/raid1/www/Hosts/bankrupt/TCRAP_Public/990910.MBX   T R O U B L E D   C O M P A N Y   R E P O R T E R

                      A S I A   P A C I F I C

     Friday, September 10, 1999, Vol. 2, No. 176

                            Headlines


* C H I N A  &  H O N G  K O N G *

CENTURY CITY HOLDINGS: To sell U.S. holdings for cash
CHI CHEUNG INVESTMENT: Loses investment savior NPH INT'L
HOLDINGS: Auditors issue report with disclaimer
SHANGHAI COKING: Agrees to debt-equity swap with Cinda


* I N D O N E S I A *

GARUDA INDONESIA: Foreign creditors ask for guarantee
PT BAKRIE FINANCE: Offers creditors several alternatives
PT MULIA INDUSTRINDO: Creditors okay debt restructure


* J A P A N *

KANEMATSU CORP.: 3 banks grant 80 Billion yen debt waiver


* K O R E A *

CHOSUN INSURANCE: Sale delay grows losses
DAEWOO GROUP: Creditors to channel funds to 7 more units
DAEWOO GROUP: Creditors to meet on financial assistance
DAEWOO GROUP: Gov't to give more aid to parts suppliers
DAEWOO SECURITIES: Banks file for formal takeover
DONGAH INSURANCE: Sale delay grows losses
DOOWON INSURANCE: Sale delay grows losses
HANDUK INSURANCE: Sale delay grows losses
KOOKMIN INSURANCE: Sale delay grows losses
PACIFIC INSURANCE: Sale delay grows losses
SAMSUNG GROUP: Probe of inter-subsidiary funding extended


* M A L A Y S I A *

NATIONAL STEEL CORP.: Seeking Malaysian bank funds
UNITED ENGINEERS MALAYSIA: Asset swap to boost business

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

MONDRAGON INT'L PHILIPPINES: Eyeing savior


* T H A I L A N D *

KASET THAI SUGAR CO.: Creditors facing heat from planters
KASET THAI SUGAR CO.: Vote on debt plan postponed      
KRUNG THAI BANK: NPLs dropping - only B10billion needed
RUAM PHOL KASET CO.: Creditors facing heat from planters
THAI-GERMAN PRODUCTS: CBC orders its rehabilitation
THAI IDENTITY SUGAR: Creditors facing heat from planters
THAI OIL: Debt plan nearly done


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

CENTURY CITY HOLDINGS: To sell U.S. holdings for cash
-----------------------------------------------------
Cash-strapped Century City Holdings will raise at least
US$200 million (HK$1.56 billion) if a deal announced
yesterday goes through to dispose of most of its North
American hotel assets to Millennium & Copthorne (M&C).

The US assets are directly held by Regal Hotels
International, a subsidiary of Century City Holdings.
M&C is a 52.54 per cent-owned subsidiary of locally-listed
CDL Hotels International, which Hong Kong Standard
identified last week as the potential buyer of Century's US
assets.

The deal involves a portfolio of 27 North American hotels
with a total valuation of US$725 million ($5.66 billion)
and M&C plans to fund the acquisition through a mix of debt
and equity options.  The disposal will reduce the financial
burden for Lo Yuk-sui's Century City group. But the buying
price for the US hotel properties represents a substantial
discount over their valuation.

The deal involves two separate transactions. Eleven of the
hotels up for sale are listed as sale assets, and M&C will
acquire a 100 per cent interest in an entity which owns the
properties plus 100 per cent interest in the hotel
management company owned by Regal in US. M&C will pay
US$280 million to complete this transaction.

Another 16 hotels are listed as joint venture assets, and
M&C will take a 50 per cent equity in these ventures. The
final price will be determined based on a total value of
US$445 million for a 100 per cent equity in the ventures.
In a joint statement, company secretary of Century City
International Holdings, Paliburg Holdings and Regal Hotels
International Holdings, Eliza Lam said the directors of
Regal have been implementing plans with the objective of
reducing Regal's overall gearing level and improving its
financial position, profitability and operations.

"The implementation of the transactions will serve to
significantly reduce the borrowings of Regal by the
elimination of the aggregate amount of external borrowings
of approximately (HK$3.43 billion) attached to the sale
assets and the joint venture assets, while generating
substantial cash inflow to strengthen its overall financial
position, she said.

Subject to the results of the due diligence exercise
satisfying M&C, the agreement will be executed on or before
30 September and the transactions will be done in cash.
Ms Lam said dependent upon the final agreed structure for
implementing the transactions, part of the consideration
will be applied to repay existing external borrowings.
The value of the net tangible assets represented by the
sale assets and the joint venture assets for the year ended
31 December 1998, were approximately HK$1.92 billion. Total
external borrowings attached to the sale assets and the
joint venture assets were equivalent to HK$3.43 billion.
The Century City Group of companies owes about HK$7 billion
to banks.

Last month, chief executive of M&C, John Wilson was quoted
as saying the group had a strong balance sheet and could
spend 300 million (HK$3.7 billion) on hotel acquisition
without resorting to the market, and is targeting cities in
the US and Asia.

Regal Hotels, Paliburg Holdings, Century City and CDL
Hotels suspended trading of their shares in Hong Kong
pending the announcement yesterday.  (Hong Kong Standard  
08-Sep-1999)

CHI CHEUNG INVESTMENT: Loses investment savior             
-----------------------------------------------                  
Chinese Estates Holdings has terminated its plan to invest
in troubled Chi Cheung Investment as the preconditions for
the deal have not been met by the August 30 deadline.

Chinese Estates aborted the deal as it did not obtain
written agreement from a majority of Chi Cheung's creditors
confirming they would vote in favour of a restructuring
proposal. Chinese Estates launched a takeover bid for Chi
Cheung in June. Chinese Estates planned to inject its 70
per cent-owned residential site in Conduit Road, Mid-Levels
into Chi Cheung, in exchange for a majority stake in the
company.  (South China Morning Post  09-Sep-1999)

NPH INT'L HOLDINGS: Auditors issue report with disclaimer
---------------------------------------------------------
Loss-sustaining Chinese-medicine company NPH International
Holdings is among the latest in a growing number of Hong
Kong listed companies with a qualified report from its
auditors.

Ernst & Young issued a disclaimer on NPH's financial
statements for the year to March 31 because of possible
limitations of available evidence in relation to a stock-
option transaction and two loans receivable worth a
combined $99.36 million, provided for in the current year,
and proprietorship of a mainland property.  It also cited
incomplete trading records for petrochemical operations and
fundamental uncertainty over whether the company would
continue operations.

Ernst & Young was appointed in July as the company's
auditors after Arthur Andersen resigned from the job.
Market observers said the company's financial state of
affairs would deter potential buyers interested in seeking
a backdoor listing for the development of the Chinese-
medicine "port".  (South China Morning Post  09-Sep-1999)

SHANGHAI COKING: Agrees to debt-equity swap with Cinda
------------------------------------------------------
Shanghai Coking, which supplies 50 per cent of the city's
gas, said it agreed to a debt-equity swap with China Cinda
Asset Management, the mainland's first asset management
company.

The agreement is the second in less than a week for Cinda,
which is charged with clearing bad loans in the portfolio
of China Construction Bank.  Cinda will assume the entire
debt of 1.05 billion yuan (HK$980 million) owed to the bank
by Shanghai Coking, in exchange for an undisclosed equity
stake in the gas company.

"We hope we can return to profit next year (as a result of
the swap)," said Zuo Yajun, an official at Shanghai Huayi
Group, which controls Shanghai Coking. The swap will save
Shanghai Coking 100 million yuan in annual interest
payments.

Shanghai Coking has a total bank debt of 1.7 billion yuan,
of which 350 million yuan is owed to the Industrial and
Commercial Bank of China.  Mr Zuo said that if the company
executed a second swap with ICBC, its debt-equity ratio
would fall to 27 per cent. He declined to give the
company's debt-equity ratio at present or following the
swap with Cinda.

Beijing's decision to introduce debt-equity swaps for
ailing state companies is a "last-ditch effort" to reverse
firms' worsening losses by the end of 2000, according to
some officials at the State Economic and Trade Commission.
Last Friday, Beijing Cement entered a debt-equity swap with
Cinda, in which the asset management company would take
over an unspecified amount of debt in return for an equity
stake.

Shanghai Coking planned to cut losses this year as the
debt-for-equity swap would reduce its interest payments by
100 million yuan annually, the Liberation Daily reported on
yesterday.  Shanghai Coking aimed to fully reverse its
losses by 2001, the newspaper said, but gave no figures.
Cinda, set up in April, is modelled on the US Resolution
Trust. It plans to take over more than 200 billion yuan of
the Construction Bank's bad debts.

Beijing has approved similar asset management companies for
three other state-owned commercial banks, the Agricultural
Bank of China, the Industrial and Commercial Bank of China
and the Bank of China.  Beijing aims to use debt-for-equity
swaps to slash the debts of more than 500 key state-owned
enterprises, official media have said.

Cinda AMC was set up with registered capital of 10 billion
yuan provided by the finance ministry, and the ministry has
said the other three will receive about the same amount.
Western analysts estimate non-performing loans account for
between 25 and 40 per cent of commercial banks' total loan
portfolios, but central bank governor Dai Xianglong
recently put the figure at under 10 per cent.  (Hong Kong
Standard  08-Sep-1999)


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

GARUDA INDONESIA: Foreign creditors ask for guarantee
-----------------------------------------------------
Foreign creditors have asked for a guarantee from the
government as a condition for the rescheduling of a $ 600
million debt of the state-owned airline company Garuda
Indonesia.

The condition was demanded by a consortium of foreign
creditors for a rollover of eight years asked by the
national's flag carrier early this month, company source
told Neraca.  Apparently the creditors were still worried
that the repayment would not be smooth without a guarantee
from the government considering the gloomy prospects
facing Garuda.

Meanwhile, Garuda would not find it easy to secure the
guarantee from the government which has given the company
management a free hand in running its own affairs, the
source said.  Communication Minister Giri Suseno has said
the government could not fully back Garuda as the
government itself was beset by financial difficulty.

In addition the government was concerned not only with the
fate of Garuda but the survival of the airline industry as
a whole, Giri said.  The government has set aside $ 345
million to prop up the sagging industry.  Some US$ 180
million of the loan will be split among airline firms
running scheduled flights including Garuda, $4 million for
companies operating chartered flights and the rest for
aircraft procurement.  (Asia Pulse  06-Sep-1999)

PT BAKRIE FINANCE: Offers creditors several alternatives
--------------------------------------------------------  
PT Bakrie Finance Corp. (JSX:MTFN) said it has offered many
alternatives to each of its creditors to settle its debts.

In a letter to the Jakarta Stock Exchange, the leasing
company said in seeking to restructure its debts it offered
discount for cash payment, rollover and debt-to-
equity/asset swap.  The company said it is holding talks
with many foreign creditors on the possibility of debt-to-
equity swap settlements.

Among the creditors is Commonwealth Development Corp (CDC),
which had given its agreement to debt-to-equity swap
settlement.  The management said it would be glad to have
CDC as a shareholder in the Bakrie Finance Corp. The
involvement of CDC would strengthen and improve confidence
in the company, it added.

The conversion of debt into shares would greatly contribute
to the improvement of the company performance, it said,
adding that its debt to the main creditors totalled US$ 40
million.  (Asia Pulse  06-Sep-1999)

PT MULIA INDUSTRINDO: Creditors okay debt restructure
-----------------------------------------------------
Publicly listed PT Mulia Industrindo (JSX:MLIA) announced
it had the green light from the majority of its creditors
to restructure the company's $ US550 million debt.

"The overwhelming majority of creditors have indicated
their support for the debt restructuring," company
president Eka Tjandranegara said, reporting the results of
the creditors' meeting held on Sept. 1 and Sept. 2 in
Singapore.

He said that the distributor of building materials would
get the formal creditors' approval over the terms and
conditions of the debt restructuring proposal this month,
and the signing of the deal would follow soon after. The
company has debts to among others Bank of America, ABN AMRO
Bank, Credit Lyonnais and Sakura Bank.  The company is 54
percent owed by PT Eka Gunatama Mandiri, 26% by PT
Grahapermai and 20% by investing public.  (Asia Pulse  07-
Sep-1999)


=========
J A P A N
=========

KANEMATSU CORP.: 3 banks grant 80 Billion yen debt waiver
---------------------------------------------------------
Kanematsu Corp. (TSE:8020), a trading company undergoing
restructuring, will be forgiven a total of 80 billion yen
in debt from its main bank, Bank of Tokyo-Mitsubishi
(TSE:8315), as well as from Dai-Ichi Kangyo Bank
(TSE:8311) and Norinchukin Bank, it was learned Monday.

Kanematsu will book the 80 billion yen as extraordinary
gains in its fiscal first half book-closing, writing off
the same amount in extraordinary losses stemming from
restructuring moves. Bank of Tokyo-Mitsubishi is expected
to relinquish roughly 62 billion yen, DKB will forgive
about 11 billion yen, and Norinchukin will waive 7 billion
yen.  (Asia Pulse  07-Sep-1999)


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

CHOSUN INSURANCE: Sale delay grows losses
DONGAH INSURANCE: Sale delay grows losses
DOOWON INSURANCE: Sale delay grows losses
HANDUK INSURANCE: Sale delay grows losses
KOOKMIN INSURANCE: Sale delay grows losses
PACIFIC INSURANCE: Sale delay grows losses
------------------------------------------
A delay in government negotiations to sell off six ailing
life insurance companies has resulted in increasing their
combined losses by around 1 trillion won, industry sources
said yesterday.  The combined negative capital of the six
insurers - Dongah, Pacific, Kookmin, Handuk, Doowon and
Chosun - jumped to 2.11 trillion won as of the end of June
from 1.13 trillion won six months earlier.

Dongah's capital erosion surged by 425.8 billion won to
816.7 billion won, while Pacific saw its negative capital
climb by 121 billion won.  Doowon's negative capital rose
by 113.8 billion won; Kookmin's by 141 billion won;
Handuk's by 100.4 billion won; Chosun's by 75.9 billion
won.

In a bid to restructure the debt-laden life insurance
industry, the Financial Supervisory Commission had put the
six life insurers up for sale and planned to sell them off
by the end of June this year.  However, the financial
watchdog has succeeded in finding a potential buyer for
only Kookmin, while negotiations to sell the remaining
insurers are still under way.

Industry sources said the government should lose no time in
selecting buyers in order to cut the insurers' ballooning
losses.  Delays in their sell-offs will add to their
negative capital and thus increase the amount of public
funds needed to keep them afloat, they said. (Korea Herald  
10-Sep-1999)

DAEWOO GROUP: Creditors to channel funds to 7 more units
--------------------------------------------------------
Creditors of South Korea's faltering Daewoo Group yesterday
agreed to channel more funds into seven of the
conglomerate's sickest units as bank officials took over
management of three of the firms.

Officials declined to reveal how much additional assistance
would be pumped into the seven, but Yonhap news agency said
creditor institutions had agreed to extend another 1
trillion won (US$830 million).

"We have just agreed with Daewoo officials on it," said an
official from Korea First Bank (KFB), one of Daewoo's major
creditors, after the deal which unblocked desperately
needed cash-supply to the units.

The units were among 12 that were last month placed under
an emergency debt rescue scheme to avert their collapse as
their debt-ridden parent Daewoo Group is dismantled to
avoid what would be a spectacular bankruptcy.  The extra
aid will be extended within the loan ceiling allocated to
each unit by discounting commercial papers and trade bills,
as well as by re-opening overdraft facilities, KFB said.
The seven units are Daewoo, Daewoo Motor, Daewoo
Electronics, Daewoo Heavy Industries, Daewoo Telecom,
Diners Club Korea and Daewoo Capital, the official said.

The latest injection of funds came after a third round of
consultation talks between creditors and financial
officials assisting the units which are suffering a major
liquidity squeeze as their parent collapses. Creditors had
last month injected $700 million in export credits to the
12 most troubled units of South Korea's second biggest
business group when they were put under the debt "workout"
scheme.

The 12 are to be separated from Daewoo after their
rehabilitation and sold off as the debt-crippled Daewoo
Group pushes ahead with plans to dismantle itself in return
for $3.3 billion of lifeline loans.  But some creditor
institutions at the weekend blocked plans to offer the
units further aid, with investment trust companies
demanding the government ensure interest payments on their
loans.

The refusal apparently prompted the authorities to Monday
give the go-ahead to banks to send managers into 10 of the
12 firms to take control of them and ensure the free flow
of funds to the liquidity-starved units.  Creditor banks
have so far only sent managers into three of the units -
Daewoo Heavy Industries, Daewoo Electronics and Daewoo
Telecom. However, they stressed that the move should not be
seen as a form of "bank receivership."

The Financial Supervisory Commission (FSC) gave the go-
ahead for banks to take over management control of key
firms as they are rehabilitated.  The move was aimed at
ensuring a freer flow of cash to the units - which were
already under an emergency debt rehabilitation scheme - to
prevent a liquidity crunch spreading into other areas of
the fragile economy.

Under the step, creditor banks will be exempted from
domestic financial regulations governing their credit
ceilings and are allowed to make as much cash as they deem
necessary available to Daewoo units.  The move also means
creditor banks, rather than Daewoo - which is saddled with
more than $50 billion of debt - will have the final say
over the financial terms of any business transactions of
the companies.

Daewoo ran up multi-billion-dollar debts through years of
reckless expansion on borrowed money which finally caught
up with it when South Korea was hit by Asia's financial
crisis in late 1997.  (Business Day  08-Sep-1999)

DAEWOO GROUP: Creditors to meet on financial assistance
-------------------------------------------------------
Korea First Bank said yesterday that it will convene a
meeting of creditors of Daewoo Corp. and two other Daewoo
units today to discuss the extension of financial
assistance to them.

The creditors' meeting was supposed to be held yesterday
but has been postponed due to a lack of preparation, a KFB
official said.  At the meeting, creditors of Daewoo Corp.,
Daewoo Telecom and Diners Club will decide upon the amount
of fresh loans to be channeled to the cash-strapped Daewoo
units.

Also on the agenda is the dispatch of officials
representing creditors, who will oversee operations at the
three Daewoo subsidiaries, he said.  Seoul Bank also said
that it has postponed a meeting of creditors of Daewoo
Motor, Daewoo Motor Sales and Daewoo Capital, scheduled for
today, until next week.

"Creditors decided to put off the meeting because of a
delay in deciding the amount of new loans to be provided to
the Daewoo affiliates," a Seoul Bank official said.

Creditors will be able to get together to discuss the
extension of financial assistance around the middle of next
week at the earliest, he added.  Main creditor banks and
other creditor institutions are now in talks with each of
the 12 Daewoo units, now under a debt-workout program, to
decide the amount of financial assistance to them.

Earlier Tuesday, creditors of the Daewoo Group agreed to
give new loans to the ailing conglomerate's affiliates to
keep them afloat.  Late last month, the creditors decided
to put the 12 Daewoo units under the workout program to
avert their imminent default, giving them a three-month
grace period for debt servicing.

The creditors had earlier agreed on a sweeping restructur-
ing plan for Daewoo that will reduce the conglomerate into
six affiliates primarily focused on auto-related
businesses. Daewoo's debt totals about 61.8 trillion won.
(Korea Herald  10-Sep-1999)

DAEWOO GROUP: Gov't to give more aid to parts suppliers
-------------------------------------------------------
The Seoul government decided yesterday to provide more
financial aid to parts suppliers of Daewoo Group
affiliates.

According to the Finance and Economy Ministry, the
government will allow the Korea Credit Guarantee Fund
(KCGF) to insure for each parts supplier up to one billion
won ($837,520) worth of commercial bills (CBs) issued by
Daewoo affiliates, raising the current insurance limit of
500 million won per firm.

This and other measures were taken in the second government
meeting on assisting Daewoo's subcontractors, chaired by
Vice Finance and Economy Minister Lee Kun-kyong.
Lee said the KCGF will increase the insurance amount
further if necessary.  The KCGF insured 20.5 billion won
worth of Daewoo's commercial bills as of last Tuesday, he
added.

In addition the government will ask Daewoo's creditor banks
to allow the conglomerate to issue commercial bills with
shorter maturities in order to ease the liquidity crunch at
the subcontractors.   The Small and Medium Business
Administration (SMBA) will raise its lending limit from 5
trillion won per firm to 8 trillion won to provide more
money to the subcontractors.

The government also decided against strictly holding
financial institutions responsible for possible defaults of
Daewoo's CBs to encourage them to purchase more of the
bills.   According to Lee, a total of 731.2 billion won of
Daewoo's commercial bills have been cleared since the first
meeting Aug. 26.  (Korea Herald  10-Sep-1999)

DAEWOO SECURITIES: Banks file for formal takeover
-------------------------------------------------
Daewoo Securities, the country's largest brokerage house,
filed an application Thursday at the Korea Fair Trade
Commission (FTC) for a spin-off from the parent Daewoo
group, which is currently in the process of undergoing a
creditor-supervised debt workout.

A spokesperson at the securities firm said that six
creditor banks, including Korea First Bank, signed an
agreement to take over Daewoo Securities through the
takeover of a 32.6% stake before the end of September. The
creditor banks expect to sell the securities house before
the end of this year, with proceeds to go towards repaying
the debts of the cash-strapped Daewoo group.  (Digital
ChosunIlbo  09-Sep-1999)

SAMSUNG GROUP: Probe of inter-subsidiary funding extended
----------------------------------------------------------
A high-ranking official at the Financial Supervisory
Service (FSS) said Thursday that an on-going investigation
into Samsung subsidiaries in the financial industry will be
extended until September 11.

The FSS official said the special investigation into inter-
subsidiary funding was originally expected to end September
4, but a decision had been made to continue the probe due
to a lack of cooperation from Samsung staff. The same
official continued, saying that Samsung Life has been
reluctant to surrender documents necessary to the
investigation and that company employees have been
intentionally slow in responding to questions and requests
for information.  (Digital ChosunIlbo  09-Sep-1999)


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

NATIONAL STEEL CORP.: Seeking Malaysian bank funds
--------------------------------------------------
A cash-strapped Malaysian steel company is wooing Kuala
Lumpur banks for much-needed funds to stave off its looming
foreclosure by its Manila creditors, sources said.
Approached by the National Steel Corp (NSC) is a consortium
of Malaysian banks through Tuferco Bhd to work out before
Sept 16 a viable financial bailout package for the
Philippines' largest steel mill.

NSC is majority owned by Hong Kong based Hottick
Investments Ltd, reportedly the private investment vehicle
of Renong Group chief Tan Sri Halim Saad.  Lately, however,
NSC officials admitted that Hottick had relinquished its
controlling 82.5% stake in NSC to Danaharta Nasional Bhd,
the asset management company.

"It turned out that Hottick's holdings in NSC were pledged
to borrow money. Danaharta is a company which buys bad
loans,"a banker said.

The NSC move came after the Manila creditor banks gave it
till Sept 16 to pay its 13-billion-peso debt--on which it
has defaulted for over a year--or risk immediate
foreclosure of its assets.  The creditors, mostly state-
owned banks led by the Development Bank of the Philippines,
fixed the payment deadline at their Aug 31 meeting with NSC
officials.

Based on the creditor banks' latest appraisal, NSC has over
20 billion pesos (RM2bil) worth of assets, more than enough
to cover the debts.  In 1998, NSC incurred losses of four
billion pesos, in contrast with a modest 54.3 million pesos
profit in 1997, due to higher financing charges sparked by
Asia's currency turmoil.  (Star Online  09-Sep-1999)

UNITED ENGINEERS MALAYSIA: Asset swap to boost business    
-------------------------------------------------------     
United Engineers Malaysia (UEM), the country's biggest
construction company, will swap a closely held toll highway
company for a controlling stake in Kedah Cement Holdings.
After the swap, UEM plans to use Kedah Cement to build a
RM13 billion (S$5.8 billion) pipeline to transport treated
water from Pahang to Singapore, said company officials.

"If they can pull it off, then it'll go some way towards
resolving some of their financial problems and help them
take on more infrastructure projects," said Mr Nicholas
Tan, who tracks UEM shares at Merrill Lynch & Co (KL).

The proposal is part of UEM's overall plan to divest assets
and sell bonds to help settle its RM8.6 billion debt. UEM
and its parent Renong owe more than RM20 billion in debt to
banks.  In a statement to the Kuala Lumpur Stock Exchange
on Tuesday night, UEM said its proposal "will enable it to
list its new assets and realise an exceptional gain. UEM is
also expected to generate positive cashflow from the
proposal."

The plan involves Kedah Cement selling its assets and
cement businesses to its parent, Malayan Cement.  UEM will
then swap its toll road unit Expressway Lingkaran Tengah
for a controlling stake in Kedah Cement. The swap values
the stake at RM711.9 million, or at RM2.58 a share.  
(Bloomberg News, Straits Times  09-Sep-1999)  


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

MONDRAGON INT'L PHILIPPINES: Eyeing savior
------------------------------------------
Mondragon International Philippines, Inc. (MIPI) might just
find a savior in the person of Chinese-Filipino businessman
William Gatchalian who is said to be interested in
acquiring the Mimosa Leisure Estate in Clarkfield,
Pampanga.

BusinessWorld sources from the two companies confirmed MIPI
president Jose Antonio Gonzalez is indeed courting Mr.
Gatchalian to invest in the beleaguered MIPI which, in
turn, will enable it to settle its outstanding obligations
with Clark Development Corp., the Bureau of Internal
Revenue, the Philippine Amusement and Gaming Corp. (PAGCOR)
as well as its creditor banks.   The sources said actual
negotiations will begin next week.

"It is still too early to tell. They have yet to sit down,
but what I would say is that it is along the thrust of the
group to invest in hotel and casino operations," an
official of Mr. Gatchalian's Wellex Group of Companies,
told BusinessWorld on condition of anonymity.

In a disclosure, MIPI comptroller Pierre Raul Buhay said
the company is "exploring various alternatives to raise
funds in order to meet our obligations."   MIPI officials
could not be reached for comment on the Gonzalez-Gatchalian
negotiations.  Yesterday, MIPI benefitted from talks of a
possible investor -- closed 9% up at 1.94 Philippine pesos
(US$0.048 at PhP40.062=US$1) a share, from PhP1.78 ($0.044)
last Tuesday. Last week, MIPI was below the PhP1 ($0.025)
mark.

Mr. Gatchalian, a close friend of President Estrada, has
been shopping for hotels and casinos after seeing leisure
and tourism as a lucrative business.   His Wellex Group has
an 85% stake in Waterfront Philippines, Inc. (WPI) which
operates a hotel and casino in Cebu.  It also bought Ayala-
owned Davao Insular Hotel for PhP500 million ($12.48
million), and Fort Ilocandia in Ilocos Norte for an
undisclosed amount.

WPI president Sherwin Gatchalian earlier said the firm
received offers from two foreign groups for possible
investments in the company's casino business. The firm
expects to earn as much as PhP200 million ($4.99 million)
this year, 70% of which would come from the casino.  Mr.
Gatchalian has allocated about PhP2 billion ($49.92
million) to PhP3 billion ($74.9 million) for additional
acquisitions, eyeing to have 10 hotels nationwide this
year.

The Gatchalians are also into mining and real estate firm
Omico Corp. through four in the company's 11-man board,
representing a 50% stake in the company.  The investment
would allow the Wellex Group to develop some of Omico's
properties in Davao and Boracay.  (Business World  09-Sep-
1999)


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KASET THAI SUGAR CO.: Creditors facing heat from planters
RUAM PHOL KASET CO.: Creditors facing heat from planters
THAI IDENTITY SUGAR: Creditors facing heat from planters
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Creditors of Kaset Thai Sugar Co, part of the Thai Identity
Sugar group which is restructuring a combined debt of Bt14
billion, yesterday faced strong pressure from about 2,200
sugarcane planters.

The planters staged a rally to demand that the firm's
current management be retained and that its capital does
not have to be written down as sought under a court-
supervised business restructuring plan.  The farmers owe a
total of Bt1 billion to Kaset Thai Sugar, whose
restructuring plan was filed under old bankruptcy and
business reorganisation laws that require a minimum 50 per
cent of creditors to approve the plan.

Yesterday's move by the planters prompted the major
creditors to postpone the plan for Kaset Thai Sugar.
Visit Visitsora-art, director of the office of business
rehabilitation at the Justice Ministry, said Thai Farmers
Bank, Bank of Asia, and Exim Bank, which together hold more
than 10 per cent of the total debt, sought the postponement
because management change and capital write-down are
essential features of the scheme proposed for approval.
The plan will be reconsidered on Sept 22.

Meanwhile, today's meeting on Ruam Phol Kaset Co, another
unit of the Thai Identity Sugar group, is also expected to
be rescheduled. Planters indicated they would stage a rally
there if the meeting goes ahead.  Earlier, the
restructuring plan for the parent Thai Identity Sugar
business rejected, which means it will be considered for
bankruptcy by the court next week.

All three firms of the group have a combined milling
capacity of seven million tonnes per year, representing 11-
12 per cent of the country's total sugar production.
In March, Australian financial adviser Michael Wansley was
gunned down at a group factory and a younger brother of
Praphan Siriviriyakul, managing director of the group, has
been named among those accused of involvement in the
murder.

Praphan said the rally by the 2,200 planters was a protest
against the unfairness in the restructuring plan because 33
other sugar mills in Thailand did not have to face enforced
changes of management change and to write down their
capital.  He claimed the group still has assets worth Bt9.2
billion in addition to its equity, in contrast to the
restructuring planner who concluded that it has a negative
net worth of Bt3.85 billion.

The 33 other sugar mills have restructured their debts by
payment rescheduling settled out of court.  Sombat
Kiartchusak, a representative of the planters, said the
group want four major changes in the restructuring plan
before voting on it.  Besides scrapping the capital write-
down and management changes, they want a commitment not to
file lawsuits against planters who owe a combined Bt3.75
billion to the group by allowing compromises with no
interest levy and pay-back spread out over a period of 10
years.

In addition, the firm should pay planters an outstanding
Bt110 million for sugarcane milled the previous season.
An official of Southern Planner Co, acting for the group's
creditors, said it is up to the majority of creditors
whether the plan is amended since the plan is designed to
maximise creditor interests with the key objective of
punishing former shareholders who caused damage to the
group. The management would be changed to prevent a
liquidity crisis.

A new company will also be set up to buy sugar, instead of
selling it to GT Pattana of the old shareholder group,
according to the Southern Planner official.  He said it is
unlikely that a delayed restructuring plan for Thai
Identity Group will affect the rest of sugar industry,
since other groups have already restructured.  As for the
upcoming milling season in December, Praphan of Thai
Identity said there should be no problem because the group
has already negotiated with unnamed financial institutions
for funding in case creditors in the Bt14 billion
restructuring plan did not approve new loans.

The group will need an estimated Bt2.7 billion in December
when milling is to start. Praphan said the group currently
has a working capital of Bt600 million.  He claimed the
court is unlikely to let Thai Identity go bankrupt because
it still has assets to remain a going concern and it will
be a matter for the creditors to file civil suits to claim
compensation for damages.  (The Nation  09-Sep-1999)

KASET THAI SUGAR CO.: Vote on debt plan postponed          
-------------------------------------------------           
Facing a second defeat, the creditor banks of Kaset Thai
Sugar Co yesterday secured a two-week postponement of the
vote on the company's debt restructuring plan.

The banks hope to use the time to strike a compromise with
more than 2,000 sugarcane planters who have been opposing
the plan. The banks will seek a similar postponement for
today's meeting of creditors of Nakhon Sawan Industrial Co.

About 2,200 sugarcane planters from Nakhon Sawan and nearby
provinces descended on the offices of the Legal Execution
Department in Bangkok's Taling Chan district to press for a
rejection of the debt restructuring plan.  The three mills
have some 20 billion baht in debts. Planters and other
small trade creditors say the proposal for restructuring
the debts is stacked in favour of the major financial
creditors.

The planters' representatives succeeded on Tuesday in
turning down a plan to restructure 6.4 billion baht in
loans to Thai Ekalak Sugar Co.  The protesting farmers
arrived at the department yesterday morning but the meeting
did not start until late afternoon, as organisers needed to
check whether the planters were legitimate creditors of
Kaset Thai.

The ninth-floor meeting room could accommodate only 300
people, so several closed-circuit television monitors were
set up on the grounds outside where most of the farmers
were forced to gather. Executives of Thai Farmers Bank, the
Export Import Bank and Bank of Asia, representing all the
financial creditors, immediately requested a two-week
postponement. They were strongly opposed by the planters,
who cited the time and expense they had incurred in
travelling to Bangkok.  But the postponement was approved
by Visit Visitsora-art, the meeting chairman and director
of the department's debtors' business rehabilitation
office.

The bank executives also noted that some changes had been
made by the rehabilitation plan's authors, South Sathorn
Planner Co. As a result, they said, they needed to discuss
the new terms with their respective managements.  Mr Visit
said afterward that he was not showing favouritism to the
banks. A vote yesterday would have been in no one's
interest, he said, expressing the hope that the opposing
factions could negotiate and compromise.

Bank executives said they were willing to talk with both
small creditors and the mills' managers on a way to break
the impasse. Kaset Thai Sugar Co owes its creditors more
than 9.4 billion baht. South Sathorn Planner had proposed
writing down the value of the shares in the mill to one
satang each and replacing its management. The same proposal
was made for the other two mills. The small creditors have
argued that wiping out the mills' capital would make it
impossible for them to collect the money they are owed. The
only winners would be the big creditors who would take over
the businesses.

Kaset Thai, Thai Ekalak and Nakhon Sawan Industrial are all
part of the same business group, managed by a team headed
by Praphan Siriviriyakul. In March, Australian auditor
Michael Wansley was shot dead in Nakhon Sawan. Police
believe he was murdered because he had discovered
irregularities on Kaset Thai's books. Three executives of
Kaset Thai were later arrested on charges of masterminding
the murder.

Last week, two small creditors of the three mills filed
civil and criminal suits against the creditor banks and
South Sathorn Planner, accusing them of falsifying
information on the three mills' assets to justify the share
write-down.  They claimed that the three mills' combined
assets were nine billion baht higher than their
liabilities, so the shares should not be written down.  
(Bangkok Post  09-Sep-1999)

KRUNG THAI BANK: NPLs dropping - only B10billion needed
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Krung Thai Bank's non-performing loans were as high as 72
per cent of total loans in June and the bank needs 10
billion baht more to raise loan loss provision to meet
regulatory standards, a senator said.

The figure, given by the bank's own audit division, is much
higher than the 59.3 per cent which Thailand's second-
largest bank earlier reported to the stock exchange, said
Jirayuth Wasurat, chief of the senate's ad-hoc committee in
charge of monitoring the nation's reform programme.
This means the bank lacked "transparency", he said.

The statement came three weeks after a report by accounting
firm PricewaterhouseCoopers FAS Ltd found larger-than-
expected bad loans at Krung Thai, triggering an
investigation by the government. The report said Krung
Thai's non-performing loans accounted for 84 per cent of
total loans.

The government, which owns almost three-quarters of Krung
Thai, fired the bank's chairman Mechai Viravaidya and five
other directors two weeks after the confidential
Pricewaterhouse Coopers report was leaked to a senate
panel.  (Bloomberg, Business Day  08-Sep-1999)

THAI-GERMAN PRODUCTS: CBC orders its rehabilitation
---------------------------------------------------
Thai-German Products Plc reported to the Stock Exchange of
Thailand that on Sept 7, the Central Bankruptcy Court had
issued an order for the company's business rehabilitation
and had also appointed Siam City MB Co Ltd and PLV and
Associates Co Ltd to jointly develop the recovery plan.
The Court order was issued after Thai-German Products and
its major creditor, Siam City Bank, had filed a petition
for business rehabilitation to the Court on Aug 4.
(The Nation  09-Sep-1999)

THAI OIL: Debt plan nearly done
-------------------------------
The Bank of Thailand is expected to endorse Thai Oil Co's
US$2.18 billion debt restructuring plan on Friday after a
four-month delay, officials said yesterday.

The country's largest oil refiner will reduce its debt to
$1 billion and restructure the remaining $1.18 billion.
The Petroleum Authority of Thailand (PTT), which owns 49%
of Thai Oil, will inject $350 million into the company,
turning $350 million in debts owed to Japanese lenders into
equity.  About 40% or $883 million of the Thai Oil debt is
owed to Japanese banks, $409 million (20%) to Thai
creditors, $230 million (11%) to European creditors and $75
million (3%) to US lenders.  

Petroleum Authority of Thailand (PTT) said it was hopeful
that Thai Oil's debt restructuring plan will receive
approval from creditors.  The Authority has offered the
creditors an arrangement involving the conversion of Thai
Oil's debts to PTT's shares.

PTT plans to list Thai Oil in the stock market middle of
year 2000.  A source said that Thai Oil's debt
restructuring plan will be proposed to the Credit Steering
Committee on September 10.  Under the plan, PTT will
provide a clear framework for the merger between PTT's oil
division and Thai Oil, which would help facilitate
creditor's decision on the plan.  The source noted that
this is the best that PTT could provide for Thai Oil's
creditors.

"PTT cannot offer anything more because it must go through
the privatization process in line with the government's
policy," the source indicated.

The source is confident that creditors would back Thai
Oil's restructuring plan because refusal to accept the plan
would caused a further delay in debt payments while the
matter goeso through the legal process.

"The creditors will have 25 days to decide whether to
accept or reject the plan."

Other main elements of the plan include PTT's decision to
raise $350 million capital for Thai Oil, thereby holding 49
percent stake, the conversion of debt to equity on the part
of creditors worth $350 million, and extension of debt
payment from 5 years to 10 to 12 years with reduced
interest remained unchanged.

The source also mentioned that under the plan the principal
portion would be converted to equity, while the interest
portion would be written of to some degree.  Meanwhile,
negotiations on the interest has not reached a conclusion,
the source said.  (Bangkok Post, Business Day  08-Sep-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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