt
reduction but he declined to elaborate on the details.

According to a report TFI filed to SET earlier, the company
said as of 30 June 1999, it had US$82 million in debts with
creditor banks plus US$12.3 million in unpaid interest, in
addition to debts totalling US$32 million it owed to trade
creditors and US$39 million worth of trade receipts.

"Our problems stemmed from the depreciation of the baht and
the high interest rate which only began to decline in the
third quarter of last year," he said.

In addition, TFI, a BOPP film producer, has appointed
Deloitte Touche Tohmatsu Corporate Restructuring as its
financial advisor to give an opinion to shareholders.
TFI earlier decided to close down its subsidiary in
Bangladesh after facing world economic turbulence,
resulting in mounting debts now worth 75 million baht
recorded in the company's statement in the second quarter
of this year.

Observers said TFI's problems also involved its
diversification into the property business which started to
go downhill well before the mid-98 currency devaluation.
The company developed the 'Riverside Privacy', a 32 floor-
luxury condominium, with a project cost of Bt1.65 billion.
TFI is a manufacturer of thin-film for the packaging
industry including Bopp, polyester, and CPP.

According to Vallop, TFI is ranked among the six largest
producers in the world of such products. TFI reported a net
loss of Bt141.8 million in the second quarter, down from
Bt527.9 million in loss for the same period last year. But
for the first half, the company reported a net loss of
Bt425.8 million, compared to Bt467.7 million in profit a
year earlier. It had an unrealised foreign exchange loss of
Bt1.33 billion as of the end of June 99.  

TFI's sale revenues also shrank Bt394 million or 27 per
cent during the first half because of the appreciation of
the local currency and the lower product prices. The
company exports about 80 per cent of its total production.
Apart from TFI, Prayudh is also involved in stainless
steel, coffee, and copper manufacturing operations. The
copper business is negotiating a debt restructuring plan to
complete construction of manufacturing facility.  (The
Nation, Business Day  24-Aug-1999)

THAI OIL CO.: Cabinet to thrash out details of debt plan
After weeks postponement, the Cabinet will today consider a
US$2.1 billion debt restructuring plan for Thai Oil Co
which includes a plan for state-owned Petroleum Authority
of Thailand (PTT) to inject US$391 million to assist the

Industry Minister Suwat Liptapanlop confirmed that he would
submit the debt restructuring proposal for Thaioil to the
cabinet today.  According to a cabinet document, PTT would
use its retained earnings and new borrowings of US$300
million to fund the assistance programme for Thaioil. PTT
would consult the Ministry of Finance on the additional
borrowing which could be the issuance of bonds or bank
loans, either from domestic or off-shore sources.

After the cabinet's approval, Suwat said he may accompany
PTT executives to negotiate the debt restructuring plan
with creditors in Japan. Japanese banks account to about 40
per cent of the total debts.

PTT, and Thaioil advisers met Thai and Japanese financial
institutions during April to June this year and it appeared
that financial institutions were ready to cooperate on the
plan. However, the Japanese banks regarded Thaioil as a
national refinery and would like the government to take
responsibility on the full amount of the debts.

"However, there were several Japanese banks which were
ready to cooperate," according to the cabinet document
proposed by the industry ministry.

PTT has insisted it would limit its stake in Thaioil to not
more than 49.9 per cent.  Under the debt restructuring
plan, PTT would inject US$350 million of new funds into
Thaioil, a move which would increase its stake in Thaioil
to 49.9 per cent from 49 per cent at present. Creditors
would be asked to participate in the recapitalisation by
converting US$350 million loans they extended to Thaioil to
a combined 49.9 per cent holding in the refinery.  PTT
would contribute another US$41 million to help Thaioil's
subsidiary Thai Paraxylene Co restart the construction of
its US$230 million petrochemical project.

Creditors would also have to extend the repayment period
for the remaining debts of Thaioil to up to 15 years in
addition to reducing the interest charges to come in line
with the projected cash flow of the refinery. Creditors who
would not agree to the debt rescheduling and interest
reduction, would be offered a debt buyback programme for
Thaioil to buy the debts at discount.

At present, Thaioil has a registered capital of Bt20
million, a very low amount if compared to its total debts
of Bt83 billion. It has to announce progress in debt
restructuring arrangements since November last year.
Thaioil has more than 120 creditors.  (The Nation  24-Aug-

TOTAL ACCESS COMMOS.: Nears deal with Bell Canada
Ailing Total Access Communication plc (TAC), a Singapore-
listed mobile phone operator, is expected to wrap up
negotiations with Bell Canada on an acquisition deal after
talks failed with several interested foreign telecom firms
during the past two years.

TAC has been pressured by its creditors to firm up a new
partnership deal as soon as possible after it has failed on
a commitment so far to find a strategic partner within an
18-month period. This time-frame was part of a US$537-
million debt restructuring agreement signed last July.

While seeking a partner, TAC also tried another option to
reduce its debts by offering a total of 50 million shares
in foreign markets. However, it could sell only 26.4
million shares, worth $68 million, at $2.60 per share, from
the total 50 million share offered.  The telecom industry
source confirmed that Bell Canada is the latest investor
participating in partnership negotiations in the middle of
this year, while Norway's Telenor, which earlier withdrew
from the deal, also returned to the negotiations.

Bell Canada is a telecom firm which provides a full range
of communication services to more than seven million
residential and business customers in Canada including
local and long distance telephone services offered through
wired lines, and wireless and Internet access. The company
reported revenues of $8.3 billion in 1998.

TAC hinted that the progress of the partnership deal last
week when it informed its investors that the company will
make an announcement soon.  TAC said that the new strategic
partner will hold a 20 to 25 per cent share in the company.
This will be done by placing new shares with its new
partner, including part of a 65 per cent share from TAC's
major shareholder, United Communication Industry Plc

According to the conditions, the new partner will have to
purchase additional shares in Ucom as well. Thirty-six per
cent of Ucom is owned by Somers Ltd and 26 per cent belongs
to the Bencharongkul Family.  According to the deal's
requirements, the new partner is expected to pay on average
$400 million for the shares.

However, the telecom analyst believed that the deal was
likely to be aborted like many attempts of TAC in the past,
due to internal conflict among TAC's major shareholders and
within the management ranks of the company itself.  The
analyst suggested that the failure was because TAC's top
management had no will to allow partners to control the
company's management or had failed to settle the share
price with its partners.

While a source from TAC said that the conclusion of a deal
was possible this time around, because unlike before TAC's
major shareholders had stepped in to control the
negotiation process.  Earlier TAC also had talks with three
foreign telecom firms, including Telenor in a bid to find a
strategic partner. Motorola was the first company to join
talks to form an alliance with TAC, but later withdrew
because of its own operational restructuring.

Telenor also pulled out to concentrate on its merger with
Tellia, a Swedish telecom carrier.  TAC subsequently failed
to tie-up with SingTel, which later struck a long-term
business relationship with the largest mobile phone
operator Advanced Info Service Plc (AIS).

If TAC succeeds in securing a new partner, in the next step
it will have to refinance another mountain of debt in the
form of bonds, worth $650 million, of which $100 million
will mature in the year 2001 and the remainder in 2006.  
(The Nation  24-Aug-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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