TCRAP_Public/990901.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, September 1, 1999, Vol. 2, No. 170


* C H I N A  &  H O N G  K O N G *

BILISON (ASIA) LIMITED: Facing petition for winding up
CAST ROAD DIE CASTING FACTORY: Facing winding up petition
CHETEX LIMITED: Facing petition for winding up
DRANSFIELD HOLDINGS: Posts annual loss
FULLHALL COMPANY LIMITED: Facing petition for winding up
GOLDLION HOLDINGS: To restructure to overcome losses
GOODWIN INVESTMENT LTD.: Facing petition for winding up
GRACE MARKET LIMITED: Facing petition for winding up
GUANGZHOU FINANCE: On verge of wind up
KARSUN INT'L (HOLDINGS) LTD.: Facing winding up petition
KIN DON HOLDINGS: Posts first-half loss
NANJING PANDA ELECTRONIC: Posts first-half loss
PALADIN GARMENT LTD.: Facing petition for winding up
SHING LEE ENGINEERING: Facing petition for winding up

* K O R E A *

DAEHAN INVESTMENT: Regent Pacific Grooup to manage
DAEWOO GROUP: Subsidiaries' cross-assistance blocked
DAEWOO GROUP: Creditors to sell securities arm w/in 6 mos.
DAEWOO GROUP: Chairman loses virtually all power
DAEWOO GROUP: To sell Seoul Hilton via open bidding
KANGWON BANK: FSC finds loan ceiling violation
KOREA FIRST BANK: FSC finds loan ceiling violation
KOREA LIFE: Court rules against FSC
LG MERCHANT BANKING CORP.: FSC finds loan ceiling violation
OVERSEAS UNION BANK: FSC finds loan ceiling violation
SEOUL BANK: FSC finds loan ceiling violation
SEOUL BANK: Deal with HSBC dead, Gov't funds ahead

* M A L A Y S I A *

TRANS CAPITAL HOLDING: Proposes debt restructuring

* S I N G A P O R E *

METRO HOLDINGS: Ship sinking creates extraordinary loss

* T H A I L A N D *

ASIA FIBER: Posts annual loss
BANGKOK BANK: Posts first-half loss
NAKHON SAWAN INDUSTRIAL: Debt-rehab planner sued
QUALITY HOMES: Stock issuance part of debt rehab
SHIN CORPORATION: Exploring bond issuance to reduce debt
THAI EKALAK SUGAR CO.: Debt-rehab planner sued
THAI FARMERS BANK: No longer can support subsidiary
THAI METAL WORK CO.: Debt-rehab planner sued

C H I N A  &  H O N G  K O N G

BILISON (ASIA) LIMITED: Facing petition for winding up
The High Court of Hong Kong Sar has scheduled a hearing for
September 15 on the petition of Leung Kam Sing for the
winding up of Bilson (Asia) Limited. A notice of legal
appearance must be filed on or before September 14.

CAST ROAD DIE CASTING FACTORY: Facing winding up petition
The High Court of Hong Kong Sar has scheduled a hearing for
September 29 on the petition of Chong Ming Kwan for the
winding up of Cast Road Die Casting Factory Limited. A
notice of legal appearance must be filed on or before
September 28.

CHETEX LIMITED: Facing petition for winding up
The High Court of Hong Kong Sar has scheduled a hearing for
September 8 on the petition of The Hongkong and Shanghai
Banking Corporation Limited for the winding up Chetex
Limited. A notice of legal appearance must be filed on or
before September 7.

Weak consumer demand saw electronic products and footwear-
maker Cybersonic Technology record a net loss of $51.61M
for the year ended March 31, compared with a profit of
$6.02M in the previous year.  Turnover fell 68.14% to
$128.68M.  No final dividend was recommended.

DRANSFIELD HOLDINGS: Posts annual loss
Consumer products maker Dransfield Holdings has revealed a
$139.54M attributable loss for the year ended March 31, up
from a loss of $15.96M the year before.  Turnover was
$224.98M, down from $358.14M previously, while losses per
share were 13.62 cents, up from 2.36 cents per share.

FULLHALL COMPANY LIMITED: Facing petition for winding up
The High Court of Hong Kong Sar has scheduled a hearing for
October 20 on the petition of Poon Hung Mui for the winding
up of Fullhall Company Limited. A notice of legal
appearance must be filed on or before October 19.

GOLDLION HOLDINGS: To restructure to overcome losses
Garment manufacturer and retailer Goldlion Holdings says it
is restructuring its business to focus on design, style and
material in order to renew the "Goldlion" brand after
suffering losses in the last financial year.

The company, vowing to return to profitability this year,
said it will also fire unproductive staff.  The group
recorded an exceptional stock provision of $250 million for
slow moving stocks in the financial year ended 31 March.

"People get old, brands get old, but the business mind will
not get old," according to Goldlion's 65-year-old chairman
Tsang Hin-chi, who is also a standing committee member of
the National People's Congress.

Mr Tsang yesterday said Goldlion will employ new designers
and merchandisers. Non-productive staff will be replaced,
he said. He said the value of the company's inventory had
remained at about $170 million since April and whether any
more provisions would be made "depended on the situation".
He said that the mainland consumers now pay more attention
to brand names and high-end products rather than prices.

"Cut-throat prices will only damage the brand's image and
consumers will have no confidence in buying your products
when prices always fluctuate," Mr Tsang said.

Goldlion raised prices by 10 to 15 per cent in the mainland
last year when the retail market was quiet, he said.
However, the group experienced a 50 per cent increase in
its purchase orders for the first half of next year
compared with the same period this year.  The increase in
purchase orders reflects the mainland consumers' support of
"Goldlion" which has resulted in increasing demand for its
product line.

Mr Tsang said the firm has two principles in doing business
which are: no sales with more than 10 per cent discount and
all transactions must be in cash to avoid bad debts.  Mr
Tsang expects the group to record a net profit this year.
The group has changed its financial year to end on 31
December instead of 31 March. The previous financial year
ended 31 March 1999.

General manager Lo Wut-wut said orders placed for the first
six months of next year so far were 50 per cent up on the
same period this year.  She said the company now required
wholesale customers to place orders in advance to keep
inventory low by avoiding excess production.

Goldlion had a net loss of $181 million in the last
financial year versus a net profit of $214 million in the
previous period.  Turnover fell 32 per cent to $689 million
from $1 billion in the last period.  The group now has
about $300 million cash on hand and short-term debts of $12
million. Stock clearance has been hindered by the slack
economy.  (Hong Kong Standard, South China Morning Post  

GOODWIN INVESTMENT LTD.: Facing petition for winding up
The High Court of Hong Kong Sar has scheduled a hearing for
September 15 on the petition of Sit Yuk Chun, Anit for the
winding up of Goodwin Investment Limited. A notice of legal
appearance must be filed on or before September 14.

GRACE MARKET LIMITED: Facing petition for winding up
The High Court of Hong Kong Sar has scheduled a hearing for
October 27 on the petition of Au-Yeong Chee for the winding
up of Grace Market Limited. A notice of legal appearance
must be filed on or before October 26.

GUANGZHOU FINANCE: On verge of wind up
Hong Kong's Court of First Instance yesterday halted a move
to wind up Guangzhou Finance, but said its ultimate
controlling shareholders should formally declare their
support to the company to prevent its break-up.

Justice Doreen Le Pichon yesterday adjourned the winding up
hearing on Guangzhou Finance, the finance arm of the
Guangzhou municipal government, to 13 December.  But the
judge decided to require the municipal government to submit
a letter of intent on or before 20 October to confirm its
support on a debt restructuring proposal.  She said hearing
on winding up the company would resume on 25 October if the
court fails to receive any letter of intent by the 20
October deadline.

Guangzhou Finance is the Hong Kong unit of Guangzhou
International Trust and Investment Corporation (Gzitic)
which is owned by the Guangzhou municipal government.
The troubled Gzitic is now conducting debt restructuring
negotiations with more than 130 foreign financial

Adrian Huggins, counsel for Gzitic's adviser
PricewaterhouseCoopers, yesterday said a specific debt
restructuring proposal has been circulated among creditors
by the Standard Chartered Bank, the liaison bank and the
head of a steering committee representing Gzitic creditors.
Creditors, however, want a written confirmation from the
Guangzhou municipal government showing its support for the
proposal.  That is the reason, Mr Huggins said, we asked
for a halt in the winding-up hearing.

Early this month, the financial adviser proposed a debt
restructuring plan to repay 35 per cent of Gzitic's debt by
cash payment and 15 per cent by the sale of assets.  (Hong
Kong Standard  31-Aug-1999)

KARSUN INT'L (HOLDINGS) LTD.: Facing winding up petition
The High Court of Hong Kong Sar has scheduled a hearing for
September 8 on the petition of The Hongkong and Shanghai
Banking Corporation Limited for the winding up of Karsun
International(Holdings)Limited. A notice of legal
appearance must be filed on or before September 7.

KIN DON HOLDINGS: Posts first-half loss
Apparel maker Kin Don Holdings slid into a net loss of
$42.8M for the six months to May 31 from a net profit of
$52.66M previously, hit by an exceptional loss of $58M.  
Operating profit slumped 76.27% to $14.68M.  No dividend
was proposed.

NANJING PANDA ELECTRONIC: Posts first-half loss
H share Nanjing Panda Electronic saw its interim loss for
the six months to June 30 trimmed to 107.83M yuan from
192.48M yuan a year earlier.  Turnover, at 668.99M yuan,
was down 33%.  Basic losses per share were 16 fen, compared
with 30 fen.

PALADIN GARMENT LTD.: Facing petition for winding up
The High Court of Hong Kong Sar has scheduled a hearing for
September 15 on the petition of Leung Chi Kin for the
winding up of Paladin Garment Limited. A notice of legal
appearance must be filed on or before September 14.

SHING LEE ENGINEERING: Facing petition for winding up
The High Court of Hong Kong Sar has scheduled a hearing for
September 15 on the petition of The Hongkong and Shanghai
Banking Corporation Limited for the winding up of Shing Lee
Engineering Company Limited. A notice of legal appearance
must be filed on or before September 14.


DAEHAN INVESTMENT: Regent Pacific Grooup to manage
The Regent Pacific Group will take over management of
Daehan Investment Trust Co. by investing 400 billion won,
officials of the two sides announced yesterday.

Daehan president Kim Chong-hwan told a press conference
that the two parties will soon sign a memorandum of
understanding (MOU) to that effect. He said the size of
Regent's investment was agreed on during his meeting with
Regent chairman Jim Mellon on Aug. 26.

"Daehan will increase its capital from the present 200
billion won to one trillion won by attracting 400 billion
won from Regent and another 400 billion won through a
rights offering to general investors," Kim said.

In June, the two sides reached an agreement that the
British investment group would invest 200 billion won for a
50-percent controlling stake in Daehan.  Kim said the
capital increases from Regent's equity investment and
rights offering will be used to repay the company's debt
totaling 1.5 trillion won by the end of next year.

"Then, we plan to list Daehan on the KOSDAQ stock market,"
he added.

He also said Regent intends to invest a total of $1.2
billion in the Korean financial sector to branch out into
investment trusts, merchant banking and the insurance
business. Regent plans to set up a financial holding
company, dubbed Regent Korea, by investing $130 million to
manage these operations.

Koh Chang-gon, president of the brokerage firm, said that
Daehan's incumbent managers will be retained after Regent's
assumption of managerial rights.  Daehan invited Regent to
participate in its recapitalization plan after failing to
have its present major shareholders take the rights issues.

Currently, Hanvit Bank is the largest shareholder of Daehan
with a 19-percent stake, and the rest have less than 10
percent. They all rejected Daehan's request for
participation in the rights offering. (KHC) Established in
1990, the British financial group has invested some $3
billion around the world, mostly in emerging markets.
(Korea Herald  31-Aug-1999)

DAEWOO GROUP: Subsidiaries' cross-assistance blocked
The government and domestic creditor banks of the ailing
Daewoo Group yesterday decided to block financial
assistance among its subsidiaries in a bid to hasten the
group's breakup.

The decision came after the chief of the nation's financial
watchdog urged the heads of nine creditor banks to halt the
decades-old practice of cross-unit financial aid.

"Daewoo's units should be thoroughly blocked from engaging
in cross-unit financial assistance," Financial Supervisory
Commission chairman Lee Hun-jai stressed. "Creditor banks
should provide emergency loans to each unit put under debt-
workout programs, not to the group."

Lee said that any dispute between Daewoo's affiliates and
banks regarding funding will be settled by the FSC, meaning
the government will be ultimately in charge of the group's
restructuring process.

The decision to halt cross-unit financing is widely seen as
signaling the start of the dismantling of the nation's
second largest conglomerate.  Like other conglomerates,
Daewoo's units are closely linked with one another
financially, as profitable subsidiaries have extended
financial aid to loss-making ones to keep the entire group
afloat. Daewoo Corp., the group's trading and construction
arm, has served as the group's negotiator with lenders to
secure loans.

The ban on cross-unit financial aid means that each unit
put under a workout program should deal with its creditors
on its own.  The measure follows the creditor banks'
blitzkrieg move last week to put 12 of Daewoo's 25
subsidiaries - including Daewoo Corp. and Daewoo
Electronics Co. - under corporate rehabilitation programs
to avert their collapse.

Under the programs, the debts of the 12 units will be
frozen for three months.  In the meeting, Lee also called
on the creditors to begin due diligence on the 12 Daewoo
units placed under emergency rescue programs by Tuesday at
the latest.

To boost the fairness and transparency of due diligence,
the creditors decided to hire foreign accounting and
consulting firms to value the assets and liabilities of the
shaky Daewoo units.  The creditor banks also agreed to
provide $700 million in export financing to Daewoo units
and its suppliers in a bid to ease their liquidity

In addition, the creditors decided to take over Daewoo
Securities Co., the group's cash cow, which was excluded
from the workout list.  The creditor banks will acquire
Daewoo's 16.83-percent stake in the nation's largest
brokerage house by Tuesday and sell it off, a creditor bank
official said.  (Korea Herald  31-Aug-1999; Korea Times  

DAEWOO GROUP: Creditors to sell securities arm w/in 6 mos.
The six banks which jointly took over Daewoo Securities
Monday said yesterday they plan to sell off the brokerage
house within six months.

The six creditors took over the group's 14.87-percent stake
in the brokerage house, excluding Daewoo chairman Kim Woo-
choong's 1.51-percent stake. Kim's shareholdings had been
set aside to repay Daewoo Motor's debt.  A bank official
said the creditors are contacting potential buyers of the
nation's No. 1 securities firm, including the Cheiljedang
Group and Commerzbank, the German partner of Korea Exchange

"We plan to sell it off as quickly as possible and use the
proceeds to repay Daewoo firms' debts," he said, adding
that the sales process will proceed smoothly as the
brokerage house is profitable and well positioned in the
domestic market.

The creditors plan to increase their stake before the sale
because the 14.87-percent stake is too small to give the
buyer managerial control of the company.

"They will raise their stake by collecting unclaimed issues
in the planned new rights offering and placing new issues
with a pre-designated party," the official said.

According to industry sources, besides Cheiljedang and
Commerzbank, several other domestic and foreign firms are
interested in Daewoo Securities. They include the Lotte
Group, the U.S.-based Citibank, Merrill Lynch International
and Prudential Insurance, along with the U.K.-based Hermes
Pension Fund, which holds a 7.38-percent stake in Daewoo

Prudential has reportedly expressed interest in the
brokerage house and Seoul Investment Trust, a company in
which Hanjin Investment Securities Co. has larger
shareholdings than Daewoo Securities. Recently, Prudential
acquired a 50-percent stake in Hanjin.  (Korea Herald  01-

DAEWOO GROUP: Chairman loses virtually all power
Business leader Kim Woo-choong has virtually lost his
status as the chairman of the Daewoo Group, government
regulators declared yesterday.

Kim Young-jae, a spokesman for the Financial Supervisory
Commission, said that Chairman Kim will be barred from
intervening in the management of all Daewoo Group
companies, except flagship Daewoo Corp. and Daewoo Motor,
in the wake of creditors' decision to sever capital flows
among Daewoo affiliates.

"Even at Daewoo Corp. and Daewoo Motor, Chairman Kim will
be allowed to exercise only limited managerial rights, as
the two firms are now under "workout" debt-rescheduling
programs, which will entail massive debt-to-equity swaps,"
the spokesman said.

As a result, restructuring moves at Daewoo Heavy
Industries, Daewoo Electronics and other Daewoo companies
will proceed without Kim's influence and control, he

"Professional managers at each of the Daewoo companies are
now urged to act on their own judgment and do their best to
maximize profits, paying no attention to the intentions of
the chairman," he said.

Industry watchers, meanwhile, said that Kim Woo-choong's
retirement from his concurrent chairmanship of the
Federation of Korean Industries, the nation's biggest trade
association for the chaebol, appears imminent.  (Korea
Herald  31-Aug-1999)

DAEWOO GROUP: To sell Seoul Hilton via open bidding
The Daewoo Group will put up the Seoul Hilton for sale
through a public bidding.

The group said yesterday that a deal with General
Mediterranean Holding Co. of Luxembourg collapsed because
the latter failed to pay the proceeds for the sale of the
hotel by the deadline, which was yesterday.  Daewoo sources
said General Mediterranean has asked Daewoo to buy back the
hotel after a certain period of operating the hotel under
its management.

Daewoo is confident of finding a buyer through a public
bidding because the hotel's operation has been in the
black, they added.  (Korea Herald  01-Sep-1999)

Hyundai Heavy Industries (HHI) will be commissioned to
manage Halla Heavy & Engineering Industries Co., the
bankrupt ship-plant-heavy equipment making unit of the
Halla Group, group officials said yesterday.

Halla Heavy said that its assets and debts will be
transferred to Roth Halla Heavy Industries, a court-
appointed paper company, which will in turn be managed by
HHI. The company added that relevant consultations with the
court, creditor banks and HHI have already been completed.

"Hyundai decided to accept Halla Heavy's request for
commissioned management out of its hope to keep the
nation's major industrial infrastructures afloat," a
spokesman for HHI said.

He noted that creditor banks will swap about 100 billion
won ($84 million) of Halla Heavy's 750 billion won in debts
for equity investments.  Stressing that Hyundai Heavy will
participate only in the management of Halla Heavy, the
spokesman ruled out the possibility of a full-scale
takeover deal.

"Halla Heavy will be able to seek to revive its orders,
external credit standing and management eventually,
operating under the umbrella of Hyundai Heavy for the time
being," he said.

He explained that Hyundai's mergers and acquisitions
capabilities are greatly restricted by its own acute need
to meet the government-imposed debt-to-equity ratio target
of below 200 percent by the end of the year. Halla Heavy
was declared bankrupt in late 1997 and placed under court
receivership last November. Halla Group founder Chung In-
yung is a younger brother of Hyundai Group founder Chung
Ju-yung.  (Korea Herald  31-Aug-1999)

KANGWON BANK: FSC finds loan ceiling violation
KOREA FIRST BANK: FSC finds loan ceiling violation
LG MERCHANT BANKING CORP.: FSC finds loan ceiling violation
OVERSEAS UNION BANK: FSC finds loan ceiling violation
SEOUL BANK: FSC finds loan ceiling violation
Korea First Bank (KFB), Seoul Bank, LG Merchant Banking
Corp., Kangwon Bank, and Overseas Union Bank of Singapore
were found to have violated a ceiling on "large-amount
credits" to corporate borrowers, the Financial Supervisory
Service (FSS) said yesterday.

A large-amount credit refers to one that goes beyond 10
percent of a lender's equity capital. Under the ceiling,
the combined sum of a financial institution's large-
denomination credits extended to corporate borrowers should
not exceed its net worth by more than five times. Large-
denomination credits cover loans, loan guarantees and other
financial transactions.

As of June 30, KFB and Seoul Bank, both with negative net
worths, had given out large-amount credits of 14.9 trillion
won and 13.2 trillion won, respectively, exceeding the cap.
Kangwon Bank also exceeded the ceiling by offering 2.6
trillion won in large-amount credits, which represented
19.53 times its equity capital, the financial watchdog

Kangwon Bank, in which the Hyundai Group had a controlling
stake, will soon be merged with Cho Hung Bank.  Of foreign
bank branches operating here, Overseas Union Bank of
Singapore was the only one that broke the credit ceiling.
The Seoul branch of the Singaporean bank had large-amount
credits of 32.7 billion won, or 7.98 times its net worth,
the watchdog said.

LG Merchant Banking Corp. was also found to have broken the
credit cap, with its large-denomination credits amounting
to 1.2 trillion won, or 5.11 times its equity capital.
As of the end of June, the banking circle's large-amount
credits totaled 106.3 trillion won, or 2.02 times their
combined net worth.  Merchant banks' large-amount credits
to the same borrower stood at 8.7 trillion won, or 3.17
times their equity capital, the watchdog said.

The FSS expected the five violating financial institutions
to eliminate large-amount credits exceeding the ceiling by
March next year.  (Korea Herald  01-Sep-1999)

KOREA LIFE: Court rules against FSC
It was another humiliating day for the government yesterday
as a life insurance company won a legal battle against the
nation's financial authority over its ongoing recovery.
The Seoul Administrative Court ruled in favor of Korea Life
Insurance, saying the Financial Supervisory Commission's
bid to scrap existing shares of the insurance firm was

The court also ruled that incumbent members of the board of
directors would retain their management authority,
rejecting the government's appointment of a new supervisor
in charge of Korea Life's restructuring.   The court
nonetheless declined Korea Life's demand for the
cancellation of the government's designation of the ailing
insurance company as insolvent.

"It is felt that the FSC did not give Korea Life's present
management a sufficient chance to revive the firm before
issuing administrative orders," the court stated.  "The FSC
claimed the economy was in such dire straits that it could
not take proper administrative steps. However, the court
finds that the economy was in fact not in a desperate state
when the Korea Life issue came up," it added.

The administrative court dismissed the FSC's claim that the
Korea Life situation even had the potential to drive the
nation into another crisis, adding that the economy would
not be disrupted by such issues.   Supported by the final
court ruling, Panacom of the U.S. is now likely to form an
alliance with the present management of Korea Life, headed
by Choi Soon-young, after injecting initial capital of 50
billion won.

Panacom plans to raise up to 3 trillion won worth of funds
for the full recovery of the ailing life insurance company.
The FSC's policy banning Korea Life from forming a
partnership with the U.S. pension fund by issuing new
shares was rejected last week by Seoul District Court.
The district court said Korea Life's additional stock issue
does not run counter to the financial regulator's policy
aimed at rescuing the insurance firm from its recent
financial distress.

The court added in the ruling that it is the government who
should refrain from injecting additional public funds, not
the U.S. investor.   Declaring Korea Life insolvent on
August 6, the financial regulator said it would scrap all
existing shares of the firm by August 14 and inject 1.5
trillion won in public funds to nationalize the insurer.
Korea Life's chairman filed a lawsuit, however, demanding
the nullification of the FSC decision, which led to a
surprise victory in the firm's legal confrontation with the
local financial regulator.

Choi is now serving a five-year prison term for violation
of foreign exchange transaction laws.  The local financial
regulator and the Korea Life-Panacom alliance 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 several occasions that Panacom was a "paper
company," incapable of raising the huge amount of capital
needed to take over Korea's third-largest insurance firm.  
Then last week the U.S. investor sent a letter to the FSC
saying 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 it would take a legal
steps against the U.S. firm for threatening the Korean
government.  (Korea Times, Digital ChosunIlbo  31-Aug-1999)

SEOUL BANK: Deal with HSBC dead, Gov't funds ahead
The Financial Supervisory Commission (FSC) announced
yesterday the formal breakdown of its five-month-long
negotiations to sell the ailing Seoul Bank to HSBC Holdings

The financial watchdog also said the government will soon
put public funds into the nationalized bank in order to
normalize its operations.

"Government negotiations with HSBC on the sale of Seoul
Bank have fallen apart," said Nam Sang-duck, a senior FSC
official in charge of the sale. "Both sides have failed to
iron out their differences on key terms."

Nam, however, refused to disclose the differences, saying
that the FSC and the British bank agreed not to reveal the
reasons for the collapse of their talks.  Earlier Monday,
FSC Chairman Lee said that both sides were not holding
talks because of their differences in valuing the bank's
loan portfolio.

The government and HSBC signed a memorandum of
understanding in late February to start negotiations on the
sale of the bank. Both sides failed to meet a May 31
deadline for concluding the deal.  The sale of Seoul Bank,
together with another nationalized bank, Korea First Bank,
is one of the promises the Korean government made to the
International Monetary Fund in return for a $58 billion
bailout loan. Foreign investors have also considered the
sale of Seoul Bank as a litmus test of Seoul's willingness
to reform its economy.

Nam said that the IMF has given the nod to the government's
halting of the negotiations with HSBC to sell the
nationalized bank.  Instead of pushing for the sale of
Seoul Bank for the time being, the government will pick a
competent financier or a "prestigious" foreign financial
organization to run the bank, he said.

"The replacement of Seoul Bank's top manager is to stick to
the purpose of the bank's sale, which is to introduce
advanced financial techniques," the FSC official said.

He said the government will not try to sell Seoul Bank off
until its operations "return to normal" but it failed to
say how long it will take.   To turn the troubled bank
around, the government will soon inject public funds into
it, Nam said.

"After looking into the outcome of an assessment of Seoul
Bank's assets and liabilities, the government will decide
on the amount of public funds," the official said.

Because of large bad loans, the bank has difficulty in
operating normally and the injection of public funds is
urgently needed, he added.  So far, the government has
pumped 1.3 trillion won in taxpayers' money to keep the
bank afloat. As the failure of the negotiations has now
become official, the government has announced that
government funds ranging from W4-5 trillion will be
injected to normalize the ailing bank's operations, after
which it will be put up for auction to foreign buyer.
(Korea Herald  01-Sep-1999; Digital ChosunIlbo  31-Aug-


TRANS CAPITAL HOLDING: Proposes debt restructuring
Trans Capital Holding Bhd (TCHB), which manufactures
electronic components and rubber-based products, has
proposed a debt restructuring exercise and a rights issue.

Malaysian International Merchant Bankers Bhd said in a
statement on behalf of Trans Capital yesterday that the
debt restructuring exercise was expected to include the
conversion of the debts into appropriate debt instruments
and equity linked securities that are convertible into new
Trans Capital shares.

Trans Capital is currently negotiating with 12 lender banks
and financial institutions to restructure the debts of its
wholly-owned subsdiary Trans Capital Sdn Bhd (TCSB).
The statement said that the group was also proposing a
rights issue of up to 59,997,500 new shares together with a
maximum of 59,997,500 free detachable warrants to its
shareholders at an issue price of RM1 per share on the
basis of 5 rights issue shares together with 5 warrants for
every 4 existing shares.  (Star Online  31-Aug-1999)


METRO HOLDINGS: Ship sinking creates extraordinary loss
Metro Holdings said the loss of Sun Cruises Holdings'
flagship cruise vessel, Sun Vista, will result in an
estimated extraordinary loss for Metro and its subsidiaries
of $35 million, net of minority interests, for the year
ending March 31, 2000. The extraordinary loss would have
reduced the consolidated net tangible assets per share of
the Metro Group as at March 31, 1999, from $4.80 to $4.47.
(Business Times  31-Aug-1999)


ASIA FIBER: Posts first half loss after annual loss
Asia Fiber Plc posted a net loss of Bt119.74 million for
the first-half of the year ending June 30, improving from a
Bt334.8-million net loss over the same period last year.  
(Bangkok Post, The Nation  31-Aug-1999)

BANGKOK BANK: Posts first-half loss
Bangkok Bank posted audited H1 losses of 26.88 billion
baht, or 18.33 baht per share.  Last year, the bank posted
losses of 16.38 billion baht, or 14.12 baht per share.
The bank posted consolidated first-half losses of 26.98
billion baht, or 18.4 baht per share, and compared with
losses last year of 16.35 billion baht, or 14.09 baht per

NAKHON SAWAN INDUSTRIAL: Debt-rehab planner sued
THAI EKALAK SUGAR CO.: Debt-rehab planner sued
THAI METAL WORK CO.: Debt-rehab planner sued
A small creditor of one of three sugar mills in Nakhon
Sawan yesterday filed a lawsuit against South Sathorn
Planner Co, which is drawing up a debt restructuring plan
for the three firms which owe their creditors more than 20
billion baht.

Kriang Visitsora-art, president of Visitsora-art Law
Office, the lawyer of Thai Metal Work Co, said his client
accused the firm of formulating a plan to favour only
certain creditors and cause damage to other creditors.
He told the court that South Sathorn Planner had proposed
writing down shares of the three sugar mills to one satang
to allow the creditors to take over the three companies.
The companies-Thai Ekalak Sugar Co, Nakhon Sawan Industrial
Co and Thai Metal Work Co-had lent 2.9 million baht to
Kaset Thai Sugar Co.

He claimed in court that the plan aimed to ruin the
companies rather than rehabilitate them by falsifying
information about the three mills. He further claimed that
the three mills had combined assets of 18.2 billion baht,
but that they had been written down to only 693 million

Three executives of South Sathorn Planner and an executive
of Kaset Thai Sugar Co were also charged as co-defendants.
They were Supasak Krishnamara, Andrew Cameron and David
Kennedy of South Sathorn Planner, and Traithip Suksapha of
Kaset Thai Sugar.

Mrs Traithip was charged with irregularities over a payment
of 20.45 million baht to South Sathorn Planner as a fee for
drawing up a debt restructuring plan.  The court has set
October 28 for the first hearing.

Earlier this year three executives of South Sathorn Planner
were arrested and charged by police with masterminding the
murder of an Australian auditor, Michael Wansley. He was
believed to have been killed because he discovered
irregularities in the three mills' books. His slaying
attracted international condemnation.  (Bangkok Post  31-

QUALITY HOMES: Stock issuance part of debt rehab
QUALITY Houses Plc, the country's leading high-rise
property developer, is to issue 760.4 million capital-
increase shares to complete its Bt9.31 billion debt-
restructuring plan.

General manager Suang Chaisurote said in a statement that
of the total, 220 million shares would be offered to
existing shareholders in the proportion of 1:1 at a price
of more than Bt6.25 apiece. Another 330 million and 60
million shares will be reserved for soon-to-be-issued and
recently-issued warrants, respectively.  The remaining
150.4 million shares will be offered in a private placement
to foreign investors at a price of more than Bt6.25 each.
The terms and the buyers have not yet been determined.

As a result, the company's registered capital will be
increased to Bt10.31 billion from the current Bt2.71
billion.  Shareholders are to be issued three warrants for
every two new shares bought. The warrants may be exercised
every three months within a term of three years. The
warrants will also be traded on the stock exchange.

Early this year, the company wrote down its paid-up capital
from Bt4.39 billion to Bt2.2 billion with the aim of
writing off accumulated losses. The reduction was a part of
its debt-restructuring scheme.  Quality Houses said the
proceeds of the capital increase would be used to lower
project-financing debt, interest expenses, and other
current liabilities amounting to Bt1.2 billion, and to
raise Bt175 million in working capital.

In June, the company said it had reached agreement with
most creditors on a debt-restructuring plan involving the
conversion of 15 to 20 per cent of its debt into equity,
and refinancing of its short-term debt through the issue of
seven-year convertible debentures with a 2 per cent coupon

The capital-increase plan is subject to the approval of
shareholders at a meeting scheduled for Sept 27.
After the debt-restructuring process is completed, Quality
Houses' existing shareholders' stakes will be diluted by
one half: the ownership of Land and Houses Plc and its
major shareholder Anant Asvabhokin will be reduced to 12.5
per cent, while the holdings of American International
Assurance Co and the Srivikorn family will be diluted to 6
per cent and 3 per cent.

The share price of Quality Houses closed unchanged
yesterday at Bt16.  Nine listed property developers --
including Italian-Thai Development Plc, Land and Houses
Plc, Golden Land Plc, Krisadamahanakorn Plc and San Siri
Plc -- have already completed debt-restructuring plans
worth a combined Bt73.75 billion of outstanding debt, while
debt-restructuring plans for a number of other property
firms are under way.  (The Nation, Dow Jones  31-Aug-1999)

SHIN CORPORATION: Exploring bond issuance to reduce debt
Shin Satellite Plc, in an effort to write off its overseas
debt, is negotiating with four commercial banks to issue
domestic bonds worth two billion baht with maturities of
three to five years.

The operator of the Thaicom1, 2 and 3 satellites has hired
Bangkok Bank, Siam Commercial Bank, Citibank and Deutsche
Bank to conduct a feasibility study on the proposed bond
issue.  The banks propose two packages for the bond issue
ranging from a maturity of one year to a period of three to
five years.

According to a top executive at Shin Corporation, Shin
Satellite might issue a three-to-five year domestic bond
rather than a one-year maturity, in line with the company's
cashflow position.  The source said the bond issue, if
approved, would be completed within 45 days.  Previously,
Shin Satellite planned to issue a three-billion-baht
domestic bond, but the company later scaled that down to a
two-billion-baht issue.

The issue of the two-billion-baht domestic bond will enable
Shin Satellite to retire its foreign debt of US$130 million
with an annual fixed interest rate of 7.5%.  Earlier, the
firm raised 1.75 billion baht in capital and paid some
foreign debt, halving its debt to equity ratio to 2:1.
Analysts predict that the bond issue will draw strong
interest from the public, citing the company's financial
health, despite the end of its monopoly right later this

But one source said if Shin Satellite failed to raise funds
in the domestic market, it had already secured a two-
billion-baht standby credit from six foreign banks at 7%
fixed interest.  He declined to specify the bank creditor's
names and also denied reports about the firm joining
Advanced Info Service's five-billion-baht bond issue.
He said AIS has no plan to raise the funds this year as the
company has current cash reserves of up to six billion
baht.  (Bangkok Post  31-Aug-1999)

THAI FARMERS BANK: No longer can support subsidiary
Thai Farmers Bank conceded defeat yesterday, saying it was
no longer able to support finance subsidiary Phatra

Regulators said they were exploring several options and
expected a decision this week.  Some customers withdrew
funds yesterday, although Phatra staff stressed all funds
were guaranteed by the government.  M.R. Chatumongol
Sonakul, central bank governor, said that Thai Farmers
could not let taxpayers take responsibility for its bad

In a statement to the Stock Exchange of Thailand, TFB
directors said they agreed unanimously on Sunday that the
bank was no longer in a position to support Phatra Thanakit
financially. By law they could not take any action that
would damage their bank.  The bank, which plans to raise
capital next month, said additional support for Phatra
Thanakit could have a negative effect on investor
confidence, possibly leading to an unsuccessful capital

Banthoon Lamsam, TFB president, said he was unable to
justify further support to Phatra with his shareholders.
He acknowledged that the bank's takeover of Phatra last
year "was the wrong decision". The bank had already spent
seven billion baht to prop up the finance house.  While the
finance firm's capital funds remained positive, meeting the
central bank's provisioning requirement at the end of the
year would push the funds into the red.

All financial institutions are required to set aside loan-
loss provisions of 60% by year-end, rising to full coverage
by the end of 2000.  Problem loans at Phatra Thanakit,
formerly one of the strongest finance houses, have rocketed
to nearly 80% of its total lending.

Thai Farmers' announcement places regulators in a quandary,
and raises the spectre that a full taxpayers' bail-out
might be required of the finance company.  TFB shares
yesterday closed at 42.75 baht, down 2.25, on turnover
worth 165.6 million.  The SET index closed at 446.48
points, down 11.06, on light trade worth five billion baht.

One analyst said that while the decision was positive for
bank shareholders, it pointed out loopholes in existing

"Yes, it's the right move to make as a bank president, but
it comes at the expense of taxpayers and society," he said.
Mr Banthoon said that if required by regulators, he would
open talks with Merrill Lynch to buy back its stake in the
securities firm.

The bank said yesterday that it would discuss with
regulators a "mutually acceptable treatment of the shares
of [Merrill Lynch Phatra and Thai Farmers Assets
Management], subject to compliance with relevant laws".
Mr Banthoon said regulators last year had asked Thai
Farmers to continue its support of the finance company.

In June 1998, the bank announced it would take over Phatra
Thanakit with a tender offer of 4.5 baht to shareholders.
At the time, Mr Banthoon said the 2.7-billion-baht takeover
was necessary to prevent further deterioration of asset
quality and damage to stakeholders.

The deal was contingent on approval by Phatra shareholders
to sell to the bank a 49% stake in Phatra Securities and a
30.27% stake in Thai Farmers Asset Management.  American
investment bank Merrill Lynch then announced it would take
a 51% stake in Phatra Securities for 2.65 billion baht.
The takeover was roundly criticised by minor shareholders
of Phatra Thanakit last year, who argued that the bank was
stripping the firm of its most promising assets.

The bank announced then that Phatra Thanakit would be
transformed into a "super-finance" company, with bad loans
managed by a newly-formed asset management firm.  Mr
Banthoon yesterday denied that there had been any sale of
assets or that the firm had taken undue advantage of

"I had always thought to sell a stake, but with the
economic downturn, there were no buyers," Mr Banthoon said.
Phatra Thanakit posted net losses of 3.46 billion baht last

Net assets totalled 57.8 billion baht, outstanding loans
50.1 billion and deposits 50.38 billion.  M.R. Chatumongol
said it was uncertain whether Phatra would be ordered

"The company's management said that Phatra cannot continue
operations, but that doesn't mean that others cannot run
the company," he said.

M.R. Chatumongol said the fact that Phatra's capital fund
remained positive raised legal complications in how
regulators could deal with the firm.  State capital
assistance requires applicants first to make full
provisions against loan losses.

However, with Thai Farmers ruling out further financial
support for Phatra, regulatory intervention and sale to a
new investor is more likely.  Other options were to
transform Phatra Thanakit into a full asset management
company or merge the company with another institution.
M.R. Chatumongol said that, in any case, the problems of
Phatra were "the last" for the financial sector.
Finance Minister Tarrin Nimmanhaeminda echoed the comments.
Phatra aside, banks and finance companies were stable, he
said.  (Bangkok Post, Business Day  31-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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