---

  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

               Monday, August 31, 1999, Vol. 2, No. 169

                            Headlines


* C H I N A  &  H O N G  K O N G *

ADMART: Losing $30 million a month since June launch
E-LIFE INTERNATIONAL: Posts second annual loss
G-PROP HOLDINGS: Posts annual loss
Y.CEE ENGINEERING CO.: Facing petition for winding up


* I N D O N E S I A *

BANK INDONESIA: BPK to audit over Bank Bali concerns


* K O R E A *

DAEWOO GROUP: Asset valuation to come next
DAEWOO GROUP: Seeking new buyer for Seoul Hilton Hotel
DAEWOO MOTORS: Emphasizing sales to increase liquidity
DAEWOO MOTORS: GM demanding control stake
KOREA FIRST BANK: Sale to Newbridge Capital maybe next year
KOREA LIFE: Panacom serious about purchasing
KOREA LIFE: Gov't close to liquidating
SEOUL BANK: Sale talks with HSBC at "virtual halt"


* M A L A Y S I A *

GREAT WALL PLASTIC INDUSTRIES: Posts first-half loss


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

ATLAS CONSOL. MINING: Posts first-half loss
BENGUET CORP.: Gets 3-year payment moratorium
CENTENNIAL CITY: Starts loan restructure talks with PNB
E-LIFE INTERNATIONAL: Posts second annual loss
ITOGON-SUYOC MINES: Posts 2nd quarter loss
MONDRAGON LEISURE AND RESORTS: Misses fee payment
ORIENT COMMERICAL BANK: Debt write-off for Central Bank?
UNIWIDE GROUP: SEC bars Landbank from asset sale


* T H A I L A N D *

INDUSTRIAL FINANCE CORP.: Seeks Bt30 bn funding for debts
ITALIAN-THAI DEVELOPMENT: Owners to dilute stake
MERRILL LYNCH PHATRA: NOT part of Nakornthai Strip suit
PADAENG INDUSTRY PLC: Creditors tell to find new partner
SIAM COMMERCIAL BANK: To trade subsidiaries for efficiency


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

ADMART: Losing $30 million a month since June launch
----------------------------------------------------
Jimmy Lai Chee-ying's controversial direct marketing
venture adMart has been stung by the recent retaliatory
moves of supermarkets such as ParknShop and Wellcome,
losing an estimated $30 million a month since it was
launched in June.

AdMart's launch prompted Hutchison Whampoa-owned ParknShop
to hit back with its own campaign last month, offering
1,500 items at the steepest discounts in town.  In its
latest move, ParknShop is giving away two limousines in
lucky draws.  Other market players such as Dairy Farm
International's Wellcome, Guangnan (Holdings)' KK
supermarkets and general merchandiser Jusco Stores (Hong
Kong) have been forced to follow suit and cut prices.

"We're a small potato," said AdMart president Wilson Chu
Bun.I really don't understand why the market has had such a
strong reaction."

He said Mr Lai had so far spent about $300 million on
adMart, which sells and delivers discounted groceries,
mobile phones, computers and health care products.  It has
a total budget of $600 million.  Sources said ParknShop was
prepared to lose up to $1 billion during its promotional
campaign. Company representatives were not available for
comment.  Mr Chu confirmed adMart had suffered losses of
more than $30 million a month, but said sales had climbed
back to the levels seen before the supermarkets began their
price war last month.

"We lost money, but we will keep fighting, fighting and
fighting," Mr Chu said.  He said groceries were not
adMart's priority, but simply a starting point.  "Our eyes
are on discounted airline tickets," he said.

AdMart recently took over an airline ticket-vendor and
plans to launch a service in a couple of months.  With no
sign on the horizon of an end to the price war, analysts
are worried it will further fuel deflation.

"The price war appears to have gone out of control. The
price cuts are like a game of money burning," one said.

To boost sales, Jusco last Friday launched a three-day
promotion, offering 10 per cent off supermarket items and
20 per cent off apparel.  "Traffic seems to have increased
today," Jusco spokesman Ruby Wan Mei-yuk said on Friday.
(South China Morning Post  30-Aug-1999)

E-LIFE INTERNATIONAL: Posts second annual loss
----------------------------------------------
Troubled freight forwarder E-Life International, formerly
known as Jet Air International Group, narrowed its net
losses to $26.73M for the year ended March 31 from its
previous net loss of $50.92M the year before.

In addition, the company had net cash outflow from
operating activities amounting to $2.57M and consolidated
net current liabilities of $23.58M, the company said.
Operating losses also narrowed to $28.35M during the year
ended June 30, 1999, from its previous level of $46.83M the
year before.  Loss per share was 6.2 cents, down on the
loss of 12.1 cents the previous year.  Turnover of the
company fell from $320.2M to $242.6M.  The major reasons
for the fall in turnover were an exceptional loss of
$31.72M on securities trading in the previous financial
year and the tight lending policy of financial
institutions.

G-PROP HOLDINGS: Posts annual loss
----------------------------------
The property developer reported net losses of $433.2M for
the year ended March, improved from the loss registered for
the previous year of $1.2B.  Losses per share were 1.05
cents compared with 3.37 cents for fiscal 1997-98.  The
company said turnover fell seven-fold to $41.3M from $280M.
It declared an exceptional loss mainly on forfeiture of
deposits made on acquisition of property interests and from
disposal of properties under development, investments, and
unlisted associated companies.  No dividend was declared.

Y.CEE ENGINEERING CO.: Facing petition for winding up
-----------------------------------------------------
The High Court of Hong Kong Sar has scheduled a hearing for
September 29 on the petition of Yeung Yuk Fund for the
winding up of Y.Cee Engineering Company Limited. A notice
of legal appearance must be filed on or before September
28.


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

BANK INDONESIA: BPK to audit over Bank Bali concerns
----------------------------------------------------
Chairman of the State Audit Board (BPK) SB Joedono said
here Thursday his office would audit the central bank, Bank
Indonesia (BI), in connection with the Bank Bali scandal as
soon as it had received a written request to that effect
from the House of Representatives (DPR).

"After receiving such a letter, I will immediately summon
(the central bank) ," Joedono told the press Thursday,
following a consultation with President BJ Habibie at the
Merdeka Palace.

According to the BPK chairman, the Bank Bali scandal was
"quite farcical. Someone enters the (government) system,
and comes out with US$ 80 million, which is quite a lot of
money. How could that happen? The whole world wants to
know," Joedono said. "The world's curiosity should be
answered: what is wrong with our system?  We must resolve
this and revise the system without politicizing the issue."

Quoting the newly sanctioned law on the central bank (No 23
of 1999), Joedono said his agency needed a written request
from the House to enable it audit Bank Indonesia.  He said
there were regular and special examinations to which the
central bank could be subjected to, but for the special
kind of audit his agency needed a written request from the
House.

According to him, the examination would focus on the
technical aspects that had enabled the scandal to happen.
"Where has it (the system) gone wrong?" he said.  (Asia
Pulse  27-Aug-1999)


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

DAEWOO GROUP: Asset valuation to come next
------------------------------------------
Daewoo creditors plan to dispatch their financial
controllers to group subsidiaries placed under workout
programs to valuate their assets.

If any of the firms encounter any serious financial
problems during the due diligence period, creditors are
ready to provide emergency funds, according to
representatives of the creditors' group. Analysts say,
however, that the circumstances surrounding these workouts
is totally different than in the past because of the sheer
scale of Daewoo's debt, which amounts to W60 trillion, and
the large number of creditors, which includes about 100
local and dozens of foreign creditors.

Accordingly, the creditors' group has been demanding more
government intervention.  Currently, six local banks with
conflicting interests share the responsibility of
supervising the workouts of 12 Daewoo subsidiaries, setting
the stage for confusion and chaos. Creditors are also
demanding that the government earmark public funds as soon
as possible as the firms will require cash infusions by the
end of the year.  (Digital ChosunIlbo  30-Aug-1999)

DAEWOO GROUP: Seeking new buyer for Seoul Hilton Hotel
------------------------------------------------------
The Daewoo Group is seeking a new buyer for the Seoul
Hilton Hotel after talks with General Mediterranean
Holdings (GMH) virtually collapsed, a group official said
yesterday.

Daewoo had signed a contract with the Luxemburg-based
private equity firm to sell the luxury hotel for $215
million in June, but failed to receive an advance payment
due to new terms demanded by GMH.  GMH demanded that Daewoo
buy back the hotel after the Seoul Hilton achieves a
business turnaround at a greater price and opposed
retaining all of the hotel's staff.

Daewoo virtually gave up further talks with GMH and is now
engaged in negotiations with a new potential buyer. The
official, without elaborating, said the group could make an
announcement early next month.

"The Seoul Hilton is a profitable business and there are
plenty of other potential buyers. The failure with GMH is
not our fault," he said.   (Korea Herald  30-Aug-1999)

DAEWOO MOTORS: Emphasizing sales to increase liquidity
------------------------------------------------------
Daewoo Motor Co., automobile subsidiary of the faltering
Daewoo Group, is intensifying its efforts to jack up sales
in a bid to counter the effects of a serious liquidity
crisis.

Daewoo Motor Sales, sales division of the family-owned
conglomerate, recently introduced a variety of marketing
programs to defend its market share.  So far, Daewoo has
unveiled three discount programs:  "New Millennium
Installment Financing," under which customers are allowed
to withhold the first payment until January of next year;
"Buy Back Program," designed to guarantee up to 50 percent
of the selling price upon repurchase of cars after three
years; and "2001 Future's Installment Financing," a program
to slash the initial monthly payment to 100,000 won.

To expand its share in the overseas market, Daewoo plans to
strengthen its distribution network and step up advertising
and marketing, company officials said.  For Europe, Daewoo
will found a local headquarters armed with its own
marketing strategy and logistics. A pan-European
advertising campaign will be launched in an effort to
upgrade its brand image while merging its sales network
with that of Ssangyong Motor by the end of the year.

In addition, Daewoo is set to expand its local sales
outlets to 150 in the U.S. market within the year. The
company entered the U.S. market at the end of last year and
expects to achieve sales of 50,000 units this year.
Daewoo also plans to introduce its new RV (recreational
vehicle) models and a mini-car, Matiz, in overseas markets
including the Middle East, Africa and Southeast Asia.
Daewoo emerged as the No. 1 carmaker in Poland in July,
outstripping other competitors including Fiat.

In western Europe, Daewoo fared well with its Matiz, with
aggregate sales volume breaking the 500,000 units mark in
June.  Daewoo officials said the company expects to easily
achieve its original export target volume of 900,000 units
this year.  To meet rising demand overseas, Daewoo's
production lines in Changwon and Pupyong are operating at
full capacity.

Along with stepped-up marketing, new models are to be
introduced from September. An upgraded version of Lanos
will hit the market next month along with a new automatic
transmission version of the Matiz, the first sub-compact to
be so equipped.  A luxury sedan, temporarily dubbed "V-
200," will be unveiled late this year, followed by a new
minivan model, "U-100."

Meanwhile, Daewoo car dealers last week pledged to join
hands to normalize the company, saddled with liquidity
problems linked to the troubled Daewoo Group, by further
promoting sales.

"It's a fact that the company is facing serious problems
but employees are making concerted efforts to overcome the
crisis," a Daewoo Motor official said.  (Korea Times  29-
Aug-1999)

DAEWOO MOTORS: GM demanding control stake
-----------------------------------------
General Motors has asked for the controlling stake in
troubled Daewoo Motor, local news report said yesterday.
Cable news channel YTN, quoting an unidentified official at
the Financial Supervisory Commission, said that GM recently
expressed to the Seoul government its intent to take over
more than 51 percent of Daewoo Motor.

The FSC official then forecast that GM is likely to buy
about 60 percent of Daewoo Motor's passenger car business,
with the parent Daewoo Group becoming only the second
largest shareholder.  He said that controls of Daewoo's six
auto-related units, including Daewoo Motor Sales, may also
be transferred to GM, hinting at a complete breakup of
Korea's No. 2 conglomerate.

Watchers speculate that Lou Huges, vice president of GM's
international operations, currently in Seoul to lead the
U.S. automaker's 20-man fact-finding team in connection
with an tie-up MOU with Daewoo Motor, may have held
discussions with FSC officials.

The chances of GM taking over Daewoo Motor's management
rights further heightened in the wake of creditors'
decision last week to take full control of the Daewoo
Group's restructuring under the so-called "workout" debt-
rescheduling program.  The creditors are expected to
implement massive debt-to-equity swaps to clean up Daewoo
Motor's balance sheet before selling the controlling stake
to GM, the watchers forecast.  (Korea Herald  30-Aug-1999)

KOREA FIRST BANK: Sale to Newbridge Capital maybe next year
-----------------------------------------------------------
The sale of Korea First Bank (KFB) to Newbridge Capital of
the United States is most likely to be delayed until next
year, said Lee Hun-jai, chairman of the Financial
Supervisory Commission (FSC), last week.

Reversing all his remarks and commitments made during
previous press conferences that Newbridge's takeover of the
ailing local bank is almost complete, Lee said during a
meeting with press on Friday that negotiations between the
FSC and the U.S. private equity investor are still at an
"initial" stage.

The FSC chairman said that the Newbridge's takeover of KFB
was nearly finished and would be announced before President
Kim Dae-jung's state visit to the U.S. (July 2-7).
But now the FSC head, who said the deal was nearly done, is
making excuses for yet another delay, and saying it is
actually still in its early stages.

The two sides have been discussing the terms and conditions
for the bank sale for the last eight months after signing a
memorandum of understanding on Dec. 31, 1998.  However, Lee
said that they are still exchanging views on basic terms
and conditions.  He also stressed that the delay of the KFB
sale is not related at all to the present liquidity crisis
of the Daewoo Group.

Without any hesitation, the international community in
Seoul, which no longer has much confidence in the nation's
top financial regulator over his international policies,
weighed in with the usual harsh criticism.

"Lee's remarks that the negotiations between the two sides
are in the initial phase after eight months, are simply not
acceptable," said a foreign banker in Seoul.  "The sale of
a large commercial bank like KFB is of course a complex
issue, involving a great deal of work. But in no way can it
still be in an early phase of negotiation. The intentions
of the top financial regulator in coming us with such line
should be examined first," he added.

The foreign financial expert said it is difficult to
understand what local financial regulators plan to do with
the bank sale, adding that he has no hope left for the
incumbent administration's pledge to improve domestic
banking activities to the international standard.
A senior official of a commercial bank, which is one of
Daewoo's 102 domestic creditors, pointed out that Lee's
statement denying a relationship between the KFB sale and
the recent corporate crisis is misleading.

"I believe that there is a very close relationship between
the two. Until the Daewoo crisis is fully taken care off,
the financial authority will not transfer the ownership of
KFB to the U.S. private investor," he observed.

Once the U.S. investor takes over the management of KFB,
one of Daewoo's major creditor banks, the FSC will have
difficulty implementing the government and creditor-led
restructuring of the group, he said.  The local bankers
simply comply with the directions from the financial
regulatory body regardless of their rationality and
justification, he said, adding this will not be the case
for international bankers.

"The government will find it difficult to deal with the
Daewoo situation once KFB is taken over by Newbridge. This
is the key reason for yet another postponement in the sale
of KFB," he pointed out.

As far as he is concerned, the FSC has no intention of
reaching the final term of sale for KFB at least for the
time being, the local banker added.

"It is not surprising to see that the KFB sale has hit a
roadblock for the last eight months. The Korean government
now in principle has no intention to sell Daewoo's major
creditor bank to the U.S.," he added.

The government and the International Monetary Fund (IMF)
agreed in December 1997 to sell KFB to a foreign
institution in return for a $58-billion bailout package.
On Dec. 31, 1998, Newbridge won the initial bid for the
takeover of a 51 percent stake in KFB in a closed
competition with other foreign investors including HSBC.
But negotiations between the FSC and the U.S. investor
failed to meet the May deadline due to differences over
KFB's asset value and terms for sharing future losses from
the bank's troubled loans.  (Korea Times  29-Aug-1999)

KOREA LIFE: Panacom serious about purchasing
--------------------------------------------
The controversy surrounding the takeover of the Korea Life
Insurance by Panacom has entered into a second phase with
the U.S. pension fund ready to inject 50 billion won
(approximately $42 million) to form a partnership with the
ailing insurance company.

A lawyer for "Yoon & Partners," who is in charge of the
Korea Life issue, said that Panacom has wired 50 billion
won to Seoul through a Citibank account to take over a
majority shares in the third largest local life insurance
firm. As the Financial Supervisory Commission (FSC) has
expressed an intention of possibly shutting down Korea
Life, the legal advisor said that the U.S. investor will
confirm its final position after today's ruling at the
Seoul Administrative Court.

"Panacom is now ready to offer 50 billion won to rescue
Korea Life from bankruptcy. It has wired the money into the
country via a Citibank account in Seoul," the Yoon and
Partners lawyer told The Korea Times yesterday on condition
of anonymity. "Now with another court ruling to be
confirmed today, the U.S. investor will most likely form an
alliance with Korea Life," he added.

The legal advisor said that Panacom stands more chance of
winning the battle against the local financial regulator in
court as this is strictly a business issue.

"Panacom is a pension fund, meaning it is difficult to
reveal all the details of the company. It may not be a
large well-known firm but it certainly is not a bogus
company," he said.  "It is wrong to prevent the U.S.
pension fund from buying the Korea Life shares simply
because it is not well known in Korea. These issues should
be handled in a fair and legal manner," he added.

The FSC's policy for banning Korea Life from issuing new
shares for Panacom was rejected last week by Seoul District
Court.  The district court said that Korea Life's
additional stock issue does not run counter to the policy
of the financial regulator aimed at rescuing the insurance
firm from the recent financial distress.

The court ruling added that it is the government who should
refrain from injecting additional public funds but not the
U.S. investor.  Declaring Korea Life insolvent on August 6,
the financial regulator has said it will scrap all existing
shares of the firm by August 14 and inject 1.5 trillion won
in public funds for the nationalization of the insurance
firm.

However, Korea Life Chairman Choi Soon-young filed a
lawsuit, demanding the nullification of the FSC decision,
leading to a surprise victory in the legal confrontation
with the local financial regulator.  Choi is now serving a
five year prison term for violation of foreign exchange
transaction laws.  Encouraged by the court ruling, Korea
Life said it would form a partnership with Panacom shortly
by issuing new shares worth 50 billion won.

The local financial regulator and the alliance between the
Korea Life owner and Panacom have been exchanging fire for
the past several weeks.  After Panacom decided to form a
joint business partnership with Korea Life, contrary to the
FSC's call to nationalize the insurance firm, the financial
regulator produced various statements questioning the
nature of the U.S. pension fund.

The FSC said on various occasions that Panacom is a bogus
company, incapable of raising the huge amount of capital
needed to take over Korea's third largest insurance firm.
The financial authority added that all Panacom has is some
support from the U.S. political circle.

Then last week the U.S. investor sent a letter to the FSC,
saying that it would take the necessary legal action
against Korea's financial regulator for defaming Panacom in
the international community with false statements.
Calling Panacom's allegation an act of obstruction of
official duty, the FSC again said that it would take a
counter legal action against the U.S. firm for threatening
the Korean government.  (Korea Times  30-Aug-1999)

KOREA LIFE: Gov't close to liquidating
--------------------------------------
The Seoul district court rejected Saturday an application
filed by the Financial Supervisory Commission (FSC) last
week for a court injunction on Korea Life Insurance's sale
of W50 billion worth of its stocks to U.S. firm Panacom.

As a result, the government is giving serious consideration
to handing down an order that Korea Life liquidate and pass
its policies onto other life insurers. One high-ranking
government official said Sunday that if Korea Life presses
on with the new rights offering to Panacom, the government
will move to block the stock sale through a forced infusion
of government funds, which would make it the largest
shareholder. The government would then liquidate Korea Life
by ordering the insurer to fill a W2.9-trillion deficit.

The government believes that neither Panacom nor Korea Life
chair Choi Soon-young would be able to do so. The same
official said that if the two parties fail to comply with
government orders, the government would transfer all Korea
Life's contracts to other local life insurance firms,
leaving Korea Life as an empty husk of a firm.

The government may change its tough stance if the court
rules in favor of Korea Life in its final decision on
Tuesday on the legitimacy of an earlier government decision
to nationalize the third largest insurer.

"The weekend court action is not final. But if we lose
again on Tuesday, we may have to revise our plans," an FSC
official told AFP.

In Saturday's ruling, the court said Korea Life's
independent bid to raise funds would not be an obstacle to
the government move to improve the firm's finances through
the injection of public funds.  (Digital ChosunIlbo,
Business Day 30-Aug-1999)

SEOUL BANK: Sale talks with HSBC at "virtual halt"
--------------------------------------------------
Financial Supervisory Commission (FSC) chairman Lee Hun-jai
indicated yesterday that the government may fail to cut a
deal with HSBC Holdings PLC to sell the troubled Seoul Bank
to the British bank.

In a luncheon meeting with foreign reporters, Lee said that
government negotiations with HSBC have virtually come to a
halt because of big differences on major issues.  In a
reversal from the memorandum of understanding (MOU) signed
in February this year, HSBC is demanding that international
standards be applied to valuing the bank's assets and
liabilities, Lee said.

The agreement, which gave HSBC the exclusive right to
negotiate with the government on the takeover of Seoul
Bank, stipulates that FSC-set criteria be used.  It is the
first time that the FSC has ever made such a "pessimistic"
remark concerning the sale of a controlling stake in the
nationalized bank.  His remark was widely viewed as hinting
that the government talks with HSBC may fall apart.

FSC spokesman Kim Young-jai, however, brushed aside such a
view, saying that the top financial regulator's remark
should be taken as is.  Kim added the government will soon
inject public funds into Seoul Bank to normalize its
operations before selling it off. While Kim refused to
disclose the exact amount to be injected, a Yonhap report
said that the government intends to infuse some four
trillion won into the bank early next month at the
earliest.  (Korea Herald  31-Aug-1999)


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

GREAT WALL PLASTIC INDUSTRIES: Posts first-half loss
----------------------------------------------------
Great Wall Plastic Industries Bhd incurred a pre-tax loss
of RM526,000 for the half year year ended June 30, 1999,
compared with a profit of RM1.29mil in the same period last
year.

In announcing its unaudited results, the company attributed
the loss to the initial high start up cost of a new plant
in Rawang, interest expense and depreciation of RM2.13mil
and RM3.85mil.  Sales increased by 26% to RM52.92mil from
about RM42mil previously, it said.  The company said the
higher turnover achieved was due to an increase in capacity
following the relocation of the Rawang manufacturing plant.
Great Wall also announced a loss per share of 4.9 sen for
the period under review, compared to a net earnings of 2.7
sen previously.  No interim dividend was declared.  (Star
Online  30-Aug-1999)


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

ATLAS CONSOL. MINING: Posts first-half loss
-------------------------------------------
Listed mining firms continue to post losses as a result of
suspension of their operations. Atlas Consolidated Mining
and Development Corp. reported a net loss of 235 million
Philippine pesos (PhP) (US$5.9 million at PhP39.784:US$1)
for the first six months of the year, 9% lower than last
year's loss of PhP257 million.

Another mining firm, Minoro Mining and Exploration Corp.,
is courting Atlas for the rehabilitation of its Cebu copper
mine. In turn, Minoro will have to acquire Atlas' PhP4-
billion debt. Atlas is discussing the new settlement scheme
with major creditors.

BENGUET CORP.: Gets 3-year payment moratorium
---------------------------------------------
Benguet Corp. obtained permission from its creditor banks
for a three-year payment moratorium on its PhP1.3-billion
(US$33 million) loans, while outlining several properties
for possible disposal to generate cash for its
diversification plans.  (Business World  30-Aug-1999)

CENTENNIAL CITY: Starts loan restructure talks with PNB
-------------------------------------------------------
Set on cleaning up its books, property firm Centennial
City, Inc. (CCI) is negotiating to restructure 600 million
Philippine pesos (PhP) (US$15 million at PhP39.784:US$1) of
its loans with state-run Philippine National Bank (PNB)
possibly through longer repayment terms or through payment
of secured property.

In a phone interview, corporate secretary Peter Suchianco
said CCI is discussing possible ways on how to modify the
payment terms of its loans with creditor banks.  "Within
next month, we hope to conclude the negotiations," Mr.
Suchianco added.

The loan is secured by the 10 floors in the BA Lepanto
Building in Makati which house the CCI main office. CCI
hopes to start construction late this year or early next
year for its development project with the Philippine
Estates Authority and Thai consortium Amari Coastal Bay
Development Corp. (PEA-Amari). CCI has a 100% interest in
Amari.

CCI has been tapped to develop 750 hectares of reclaimed
land along the Manila-Cavite Coastal Road area, estimated
to cost PhP26 billion (US$654 million). The property is
envisioned to become a world-class commercial, recreation
and residential center.  (Business World  30-Aug-1999)

EYCO GROUP: Submits new rehabilitation program
----------------------------------------------
Cash-strapped appliance maker Eyco Group of Companies is
bent on seeing the rehabilitation of its finances as it
recently filed before the corporate court a revised
rehabilitation plan. The plan is seen as a compromise
between the requirements for the company's corporate
recovery and demands of its creditors.  (Business World
30-Aug-1999)

"While the Eyco group is convinced of the viability of the
Strategies Alliance Corporation (SAC) proposal (earlier
approved by the Commission) it is becoming clear that the
SAC proposal cannot be implemented as originally planned
due to the appeal filed by the consortium of creditor
banks," the debt-laded group said in its motion to the
Securities and Exchange Commission (SEC).

Creditors' opposition to the SAC plan, approved on December
18, 1998, has caused much delay to the group's
rehabilitation and has "unduly prejudiced not only Eyco and
its employees, but more importantly the stockholders of
Eyco, and even its creditors," Eyco added. To reach a
compromise with its creditors, the group asked the SEC to
admit and approve the new rehabilitation plan that proposes
to combine revenues generated from the group's
manufacturing operations and the funds earned through the
sale of real estate properties developed under the SAC
plan.

With the revised plan, Eyco said the combined income from
the manufacturing operations and realty development will
"substantially augment the company's cash source" to allow
the group to "fully pay all creditors within a shorter
period of time."   (Business World  30-Aug-1999)

ITOGON-SUYOC MINES: Posts 2nd quarter loss
------------------------------------------
Listed mining firms continue to post losses as a result of
suspension of their operations. Itogon-Suyoc Mines, Inc.
also reported a net loss of PhP5 million (US$125,700) for
the second quarter of 1999 as against PhP10.6 million
during the same period last year. Its mining operation is
still on indefinite suspension due to the La Ni¤a weather
disturbance.  Recently, it amended its article of
incorporation to include real estate, energy development as
well as engineering construction. The move is similar to
the scheme employed by Benguet Corp., which plans to
diversify into the water distribution and tourism
development business with Baguio as the company's staging
ground.  (Business World  30-Aug-1999)

MONDRAGON LEISURE AND RESORTS: Misses fee payment
-------------------------------------------------
Clark Development Corp. (CDC) is again expected to take
over Mimosa Leisure Estate in Clarkfield, Pampanga anytime
after operator Mondragon Leisure and Resorts Corp. (MLRC)
failed to meet the Saturday deadline for the first payment
of a total of 325 million Philippine pesos (PhP) (US$8.17
million at PhP39.784:US$1) in overdue rental fees.

CDC has already started guarding the cash flow of the
leisure estate to prevent any unduly authorized exodus of
funds. It detailed at Mimosa's cashier office on Sunday
several CDC personnel as well as members of the Philippine
National Police. A look at the place Sunday morning,
however, showed it was business as usual at Mimosa.

Mondragon has moved to prevent any physical turnover of the
property. Last Friday afternoon, it filed a petition before
the Supreme Court for a seven-day extension of payment set
at PhP50 million (US$1.26 million). However, the High
Tribunal has yet to act on the plea.  Officials of
Mondragon were unavailable for comment.

"We served the notice to Mimosa. We expect (Mondragon) to
vacate the premises according to the agreement. We will ask
them to cooperate especially in the monitoring of cash
movements," CDC president and chief executive officer Rufo
Colayco said in an interview over the weekend.

CDC and MLRC signed last July 28 a renegotiated contract
for the operation of Mimosa.  Under the new contract, MLRC
would pay in six tranches its past arrears to CDC which
amounts PhP325 million. MLRC should likewise provide CDC a
letter of credit from bank creditors to guarantee payments
will be made during the six-month period starting in June.
None of these was delivered as of Saturday evening, the
deadline set by the contract.

In addition, MLRC would also have to pay PhP110 million
(US$2.76 million) a year for 44 years, with a 10% increment
for the first 10 years and 9.5% increment for the remaining
years. It would also pay PhP105 million in back dues to the
Bureau of Internal Revenue and Philippine Amusement and
Gaming Corp.  Mr. Colayco explained a strict monitoring of
Mimosa's cash flow would have to be made if only to ensure
that no cash movement "prejudicial to the government" will
be made.

"From all indications, we expect Mondragon to cooperate. In
fairness to MLRC, they faxed us a copy of their petition,
when under the rules, they are not required to do that,"
Mr. Colayco said.

CDC will file with the High Tribunal today a petition for a
writ of execution in response to the suspension plea filed
by Mondragon.  CDC first took over Mimosa in December last
year after MLRC refused to pay its rental obligations. The
issue was resolved only in June.  Mondragon has since
started restructuring its PhP5-billion (US$126 million)
debt incurred during the development of the leisure estate.
Mondragon is eyeing some PhP6.7 billion (US$168 million)
from the sale of its 40% interest to a strategic foreign
partner which is expected to be sealed anytime.  (Business
World  30-Aug-1999)

ORIENT COMMERICAL BANK: Debt write-off for Central Bank?
--------------------------------------------------------
The Bangko Sentral (Central Bank of the Phils.) may be
forced to write off some of the three billion Philippine
pesos (PhP) (US$75 million at PhP39.784:US$1) in emergency
loans extended to failed Orient Commercial Banking Corp. if
it fails to cover its exposure through the sale of the
bank's and its owner's assets.

In addition, it may have to extend PhP1.8 billion (US$45
million) in "funding assistance" to Allied Banking Corp. to
allow Orient Bank's depositors to withdraw 20% of their
uninsured deposits.

"We will collect on the emergency loans through
repossession, sale of assets, and the rest we have to write
off," Bangko Sentral Gov. Rafael B. Buenaventura made the
admission, contradicting his predecessor's earlier
pronouncement that taxpayers will not bear the burden by
writing off Orient Bank's loans.

These emerged after the policy-setting Monetary Board (MB)
last Friday approved Allied Bank's acquisition of Orient
Bank's license and branches, even if it meant the
government -- and thus, taxpayers -- will take a huge
haircut.  Mr. Buenaventura admitted it may take years
before the Bangko Sentral can recover from its losses in
Orient Bank since the property market is still in a slump.
"We may be able to collect much later when the economy
picks up," he told reporters.

He also admitted there is no obligation on the part of
Allied Bank, owned by tobacco and beer tycoon Lucio Tan, to
pay Orient Bank's nonperforming loans, cash advances and
emergency loans which, all in all, amounted to over PhP11
billion (US$276 million).  In exchange for acquiring the
license to run and relocate Orient Bank's 52 branches,
Allied Bank will only be made to absorb the PhP2.3-billion
(US$58 million) deposit liabilities of the failed bank.

Orient Bank depositors are then required to keep the
remainder of the funds with Allied Bank for five years at
2% interest per annum, Mr. Buenaventura said. He added
Allied Bank's proposal regarding the depositors still has
to be negotiated with the central bank.

To recoup its losses, he said the Bangko Sentral has
started to foreclose Orient Bank's assets. Earlier, Alberto
Reyes, Bangko Sentral deputy governor for bank supervision,
said regulators have already identified 500 land titles
belonging to Orient Bank owner Jose Go and his brothers
that the central bank can "attach" to its estafa case
against Orient Bank's owners.

But up to now, Mr. Buenaventura admitted regulators still
do not know how much the properties are worth. Valuation
procedures normally take months to finish and require
getting the services of more than two firms.  Critics have
blamed monetary authorities for failing to collect on
emergency loans extended to distressed banks and to
prosecute errant bankers.

An oft-cited case involves Banco Filipino Savings and
Mortgage Bank which was closed in 1985 and reopened in
1991. Until now, regulators are still unable to collect a
single centavo on the PhP3-billion (US$75 million)
emergency loans granted to Banco Filipino in 1984 and are
even facing an PhP18-billion (US$452 million) damage suit
in court.

Orient Bank was closed in October 14, 1998 after declaring
a bank holiday. Its bad loans were mostly extended to dummy
accounts belonging to its owners.  (Business World  30-Aug-
1999)

UNIWIDE GROUP: SEC bars Landbank from asset sale
------------------------------------------------
The Securities and Exchange Commission (SEC) recently
ordered the barring of state-owned Landbank of the
Philippines from conducting any extrajudicial sale of
properties owned by Uniwide Group of Companies.

It pointed out that its debt suspension order has the
effect of preventing any and all creditors of a beleaguered
company from proceeding against any of the company's
properties or assets.  The SEC hearing panel -- chaired by
SEC chairman Perfecto R. Yasay, Jr. -- told LandBank not to
proceed with its plans of selling six parcels of land in
Caloocan City owned by the Uniwide group's retail arm,
Uniwide Sales Realty and Resources Corp. (USRRC).

"The act of LandBank to extrajudicially sell USRRC
properties appear to be in outright defiance and
contravention of a lawful order, which may constitute
indirect contempt," the SEC said.

Although the scheduled sale of the Caloocan property last
August 26 did not push through, LandBank will not be
allowed to conduct any sale, even at a later date, for as
long as the debt moratorium is in effect, the SEC said.
The Commission also required LandBank president and chief
executive officer Florido P. Casuela and the bank's board
of directors to show cause why they should not be cited in
contempt or disobedience of the extended debt suspension
order issued by the SEC.

The Uniwide group earlier said the sale of the Caloocan
properties "will not only prejudice USRRC and greatly
affect the feasibility and viability of its (Uniwide)
rehabilitation but will also give due preference to
Landbank and result in undue discrimination against other
creditors."

Meanwhile, the Commission recently extended the Gow-owned
firm's debt moratorium to October 10 to give the newly
appointed interim receivership committee more time to
complete a rehabilitation plan that would be more
acceptable to the group's creditors.

The extension of the suspension order was in response to an
earlier request made by the interim receiver, chaired by
former Petron chairman Monico U. Jacob, to grant a 60-day
suspension of all actions for claims against Uniwide from
August 11, or the day the receivers took their oaths of
office.  (Business World  30-Aug-1999)


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

INDUSTRIAL FINANCE CORP.: Seeks Bt30 bn funding for debts
---------------------------------------------------------
THE Industrial Finance Corporation of Thailand (IFCT) plans
to raise a total of Bt30 billion through issuing an
additional Bt15 billion worth of debentures to finance its
loan repayment and credit expansion.

"Of the target of Bt30 billion, we have already found
Bt15.373 billion via bond and equity issuance," said Yada
Prapinmongkolkarn, executive vice president of IFCT.

However, she said the company had not set a time frame for
the balance, which depended on market conditions.
According to Yada, the company raised Bt15.373 billion via
the issuance of Bt4.55 billion in debentures and Bt1.5
billion in subordinated debentures. The rest was raised
through the issue of Bt278.6 million in new shares to
existing shareholders.

She said the IFCT had raised another Bt6.537 billion via
private placement, of which 49 per cent had been offered to
foreigners at Bt20.5 per share and 51 per cent to local
buyers at Bt18 each.  Asked why the IFCT had to seek as
much as Bt30 billion, Yada said: "We have to make loan
repayment to the creditors while receiving lower amounts of
loan repayment from our debtors."

Yada said the IFCT was obliged to make loan repayments of
up to Bt20 billion a year.  According to a source at the
IFCT, its non-performing loans (NPLs) peaked at 43 per cent
or Bt50 billion in May this year, but the figure has
started to come down. Currently its NPL stands at 42 per
cent.  Yada said the company expected to see its level of
NPLs falling to 27 per cent by the end of this year.

"The 27-per-cent target is possible because we have been
restructuring debts with large clients since last year, and
many deals are expected to be concluded this year," she
explained.

Beside loan repayment, the company has been seeking extra
funding to expand its lending to small and medium-sized
enterprises (SMEs). However, the company will not help
these companies refinance their problem loans with other
financial institutions.

"It is not our job to help refinance bad loans of other
banks. We aim to help our good and new customers to improve
their liquidity," she said.

The IFCT has also sought help from the government in
seeking new financing for the company.  The IFCT has
successfully sold Bt1.8 billion worth of its Lot 2
debentures to commercial banks, finance companies,
insurance companies and provident funds. The Bt1.8-billion
bonds are guaranteed by the Finance Ministry.  The Bt1.8-
billion issue includes the issuance of Bt980 million worth
of 5-year bonds carrying 6.3 per cent interest with
semiannual payment and the issuance of Bt820 million worth
of 7-year bonds with 7.3-per-cent interest.

Yada said the Bt1.8-billion bonds would be registered at
the Thai Bond Dealing Centre and traded in the repurchase
market.  The IFCT has requested the Finance Ministry to
guarantee the company's bonds worth a total of Bt4.8
billion. Of the Bt4.8 billion, the company has already
issued Bt3 billion while the remaining Bt1.8 billion will
be floated as Lot 2 issuance.

She said the Bt4.8-billion bonds issued by the company
would be combined with the Bt7.2-billion loans from the
Bank of Thailand under a special lending condition. The
company plans to lend the Bt12 billion to small and medium-
sized enterprises.  (The Nation  30-Aug-1999)

ITALIAN-THAI DEVELOPMENT: Owners to dilute stake
------------------------------------------------
The Karnasuta family will dilute its holding in Italian-
Thai Development Plc (ITD), the listed major building
contractor and flagship of related firms, to less than 60
per cent from the current 80 per cent following recent
completion of a US$200-million debt restructuring with
creditors.

The ongoing restructuring of ITD and related firms will
significantly shrink the once mighty conglomerate, which
consists of Italthai Industry, Italthai Trading, Siam Steel
Syndicate, Saraburi Cement and the Oriental Hotel, among
others.  Early next month Premchai Karnasuta, president of
ITD, will roadshow a new share issue of $75 million in the
world's major capital markets of Hong Kong, London and New
York to deleverage his family's holding.

Premchai holds a 30-per-cent stake directly in ITD while
other family members and affiliated firms hold the
remaining 50 per cent of shares directly or indirectly.
Premchai expects to raise Bt2 billion to Bt3 billion in
fresh funds for ITD, which took one full year to seal the
$200-million debt restructuring with 60 foreign and Thai
creditors.

Negotiations were tough, and the family had to commit
itself to deleverage. ITD's total debt was about Bt12
billion against its current paid-up capital of Bt4 billion.
In an interview with The Nation, Premchai said the planned
new share issue should dilute the family's holding by more
than 10 per cent. Another 10 per-cent-plus dilution will
come from the sale of existing shares currently held by
subsidiary Italthai Industry Plc, which itself owes another
Bt2 billion to Bt3 billion to creditors.

As part of its own debt restructuring, Italthai Industry is
to sell the ITD stake at the same time as repaying its own
debt.  Despite the ownership deleveraging, Premchai expects
his family to retain more than 51 per cent of shares in
ITD, a long-established contractor co-founded by his
father, Dr Chaiyudh.

ITD will be among at least eight Thai firms, including Siam
Cement Plc and Thai Military Bank, on the international
roadshow next month to raise a combined estimate of Bt200
billion in new capital after the window for fund raising by
Thai firms opened for the first time in two years in June.
July-August was for preparation to return to the capital
market, and Sept is the earliest opportunity, said
Premchai.

He said the recent conclusion of ITD's $200-million debt
restructuring had breathed new life into the flagship as
ITD had got a payment rescheduling for another five years
on condition that additional equities were raised to cover
ITD's total debt of Bt12 billion, including Bt7 billion in
medium-term loans.

With the planned raising of another Bt2 billion to Bt3
billion on top of the current paid-up capital of Bt4
billion, ITD will have a better debt-to-equity ratio
deleveraged to 2:1 or lower.  Beside Italthai Industry's
planned sale of its 10-per-cent-plus holding in ITD to
repay its own debt, another subsidiary, Siam Steel
Syndicate, has about Bt2 billion in debt, while trading
firm Italthai Plc has about Bt3 billion in debt, mainly due
to devaluation losses and economic recession.

The past two years have virtually wiped out Thailand's big
businesses, he said, adding that in the case of ITD
downsizing could be as much as 50 per cent eventually,
depending on the economic recovery over the next few years.
In the past one year alone, the ITD group's staff has been
reduced from about 40,000 to 30,000, while sales are
projected to fall to about Bt20 billion in 1999 from last
year's Bt30 billion.

But that is not surprising. Siam Cement Group, the
country's largest industrial firm, has so far downsized by
25 per cent.  During his roadshow to raise new funds,
Premchai will have to convince potential investors that ITD
will generate enough income to justify their investment.
With the $200-million debt-restructuring conclusion, he
said, ITD is now solid and ready to tap new business
opportunities when the Thai economy recovers.

In the meantime it will go overseas to tap more foreign
work in places such as Taiwan, the Philippines and India.
In Taiwan negotiations for a Bt30-billion contract to build
a 42-kilometre section of the 350-km high-speed train from
Taipei to Kaoshiung should be concluded in October, with
related work on train stations and commercial development
expected over the next five years.

In the Philippines a controversial deal for Bt14 billion to
reclaim land has been signed and another contract for Bt9
billion for infrastructure construction is expected to
follow.  In India, he said, ITD is preparing to bid for
World Bank and ADB-financed projects.  Overall it currently
has Bt36 billion worth of work in hand and expects to sign
contracts worth another Bt10 billion with government
agencies later this year, including a 50-km double
railtrack for the State Railway of Thailand worth about Bt4
billion and a major road bridge.

The Thai economic recession has meant many contractors
going out of business in the past two years as they have
been unable to collect debts, but ITD seems to have managed
to survive.  (The Nation  30-Aug-1999)

MERRILL LYNCH PHATRA: NOT part of Nakornthai Strip suit
-------------------------------------------------------
Merrill Lynch Phatra Securities wishes to confirm that,
contrary to a report carried in the Aug 23 edition of The
Nation, it has NO business dealings with Nakornthai Strip
Mill Plc's CEO Sawasdi Horrungruang, nor is it suing him.

In actual fact, it was Phatra Finance and Securities Plc
which filed a lawsuit against Sawasdi for a sum of Bt45.16
million in late 1997. Merrill Lynch Phatra Securities was
established after this date following a government ruling
that required companies to separate their finance and
securities businesses. The Nation apologizes for the
misunderstanding.  (The Nation  30-Aug-1999)

PADAENG INDUSTRY PLC: Creditors tell to find new partner
--------------------------------------------------------
Padaeng Industry Plc (PDI), Southeast Asia's sole zinc
smelter, has been instructed by its creditors to seek a new
strategic partner following the collapse of a planned
equity acquisition deal with Australian-based Western
Metals.

Creditors have suggested a one-and-a-half-year debt
moratorium ending in September next year to facilitate
PDI's partner search. The creditors, including Bangkok
Bank, agreed to postpone the debt payment which amounts to
1.14 billion baht from its original schedule on July 31,
1999 to September 15, 2000. This will allow Padaeng an 18-
month grace period for debt payment, starting the end of
February this year when it stopped paying the principal
after the Australia-based Western Metals gave up purchasing
of Padaeng's increasing capital amounting 75 million
shares.

PDI's chairman Arsa Sarasin said that under the new
agreement with creditors, PDI will be allowed to opt out of
paying the principal during the grace period but will have
to service the interest. After September 2000, PDI would
have to renegotiate with the creditors about debt
restructuring terms.

Currently, PDI owes almost Bt4 billion to nine creditors
who are both local and foreign banks.  Arsa said the
company has held discussions with six to seven potential
partners from the United States, Europe, and Australia. JF
Thanakom has been appointed as its adviser in the search
for a strategic partner.

"We are currently optimistic about seeking a new partner
since we have found our own raw material source in Tak and
are waiting for approval from the Mineral Resource
Department to expand," Arsa said.

Local raw materials will help PDI reduce costs and become
more attractive in from foreign partner's point of view, he
explained.

"Western Metals pulled out from acquiring PDI shares due to
its own financial problems. The collapse of this deal with
the Australian firm did not affect PDI's image or its
search for a new partner," Arsa stated.

In February, Western Metals scrapped its plan to buy 75
million capital increase shares of PDI to become its
largest shareholder. The Australian firm paid only one from
the total of four planned instalments allowing it hold only
4.3 per cent in PDI at present.  The 75 million capital
increase shares are planned to help PDI mobilise Bt1.142
billion to partially pay its debts. Another Bt2.285 billion
in debt would be paid with the company's cashflow.

Arsa said Padaeng still attract several investors who see
the company's potential in operating the business.
Furthermore, the company is asking to expand its
exploration area of ore-mines in Mae Sod, Tak province. The
additional area will increase the company's local mineral
reserve by about 10 to 15 years.

PDI earlier informed the Stock Exchange of Thailand (SET)
that its total outstanding debt was reduced to Bt1.637
billion as part of the debt has been paid. It also stated
that the search for a strategic partner was expected to be
concluded by the end of this year.  The Ministry of Finance
founded and holds the largest stake in PDI.  (The Nation,
Business Day  30-Aug-1999)

SIAM COMMERCIAL BANK: To trade subsidiaries for efficiency
----------------------------------------------------------
In a drive to optimise and downsize its organisation, Siam
Commercial Bank (SCB), the country's fourth largest bank,
has already wiped out at least 30 of its subsidiaries,
which numbered 101 during the economic boom.

SCB, long known as a bank with a huge number of
subsidiaries, announced the new policy to downsize and
refocus its efforts with an emphasis on its core business,
bank lending.  According to Maleeratna Plumchitchom, SCB
executive vice president, the bank has lowered exposure in
the 30 subsidiaries by closing down some and reducing
stakes in others.

As a result the bank's subsidiaries in various sectors --
real estate, industry, commerce, services, consulting,
medical services, warehousing, energy, communications,
leasing, finance and banking -- have been selectively wiped
from the list since late 1998.  Maleeratna added that
subsidiaries closed down included Siam Media Group and
those in the technology business, which had not been
performing.

According to a source in SCB, the bank's investment in
subsidiaries amounts approximately to between 16 and 17 per
cent of its equity, lower than the ceiling of 20 per cent.
The source said there was room for the bank to convert
debts to equity in debtors' companies as a part of the
debt-restructuring process.

"The room could be enlarged when investment portfolios are
slashed this year," he said.

Sataporn Jinachitra, the bank's senior executive vice
president, said earlier that now that debt restructuring
was underway that could result in debt-to-equity swaps and
SCB's investment could stay high.

"Such swaps are not against the bank's policy of refocusing
on its core business, since the bank will unload the
investments as soon as those companies see improved
business prospects," he said, adding that the conversion
would not greatly increase the bank's portfolios because
banks could convert debts into equity on a scale of up to
10 per cent of their equities.

By the end of this year SCB expects to further reduce its
investments, but the bank's executives have not disclosed
the number of subsidiaries targeted to be shut down or see
pull-outs.  Following the bank's successful
recapitalisation by employing government capital assistance
under the Aug 14 banking-restructuring scheme, as well as
the global share offering, SCB has overwhelmingly restored
its image.

It has become the first commercial bank able to set aside
100 per cent of the required provisions, and it has also
drastically restructured its management organisation,
including a change in the board structure and a change of
president. Jada Wattanasiritham replaces Dr Olarn
Chaipravat in that post.

As one of the first items in the order of business, Jada
announced a cut in both the human resources and the
subsidiaries. Early this year SCB reduced its staff of
12,000 by at least 1,570 through an early-retirement
programme. Among those retired were some executive
personnel, including Dr Olarn, the former president and
Prakit Pradipasen, the former senior executive vice
president.

During the latest management reorganisation several staff
members were called back from the subsidiaries to work at
the bank's head office.  Jada also announced a bank policy
of trimming its subsidiaries, which were classified into
two groups. The first, consisting of the core businesses
such as leasing and finance-and-securities companies, will
remain within the bank's structure, and only the best
outfits will be selected to do so.

The second group, the non-core businesses, is divided into
two categories, the supporting businesses and the strategic
investments.  The supporting businesses are those which
have been providing the bank with special expertise, such
as the bank's own law firm and research facilities. The
policy on this group of subsidiaries is to let them survive
on their own.

The strategic-investments group includes those businesses
in which the bank owns up to 10 per cent of the stock, such
as American Appraisal (Thailand) Ltd and companies earlier
presumed by the bank to be good investments, such as Siam
Sindhorn Co Ltd and Christiani & Nielsen (Thai) Plc.  The
bank is planning to gradually reduce its portfolio in these
companies, particularly in the non-performing ones.

"The bank needed to choose whether it would like to be an
owner or a lender. Considering that we were in the banking
business and there were already external shareholders in
each of the subsidiary companies, we told others that we
intended to be only lenders, and we will back off from both
shareholding and directorships in these companies
gradually," Jada said.  (The Nation  30-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

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