TCRAP_Public/991004.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

              Monday, October 4, 1999, Vol. 2, No. 192


* C H I N A  &  H O N G  K O N G *

CHINA EVERBRIGHT INT'L.: Posts first-half loss
CHINA UNICOM: To freeze payments to foreign partners
E-LIFE INTERNATIONAL: Makes debt-rehab plan with creditors
JINGWEI TEXTILE MACHINERY: Asset swap part of restructuring
SIU-FUNG CERAMICS: Creditors still selling assets off
THEME INT'L HOLDINGS: Gets $110 million purchase offer

* I N D O N E S I A *

BANK BALI: Five scandal suspects arrested

* J A P A N *

MITSUI OSK LINES: Reveals 3-year streamlining plan

* K O R E A *

BOKWANG GROUP: President to be arrested
DAEWOO GROUP: Fined by government
HYUNDAI GROUP: Fined by government
KOREA LIFE: Nationalization moves taken
LG GROUP: Fined by government
SAMSUNG GROUP: Fined by government
SK GROUP: Fined by government

* M A L A Y S I A *

MCL CORP.: Expects restructuring to be done early next year

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

MONDRAGON INT'L PHILIPPINES: Creditors seek foreclosure
VICTORIAS MILLING CO.: To pay interest to creditors

* S I N G A P O R E *

GOLDTRON LTD: Creditors favor rehab plan
HOTEL GRAND CENTRAL: Posts first-half loss
IPC CORP.: Close to debt scheme finalization
LIM KAH NGAM: To give creditors rehab plan soon
L&M GROUP: Debt rehab talks continuing
VAN DER HORST: Quick debt rehab unlikely

* T H A I L A N D *

BANK OF AYUDHYA: Ratanarak businesses adjusting holdings
PACIFIC ASSETS: Office swapped for debt repayment
RATTANAKOSIN INSURANCE: Creditors approve to rehab talks
SAWASDI HORRUNGRUANG: Debt restructuring in full swing
TELECOMASIA CORP.: Signs MOU with 45 creditors on debts

C H I N A  &  H O N G  K O N G

CHINA EVERBRIGHT INT'L.: Posts first-half loss             
China Everbright International (CEBI) posted a $143.06
million attributable loss for the six months to June 30,
against a $26.77 million profit for the same period last

The company attributed the loss to its 35.01 per cent held
Hong Kong Construction (Holdings) (HKCH), which contributed
a $128.63 million loss to the group.  A provision for a
fall in value of its investment in the HKCH associate-run
Hainan Yangpu power station added an exceptional loss of
$98 million.

CEBI also made a loss in its 77.12 per cent held Everbright
Timber Industry (Shenzhen) due to the economic crisis'
impact on the mainland timber industry.  Loss per share was
6.07 cents, compared with a gain of 1.28 cents in the first
half of last year.  Turnover was $292.04 million, down
14.55 per cent from last year's $341.78 million. No interim
dividend was recommended. (South China Morning Post  01-

CHINA UNICOM: To freeze payments to foreign partners       
China United Telecommunications (Unicom) has said it will
freeze all payments to foreign telecommunications partners
from today, raising the stakes in its bid to scrap more
than 40 controversial contracts.

In a letter to foreign partners, Unicom said it "cannot
distribute cash flows generated by the co-operative
projects after October 1".

Foreign executives said yesterday that they believed Unicom
was trying to force a quick settlement of an issue stalling
the company's plans for a multi-billion-dollar overseas
listing. But they said the move would only further
complicate delicate negotiations, and they threatened legal
action.  Foreign companies have poured US$1.4 billion into
building mobile and fixed-line phone networks for Unicom
under a complex financing scheme that regulators have since
declared "irregular".  The firms are entitled to payments
based on revenues from the networks.

"China Unicom has unilaterally decided to stop doing what
it is supposed to be doing under these contracts," said one
foreign source.  "You'd be hard-pressed to find a more
clear-cut breach than that.  The threat of arbitration or
litigation looms larger now certainly than it did a few
days ago," the source said.

Under pressure from the government, Unicom has been trying
for months to unwind its contracts with more than 20
foreign firms, including Siemens, France Telecom and Bell
Canada International.  To skirt a ban on overseas
investment in mainland telecom services, the companies
packaged their contracts in the form of "China-China-
Foreign" (CCF) partnerships.

The CCF model allowed foreign companies to set up joint
ventures with mainland firms, which in turn funnelled money
into Unicom, the mainland's No 2 telephone company.  
Provincial and, in some cases, central government offices
approved the CCFs starting in the mid-1990s.  But last
year, the Ministry of Information Industry declared CCF
ventures "irregular" and has since ordered Unicom to end
the contracts.

Unicom has postponed revenue payments to several of its
partners since the dispute heated up earlier this year, but
the letter formalises such payment freezes, foreign
executives said. The letter said Unicom would pay what it
owed its partners before October 1 and pledged to continue
negotiating final settlements. But deals have been hard to
come by.

Unicom has offered foreign partners their original
investments back plus a few per cent per annum in interest,
the equivalent of returns on a bank loan, foreign
executives said.  While some partners who have yet to see
profits on their investments might accept the offers, many
foreign firms have shot down a deal and demanded Unicom
reimburse them for the market value of the networks they
helped to build.

"People call this a $1.4 billion issue, but in fact it's
quite bit bigger than that," said the foreign source, who
put the actual value of networks at several times that
figure.  "Over 70 per cent of the money that was used to
build up Unicom came from foreign investors."

Unicom is trying to resolve the issue to clear the way for
initial public offerings in Hong Kong and abroad, which
foreign executives believe could be worth as much as $5
billion. (South China Morning Post, Hong Kong Standard  01-

E-LIFE INTERNATIONAL: Makes debt-rehab plan with creditors
Troubled freight-forwarder E-Life International has agreed
to a debt-restructuring plan with its principal banker,
according to chairman Pak Chung.  Informal agreements had
also been reached with other banks and creditors, he said.

E-Life, formerly Jet Air International, faces two winding-
up notices put forward by creditors claiming $5.88 million
and $2.3 million.

"We are confident that these loans will be settled soon, as
the sums involved are not very large," Mr Pak said.

E-Life raised $25.7 million this year through two share
placements.  The group's attributable loss narrowed to
$26.74 million in the year to March 31, from $50.89 million
the previous year.  Turnover for the year fell 24 per cent
to $242.61 million.  Mr Pak attributed the loss to the
impact of the Asian economic turmoil on the freight-
forwarding industry.  The air-freight arm of the group
generated turnover of $135.02 million.  Turnover from the
sea freight business stood at $107.58 million.

"We have made repayments of close to $10 million this year
and this means that our net borrowing has been greatly
reduced, said Executive director Kwok Kwan-hung."  (South
China Morning Post  01-Oct-1999)

JINGWEI TEXTILE MACHINERY: Asset swap part of restructuring
Jingwei Textile Machinery has become the latest H-share
company to carry out an asset swap with a parent in a
restructuring aimed at boosting its bottom line.

Subject to independent shareholder approval, Jingwei
announced it would sell four ailing non-core ancillary
plants to its parent, China Textile Machinery (CTM), the
mainland's largest textile-machinery maker.  The
facilities, worth 130.97 million yuan (about HK$122.2
million), include a casting plant, a special casting plant,
a cold-drawing plant and electro-plating and heat-treatment
plant.  The accompanying liabilities are also part of the

In return, CTM is to inject a 98 per cent stake in each of
four profit-making cotton yarn textile-machinery production
plants to Jingwei as part of the deal.  The four plants are
Zhengzhou Honda New Textile Machinery, Qingdao Honda
Textile Machinery, Shenyang Honda Textile Machinery and
Tainjin Honda Textile Machinery.   The consideration of the
transaction would be settled in cash by the difference in
the valuation of the acquisition and the disposal.  As a
result, Jingwei will pay CTM 194.73 yuan.

The Shanxi-based company said: "The directors expect that
the disposal will enhance the group's profitability through
the effective exchange of its unprofitable operations for
more profitable operations."

In a separate move, Jingwei announced plans to issue an
additional 180 million new A shares at a proposed price of
four to 5.2 yuan.  About 720 million yuan to 936 million
yuan would be raised through a combination of rights issue,
public offer and private placement, the company said.

No application has been made to the authorities, although
Jingwei hopes the cash call will take place before the end
of the year. Net proceeds would be earmarked for the
development of new textile machinery products and
electronics office equipment, as well as boosting research
and development capability.

The A-share issue - representing 29.81 per cent of the
enlarged share capital - will be subject to the approval of
both A shares and H shares.  The planned share issue will
dilute the H share's shareholding from 42.66 per cent to
29.94 cent, and state legal person shares from 51.91 per
cent to 36.44 per cent.

Jingwei said the assets to be disposed of lost a combined
10.21 million yuan in 1997 and 5.76 million yuan last year,
using unaudited mainland accounting standards.  In the
first five months, they lost an unaudited 2.67 million
yuan.  In contrast, the four plants to be injected into
Jingwei earned a combined 23.28 million yuan in 1997 and
13.74 million yuan in 1998, using accounting principles
accepted in Hong Kong.  (South China Morning Post  01-Oct-

SIU-FUNG CERAMICS: Creditors still selling assets off      
Creditor banks of insolvent Siu-Fung Ceramics have
continued to sell the company's assets despite agreeing
"in-principle" to the rescue plan offered by garment tycoon
Charles Yeung Chun-kam.

The company yesterday said its largest creditor HSBC,
received $88 million for the sale of Siu-Fung's Tsim Sha
Tsui property, representing only 23.4 per cent of the $375
million the company originally paid for it in 1994. The
sale resulted in a loss of $280 million due to a huge drop
of the property's value, the company said. Property
analysts said since the property was bought at a bad time,
the huge drop was understandable.

"The price of commercial property in the area has generally
dropped 50 to 60 per cent in the last five years," said
Jacob Wong Yiu-tong senior manager of Hong Kong property
agent Treasure Land.  "In 1994, people were willing to pay
a higher premium for those properties on upper floors, such
as this one, but now they are not."

One of Siu-Fung's 13 creditor banks Dao Heng Bank disposed
of about 31.4 million shares of Siu-Fung last month. The
shares were collateral chairman Siegfried Lee Siu-fung
secured a loan with more than three years ago. Mr Lee
secured the loan with 500 million shares provided to Dao
Heng Bank on April 15, 1996.

On Tuesday, the company said all creditor banks had
formally indicated agreement "in-principle" to Mr Yeung's
rescue proposal. Under the restructuring plan proposed in
July, creditor banks would receive only a $70 million cash
payment and a 3 per cent stake in the company, although the
loans made to the company were worth $2.2 billion.  (South
China Morning Post  01-Oct-1999)

THEME INT'L HOLDINGS: Gets $110 million purchase offer     
Fashion retailer YGM Trading has launched an almost $110
million offer for cash-strapped Theme International
Holdings in an attempt to beat rival bidder Giordano
International, according to sources.

The sources said YGM's offer included the injection of
casual-wear arm Hang Ten into Theme, a rights issue,
repayment of Theme's debts owed to red chip China
Everbright, a partial repayment to Theme's creditor banks
and a convertible loan note. The offer is more generous in
comparison with Giordano's almost $70 million proposal.
However, Giordano executive director Terry Ng Sze-yuen
yesterday ruled out that it would chase after YGM's bid and
warned the company might downgrade its proposal.

"One of the conditions of our proposal is a satisfied due-
diligence exercise on Theme's books. In the wake of
possible hidden risks and liabilities, we won't rule out
raising the haircut or cutting prices," he said.

Giordano proposed to repay 12 per cent of Theme's $242.78
million owed to its creditor banks, an effective 88 per
cent repayment reduction or haircut. This is compared with
YGM Trading's 15 per cent repayment of debts to creditor
banks plus bonus warrants as a sweetener. As part of the
deal, YGM offered to repay a maximum of $10 million in the
debt Theme owes substantial shareholder China Everbright.

Both Giordano and YGM plan to consolidate Theme shares to
pave way for a three-for-two rights issue. Giordano plans
to subscribe Theme rights shares at 25 cents a share,
higher than YGM's planned 10 cents. Giordano's proposal
does not involve any asset injection, but has an ambitious
plan to expand Theme's operations in the region. The plan
includes opening 50 stores within the first year of a
successful takeover, adding 20 management staff in Hong
Kong and granting share options to Theme's management. YGM
has offered to inject casual wear chain Hang Ten - its
jewel asset - into Theme.

Speaking after the company's shareholder meeting yesterday,
Theme chairman Kenneth Lai Ngan-long said the company would
consider offers by Giordano and YGM.

"We'll take into account benefits of bank creditors, China
Everbright, shareholders and staff when examining the
offers. We hope to pick one offer as soon as we can," he
said. He said Theme had operated without any bank
facilities since its debt problem unfolded in 1997. "It is
miracle that we survived for the last 20 months," Mr Lai
added. "China Everbright has been very supportive to us
mentally and in terms of financial advice."  (South China
Morning Post  01-October-1999)


BANK BALI: Five scandal suspects arrested                  
Indonesian police have arrested five suspects named in the
Bank Bali scandal that has rocked the country's bank
restructuring and threatened the flow of foreign aid.

"We are now holding five people. We could hold them for at
least 20 days," said Colonel Saleh Saaf, spokesman at the
national police headquarters.

On Wednesday, police detained four bankers, including
former Bank Bali president Rudy Ramli, and two businessmen,
including a former deputy treasurer of the ruling Golkar
party, the Kompas daily said.  But one of them, Setya
Novanto, a deputy treasurer of the ruling Golkar party, was
released as he was scheduled to attend the opening session
of the People's Consulative Assembly today, the Bisnis
Indonesia reported.  Police also questioned A.A. Baramuli,
a former adviser to President B.J. Habibie, yesterday as a
witness in the scandal.

The arrest warrants cited fears that the suspects would
escape abroad or destroy evidence, Kompas said. None of the
six were charged.   The scandal centres on allegations that
the former management of Bank Bali colluded with government
officials, ruling Golkar party politicians and well-connected
businessmen to embezzle US$70 million from the
central bank.  Of the 100 people who received money, and
the larger group of people who were involved, only 10 have
been named as suspects. Of those, five have been arrested.  
(South China Morning Post  01-Oct-1999)


MITSUI OSK LINES: Reveals 3-year streamlining plan
Mitsui OSK Lines Ltd, (TSE:9104) targeting group sales of
880 billion yen (US$ 8.37 billion) and pretax profit of 37
billion yen for fiscal 2001, released a three-year
management plan yesterday.

The blueprint is designed to streamline operations, which
expanded in the April merger with Navix Line Ltd and to
raise international competitiveness.  Interest-bearing debt
will be reduced by 245 billion yen, or about 25%, mainly by
selling assets, and the parent's land-based staff will be
cut by a quarter, or about 200 people.

Cost savings over the three years are estimated at 20
billion yen. The plan also calls for a payout ratio of at
least 10%.  An exchange rate of 115 yen per dollar is
assumed for fiscal 1999 and 110 yen for the two subsequent
years. Since about 70% of revenues are in dollars and the
US currency has fallen from about 120 yen in fiscal 1998,
sales are expected to decline slightly both at the parent
and on a consolidated basis.  The company plans to
eliminate pension underfunding within five years.  (Asia
Pulse  30-sep-1999)


BOKWANG GROUP: President to be arrested
Following their second day of questioning Bokwang group
president Hong Suk-hyun, who is also the president-
publisher of the JoongAng Ilbo, in connection with their
investigation of tax fraud and misappropriation of company
funds at Bokwang, the High Prosecutor's Office said Friday
that it will requst that a warrant for the arrest of Hong
be issued the same evening.

The prosecutor's office disclosed that they have confirmed
that at least some of the allegations of Hong's involvement
in the case are true.One official said that Hong has
acknowledged some of the allegations, adding that the
prosecutor's office is determined to proceed with the
investigation without regard to Hong's position as the head
of one of Korea's most high-profile newspapers.

Meanwhile, Chong Wa Dae spokesperson Park Joon-young said
Friday that President Kim Dae-jung has specifically ordered
Minister of Justice Kim Jung-kil to ensure that the
investigation is conducted in a manner which is rigorous
and fair. According to Park, President Kim warned that the
misconception could arise that the prosecutor's
investigation is a case of interference with the mass media
because of Hong's position as JoongAng Ilbo head, even
though he is being charged as a private individual in a
case of tax evasion.

Head of the opposition Grand National Party (GNP) Lee Hoi-
chang said the same day that the summoning and
investigation of Hong by the prosecutor's office lays bare
the dictatorial manner of the current government, which he
says is suppressing domestic media. According to Lee, his
party plans to watch the progress of the investigation
closely for any indications that it could be a government
attempt to tamper with the freedom of local press.  
(Digital ChosunIlbo  01-Oct-1999)

DAEWOO GROUP: Fined by government
HYUNDAI GROUP: Fined by government
LG GROUP: Fined by government
SAMSUNG GROUP: Fined by government
SK GROUP: Fined by government
The government yesterday imposed a record 79.4 billion won
in fines on the top five chaebol, ferreting out inhouse
subsidies among their affiliates to the tune of 12.3
trillion won.

By penalty amount, the Samsung Group topped the list with
34.9 billion won, followed by the Hyundai Group with 24.2
billion won, the Daewoo Group with 13.5 trillion won, LG
with 5.6 billion won and SK with 1.2 billion won.  As a
result of the third probe, the inhouse subsidies uncovered
far surpassed the combined amount of 5.5 trillion won in
the first and second probes.

According to the Fair Trade Commission (FTC), the
government's chaebol watchdog, Samsung SDS, a Samsung
subsidiary, enabled Chae-ryong, son of group chairman Lee
Kun-hee, and other Samsung-related people to garner 400
billion won in potential profits through the handover of
its shares at a lower price.

"Samsung SDS is found to have offered the junior Lee and
others bonds with warrant at 7,517 won per share, far lower
than the current trading price of 140,000 won to 150,000
won," an FTC spokesman said.

More specifically, 3.21 million shares of Samsung SDS' in
BW were handed over at a lower price to Samsung chairman
Lee's son, Chae-ryong and his three sisters and senior
Samsung officials, Lee Hak-su and Kim In-ju, the FTC said.
As for Hyundai, the chaebol watchdog said that the
conglomerate's investment trust arm had allegedly purchased
corporate bonds of its sister firms, using money from funds
it operates, another example that proves that chaebol is
using its affiliate nonbank financial units as if a private
coffer to support subsidiaries.

In a press conference, Jeon Yoon-churl, the FTC chief,
said, "After a review, a separate probe will be conducted
into conglomerates spun off from the top five chaebol."

Jeon said that 485 financial transactions by over 30
subsidiaries of Hyundai and Samsung were checked through
the first use of the strongest investigative tool to call
for the disclosure of conglomerates' bank accounts,
observing, "This contributed greatly to the FTC's latest
probe into chaebol's internal subsidization."

Meanwhile, the FTC ordered KorAm, Hanvit and other banks to
put out an ad in newspapers for their active assistance in
the top five group's internal subsidization.  (Korea Times,
Digital ChosunIlbo  01-Oct-1999)

KOREA LIFE: Nationalization moves taken
Korea Life Insurance has now finally become state-owned as
the Financial Supervisory Commission (FSC) completed
several moves Friday to nationalize the ailing insurance
company, with the firm following orders to write off its
outstanding shares to nil and the government injecting W50
billion in state funds to reinforce its capital.

The financial watchdog said that it plans to pump
additional funds totaling approximately W1.35 trillion into
Korea Life in October to normalize the operations of the
firm as soon as possible. The FSC added that the exact
amount will be decided after the Korea Deposit Insurance
Corp. (KDIC), the state body through which the funds will
be injected, completes its appraisal of Korea Life's

The FSC ousted all the executives of the failed Korea Life
Insurance from their posts in a major step to nationalize
the firm and said that new management staff will be
appointed by October 10. "The FSC ordered all [Korea Life]
executives to suspend their jobs," said the FSC in its
statement. "And at the same time, we appointed new
management to replace them [the incumbent executives]."

Korea Life, the third largest insurance firm in the
country, had been under government control since March this
year due to mushrooming liabilities far exceeding its
assets. It's original chair, Choi Soon-yong, is currently
behind bars for misappropriation of company funds. The FSC  
ordered Korea Life to scrap its existing shares, including
those held by Choi, who is serving a five-year jail term
for illegally chanelling company funds out of the country.
(Digital ChosunIlbo, Business Day  01-Oct-1999)


MCL CORP.: Expects restructuring to be done early next year
Ailing MCL Corp Bhd, whose listed status will be taken over
by new group Jerasia upon completion of its restructuring
scheme, is to tap on its new parent company's strengths to
regain market share in the local apparel market.  

MCL chief executive officer Tho Tuck Woh said the company
had received shareholders' and creditors' approvals for its
proposed restructuring scheme.  Tho told reporters after
its AGM in Kuala Lumpur yesterday that MCL had submitted
the proposal to the relevant authorities.

"We hope to complete the whole restructuring scheme by the
coming Chinese New Year. It will see the delisting of MCL
and the listing of Jerasia on the KLSE second board," he

Tho said the Jerasia group manufactured a wide range of
quality fashion ladies apparel for international brandnames
such as Sag Habour, Sunshine & Starshine, Eddie Bauer,
Radcliffe and Bentley.  Tho said the US accounted for about
90% of the group's turnover, with the European Union,
Canada and Australia accounting for the remainder.

The Jerasia group achieved a pre-tax profit of RM10.2mil on
a turnover of RM113.6mil for its financial year ended Dec
31, 1998. It 1997, it achieved a pre-tax profit of
RM5.99mil on a turnover of a RM69.3mil.  MCL, which has
three brandnames of its own--Lady Like, Charlie and Milani
Uomo _ will be focusing on expanding its local apparel
business which had dropped by more than 50% since the onset
of the regional economic crisis.

Tho said MCL, which now had 120 point-of-sales (POS)
nationwide, also planned to open 25 POS annually starting
from next year, with each POS estimated to cost RM15,000.
Tho noted that the company had recently acquired the
license to open MNG boutiques in Malaysia. MNG is a Spanish
brand which specialises in high quality ladies apparel.

"We plan to open our first MNG boutique in the Mid Valley
City in Kuala Lumpur towards the year's end. The boutique
will cost about RM6mil and has a floor size of 5,500 square
feet, making it the largest among MNG's 486 outlets
worldwide," he said.  (Star Online  01-Oct-1999)


MONDRAGON INT'L PHILIPPINES: Creditors seek foreclosure
Creditors of Mondragon International Philippines, Inc.
(MIPI) decided they could no longer wait for a white knight
to save the holding firm and trooped to the courts to begin
foreclosure proceedings.

AsianBank Corp. vice-president George Chua told
BusinessWorld AsianBank, FarEast Bank and Trust Corp.
(FEBTC) and United Coconut Planters Bank (UCPB) have
decided to foreclose on MIPI's leisure estate in the former
Clark airbase due to failure of the company to settle its
obligations.  "They haven't been paying us for over a year
now," Mr. Chua said.

Mondragon manages the Mimosa leisure estate, which has golf
club, hotel and casino facilities. The casino was closed
because of accumulation of unpaid rent to the government.
Mondragon has earlier said it is talking with an investor,
which would infuse fresh funds into the company, but Mr.
Chua said this remains a promise.

"We've been hearing that story for a long time," Mr. Chua

He could not tell how long the judicial foreclosure
proceedings will be and whether he believes Mondragon's
creditor banks would be able to recover their exposure to
the company.  "We don't know yet, that's why we want
another audit and due diligence," Mr. Chua said.

He added, however, that until the hearings at the
Securities and Exchange Commission (SEC) regarding the
controversial board meeting held last week are finished,
banks may have to put their plans on hold. But he noted the
delay is not likely to be significant.  Mondragon officials
and creditor banks started the hearings yesterday.

The SEC will decide whether to nullify the results of the
board meeting where creditor banks elected a new set of
officers to Mondragon's nine-member board of directors.
The directors now include AsianBank president Eduard S. Go
as chairman of the board, FEBTC assistant vice-president
Mario B. Palou and AsianBank's Mr. Chua as treasurer. Other
top officials from the three banks were elected directors
of the board.

In reaction, Mondragon filed a 61-million-peso (PhP)
(US$1.5 million at PhP40.858:US$1) suit against the new
directors.  But Mondragon still owes the three banks $20
million or roughly PhP820 million, with AsianBank and FEBTC
accounting for $7.5 million each and UCPB, $5 million.
An analyst from a foreign brokerage house said it would be
hard for the banks to recover their exposure in the casino
operator, since another government entity has claims to its
assets -- Clark Development Corp. (CDC).

He pointed out as it is, it would be hard for the banks to
recover their exposure by seizing the right to buildings
and other properties in the Mimosa leisure estate, possibly
the only properties available to the creditors.

"The land there belongs to CDC. What if the buildings
belong to those leasing the land, just like in normal lease
agreements?" the analyst said.

He said banks may have no choice but to take over the
operations of Mondragon, look for the right investor and
possibly make another lease contract with the government.
"Or else they will never get back their exposure. That's
the hard part," the analyst said.  (Business World  01-Oct-

VICTORIAS MILLING CO.: To pay interest to creditors
Victorias Milling Company, Inc. (VMC) will start paying
loans interest to various creditors in December or early
next year and three years later after which, VMC will
commence settling the principal loans, the sugar firm's
president Manuel B. MaQalac said.

He said that in the next two to three years, the company
will not earn any profit but its cash flow will be adequate
to support the operations.  The corporate finacial scenario
was conveyed to officers of the Vicmico Industrial Workers
Association (VIWA) during a labor-management dialog held
recently when the rank-and-file union began negotiating its
new collective bargaining agreement (CBA), which will take
effect October 1, 1999 to September 30, 2004.

The VMC management has asked for a two-year moratorium on
any kind of salary increase, citing the financial situation
of the company.  Under its rehabilitation plan, VMC is
given until November 6 to raise the P567 million
subscription rates. Nevertheless, MaQalac has not closed
the door for the union to come up with a study for the wage
hike being asked.

Meanwhile, he gave assurance that retrenched workers and
retirees will receive their separation pay in full, adding
that should the subscription rights offering be successful,
they will be paid by the end of November.  Should it fail,
the 53.35 per cent shares of the company will be bidded
out.  The process may run until December, hence payment can
be made in January.  (Asia Pulse  30-Sep-1999)


GOLDTRON LTD: Creditors favor rehab plan
Separately, Goldtron Ltd said yesterday that there are
grounds for the company to continue as a going concern
because its creditor banks have indicated support for
Goldtron pending the finalisation of the revamp of its
businesses and loans, its conditional deal with an investor
to invest a minimum of $35 million by way of subscription
of new shares.  (Business Times 01-Oct-1999)

HOTEL GRAND CENTRAL: Posts first-half loss
Hotel Grand Central has reported group net loss of $4.55
million for the six months ended June 30, against a profit
of $769,000 in the same period last year.

It was hurt by an unrealised foreign exchange loss of $4.56
million due to the appreciation of the Australian dollar
against the Singapore dollar. The group holds Australian-
dollar-denominated bank loans.  Turnover dipped 2 per cent
to $20.5 million.  

Meanwhile, Hotel Grand Central said yesterday that Chng Gim
Huat, who has just been sentenced to four months' jail for
tax evasion and ordered to pay a penalty of $1.06 million,
resigned as a director of Hotel Grand Central and two
subsidiaries with effect from Sept 29. The two subsidiaries
are Grand Central Development (1978) Pte Ltd and Grand
Central Trading (Pte) Ltd.  (Straits Times  01-Oct-1999,
Business Times  02-Oct-1999)

IPC CORP.: Close to debt scheme finalization
IPC Corporation, which is now close to finalising a scheme
to restructure its debts, said last night that the company
"is able to continue as a going concern".

Updating the firm's situation, IPC said there has been
sufficient information given to the market to avoid the
establishment of a false market in the company's
securities. The directors, it added, "have made and will
continue to make timely disclosure and announcements" on
all matters which may have material impact on the financial
position of the company and the scheme.  

Meanwhile, IPC Corp has recorded what could well be a first
in local corporate history -- a negative net tangible asset
(NTA) backing per share.  Its NTA per share for the six
months to June was -1.22 cents, compared to a positive
figure of 5.39 cents last year.  This essentially means
that the firm has more liabilities than assets -- giving
it, in essence, zero value.

Based on its share capital of 1.2 billion shares, this
means that IPC had net liabilities of about $14 million.  
But all is not lost.  The company, which has debts of
$291.5 million, has also just received a cash advance of
US$5 million (S$8.6 million) from white knight Infomatec as
part of a $130 million rescue package.

Latest figures released by the company also show that it is
doing its bit to slowly claw its way out of the pit.  It
posted a smaller interim loss of $19.6 million, compared to
last year's loss of $22.5 million. The improvement came
despite a massive drop in turnover by 80 per cent to just
$9.8 million.  Loss per share was 13 per cent lower at 1.58

In reviewing its performance for the six months to June,
IPC said the massive drop in sales was due to the
discontinuation of its personal computer business.  That
decision has turned out to be right given the fact that its
two new core businesses -- so-called "ultra-thin" client
computing and wireless telecommunications -- turned in
positive contributions.

The result: an operational pre-tax profit of $1.07 million
for the half year.  This represents a significant reversal
from a loss of $14.3 million in the same period last year.  
IPC said the ultra-thin client and wireless
telecommunications businesses achieved positive profits of
$600,000 and $840,000 respectively. The group also expects
its third core business unit, e-commerce, to make positive
operating returns during the second half.

In a statement issued yesterday, IPC chairman Patrick Ngiam
said the group had been working closely with scheme
managers Arthur Andersen to restructure its debt.  "We are
optimistic that a final resolution is in sight, which
should mean the elimination of the high interest costs and
unrealised foreign exchange loss that impacted on the
current results, and a return for the group to bottom-line

For the half year ended June, IPC incurred foreign exchange
losses of $5.7 million, up from a loss of just $21,000
previously.  On the outlook for the next six months, IPC
said it expected the same level of profitability. No
interim dividend was recommended.  (Business Times  02-Oct-
1999, Straits Times  01-Oct-1999)

LIM KAH NGAM: To give creditors rehab plan soon
Property group Lim Kah Ngam (LKN) said yesterday that the
first draft of its debt restructuring will be given to
creditor banks shortly.

"The company and the special accountant are in discussion
with the company's lawyers on the documentation for the
scheme," LKN said in a statement.  "It is envisaged that
the first draft of the restructuring agreement will be
distributed to all creditor banks shortly."

Late last year, LKN announced it was in technical breach of
certain financial covenants due to a fall in the value of
its property assets. Its lenders agreed to a standstill
agreement, leading to a restructuring of its credit

The company's directors believes "there are reasonable
grounds for Lim Kah Ngam and its subsidiaries to continue
as a going concern because the creditor banks remain
supportive of the group's proposed restructuring scheme".
It added that most of its creditors had indicated their
support for the scheme.  (Business Times  01-Oct-1999)

L&M GROUP: Debt rehab talks continuing
L&M Group Investments said its creditor banks remain
supportive and further discussions on the broad outline of
financial restructuring options presented by special
accountant Ernst & Young have taken place.  It added that
the substantial shareholders have shown their support and
commitment to the company with the conditional offer to
subscribe for 30.7 million new shares and the provision of
a line of credit of up to $7 million.  (Business Times  01-

VAN DER HORST: Quick debt rehab unlikely
A quick completion to Van Der Horst's loan restructuring is
unlikely, even though the company has made some progress.
The successful restructuring of the company's loans is
unlikely to be completed before year-end.

About a month ago, VDH announced that the company and the
restructuring sub-committee of its lenders had arrived at
an in-principle agreement on a term sheet for the
restructuring of the remaining term loans of the group,
amounting to about $119 million. The term sheet was first
tabled more than six months ago.  This represented an
important first step in the process towards a hopefully
successful restructuring of the term loans.

Since then, the sub-committee has been working to obtain
similar agreement from all the other lenders.  Yesterday,
the marine engineering group said in a statement: "We have
been informed by the sub-committee that discussions with
the more than 20 other lenders are continuing. The sub-com
requires a little more time to present, explain and discuss
the several matters in the proposed term sheet to those

However, VDH said this was not expected to unduly delay the
entire restructuring process. Efforts are being made to
complete this expeditiously.  VDH will make further
announcements on the restructuring as and when appropriate.
In the meantime, the company is continuing to sustain its
businesses in the service engineering division. For the
remaining period of the restructuring process, VDH believes
it has enough working capital to operate as a going
concern. (Business Times  02-Oct-1999)


BANK OF AYUDHYA: Ratanarak businesses adjusting holdings
Bank of Ayudhya and five companies associated with the
Ratanarak family said yesterday they had sold a combined
28.944% stake in Siam City Cement for 9.117 billion baht.

The Bank of Ayudhya, Ayudhya Insurance, Ayudhya Insurance
and Trust, Tun Mahachoke, Tun Mahalap and Bangkok
Broadcasting Co sold altogether 72.36 million shares in
Siam City Cement to Sunrise Equity.  The shares were sold
at 126 each, equal to the highest price for Siam City
Cement reached in the past 90 days of trading on the Stock
Exchange of Thailand.

In a statement to the SET, Siam City Cement said the six
firms held a total of 1.89 million shares, or 0.76%, in the
firm after the transaction. Shares of Siam City Cement
closed at 124 baht yesterday, down one baht, on turnover worth
760,000 baht. The company is Thailand's second-largest cement producer.

The Ratanarak family sold a 24.99% stake in Siam City
Cement to Holderbank, one of the world's largest cement
producers, for 6.3 billion baht in August 1998. Holderbank
had earlier announced plans to set up a holding company
with the Ratanarak family to manage their stake in Siam
City Cement.

Siam City Cement earlier this month announced it had
received full approval from its 63 creditors to restructure
loans totalling $501.8 million and 1.5 billion baht.
Under the agreement, the firm will raise six billion baht
in new capital through the issue of 100 million new shares
to repay $250 million in debt.

Remaining loans will be restructured into seven-year terms,
with a two-year grace period.  Debt of $196.46 million and
4.8 billion yen will carry an interest rate equal to Libor
(the London Interbank Offered Rate) plus 2.75 percentage
points.  Debt of 2.01 billion baht will carry a rate equal
to minimum lending rates.

The Ratanarak family has long indicated that it was willing
to divest its other interests to support the Bank of
Ayudhya.  The bank says it expects to make full loss
provisions and reduce problem loans to 32% of total loans
this year. Problem loans stood at 36% of total loans in
June, down from a peak of 42% in March.  The bank yesterday
denied that it was considering applying for capital
assistance from the government.

"The bank's current capital position is considered to be
one of the most financially stable among Thai commercial
banks," Jamlong Atikul, bank senior executive vice-
president, said in a statement to the Stock Exchange of

The bank said its loan-loss provisions stood at 85% at the
end of June, one of the highest in the industry.

"Without adverse changes in the economy, the Bank of
Ayudhya expects to be able to fulfill the 100% reserve
requirement by the end of 1999, a year ahead of the
official requirement," Dr Jamlong said, adding the bank had
raised 56 billion baht in capital in the past year.

The bank said it was allocating 600 million baht for a new
early retirement scheme aimed at reducing its staff count
by 1,400.  Its shares closed at 12.25 baht yesterday,
unchanged, on turnover worth 88.92 million baht.  (Bangkok
Post  01-Oct-1999)

PACIFIC ASSETS: Office swapped for debt repayment
Pacific Assets Plc's (PA) shareholders agreed yesterday to
acquire the company's ex-managing director Vinai
Phongsathorn's 1,000-square-metre office space in the Silom
Centre building to cover the Bt182 million debt repayment.
Vinai proposed that PA take over the office space instead
of a cash payment of Bt182 million borrowed by Praewa Co
Ltd, his wholly owned property company. He did so to avoid
possible lawsuits from the company for abusing his
managerial power in lending money to his own companies
without approval from other directors.  (The Nation  01-

RATTANAKOSIN INSURANCE: Creditors approve to rehab talks
Early risers were greeted by a strange sight yesterday at
the Royal Turf Club, as 5,000 people filed into the
stadium, some in business suits, others in jeans and
sandals.  No, it wasn't an off-hours stakes race. But it
might have been the biggest debt restructuring meeting held
in Thailand to date.

Creditors of Rattanakosin Insurance, ranging from bankers
to garage operators, met to discuss on the fate of the firm
and what to do about its massive debts.  The creditors sat
in the stands, while representatives of the company stood
at microphones in the field.

The atmosphere was quite cordial, collegiate even. When it
came time for a vote, creditors raised their hands-an
observer was reminded of the wave at a football match-while
company staff walked the aisles to collect each person's
written vote.  The outcome? Creditors agreed to not file a
bankruptcy suit, and will form a working committee for
further negotiations.  (Bangkok Post  01-Oct-1999)

SAWASDI HORRUNGRUANG: Debt restructuring in full swing
Severely battered steel tycoon Sawasdi Horrungruang has
proposed to dilute existing shareholders' ownership in four
steel and related companies by 75 per cent via conversion
of debt into equity in a massive $2-billion debt
restructuring of his NTS Steel group.

A condition of the deal will enable shareholders to buy
back the equity within five years.  Sawasdi claimed local
creditors have agreed tentatively to the proposal involving
NTS Steel, Suntec, Steel Top and Sri Racha Harbour, following
three years of discussion, but he was not yet certain about
the foreign creditors. Sawasdi's NTS Steel Group is among the
country's biggest corporate debtors.

In one of the four companies, he said ownership dilution is
up to 90 per cent through the proposed conversion of $300
million out of the total $500 million debt into equity.
He said the buyback condition will give existing
shareholders "some hope."  The steel industry is one sector
that has run into a huge overcapacity following the
economic collapse in 1997.

Burdened by massive debts secured during the boom years for
relentless expansion, the NTS Steel group has virtually
ground to a halt.  Only NTS Steel is still running its
operation with capacity utilisation of about 30 to 40 per
cent. For Steel Top, factory construction work has been
suspended. The other two units -- Suntec and Sri Racha
Harbour -- have also suspended operations.  He said he is
now ready to step down from management when the creditors
take over the companies.

Under the proposal, Sawasdi has asked for an opportunity to
buy 50 per cent of the debt back within five years.
Discussions with creditor banks have moved slowly because
local and foreign banks have to share the loss in debt
restructuring that will require the banks to set more

NTS Steel Group, Cementhai Steel, Bangkok Steel Industry,
and Namheng Steel earlier retained McDonald Investment Inc
as adviser to assist in the evaluation of a four-way
business combination/consolidation.  The four companies
have the capacity to produce about 2.9 million tonnes of
steel products annually, including high-quality wire rod
and a variety of bar products.

The current market demand in Thailand is about two million
tonnes.  Meanwhile, NTS Steel's Sawasdi is waiting for
another debt restructuring deal with Asset Management Corp
which won some biddings for assets from the Financial
Sector Restructuring Authority.  The deal is reportedly
worth about Bt5 billion covering some of Sawadsi's
corporate and personal debts.  A source close to this
matter said the contract signing is due within two weeks.
(The Nation, Business Day  01-Oct-1999)

TELECOMASIA CORP.: Signs MOU with 45 creditors on debts
Debt-ridden TelecomAsia Corporation Plc (TA), the
metropolitan fixed-line operator, yesterday signed a
memorandum of understanding with 45 local and foreign
creditors over its Bt63.11 billion debt-restructuring plan
which is scheduled for completion by the end of the year.

Details of the plan have not yet been finalised but the
company was anxious to sign the memorandum as it had
committed itself to make progress on the restructuring by
Sept 30. The commitment was made to the Corporation Debt
Restructuring Advisory Committee.

The debt-restructuring framework approved by the creditors
includes payment rescheduling and the issue of convertible
preference shares. But the creditors were only willing to
write off less than 2 per cent of the group's debt.  The
group's outstanding debts of Bt49.56 billion which were in
the form of secured loans will be rescheduled with a grace
period of two years.  The secured loans will be repaid in
instalments from the second quarter of 2002. The last
payment will be made before the end of 2008. Interest will
be limited to the London Interbank Offered Rate.

The remaining Bt13.46 billion-worth of unsecured loans will
be settled through a combination of debt forgiveness, an
immediate cash repayment of about Bt5.61 billion and the
issue of promissory notes worth Bt6.71 billion.  Supachai
Chearavanont, TelecomAsia's chief executive and president,
declined to give specific details of the debt-restructuring
package but said that the group would have to finalise
details of the plan before the end of the year.

As part of the package, German export bank Kreditanstalt
fur Wiederaufbau, which is the group's largest creditor,
will inject fresh funds of US$150 million by taking up 702
million convertible preference shares.  The injection will
lift the German bank's stake in TelecomAsia to 24 per cent
of its paid-up capital.  The capital injection will dilute
the stakes of the Charoen Pokphand group and its affiliates
which currently hold 37 per cent and Bell Atlantic which
holds 18 per cent through Nynex Network System (Thailand)

TelecomAsia will use the extra funds to repay debts to its
unsecured creditors.  In addition, the German bank has
agreed to give all existing shareholders the option to buy
back the shares after three years at prices to be
determined later.  Shareholders of TA can buy back their
shares in the third year and the eighth year after KfW's
investment in TA, while the German bank is able to convert
the secured preferred shares to common shares from the
second year onwards.

"KfW's willingness to support TA with special measures is
an expression of trust in the fixed-line company and the
Thai economy. The bank is also planning to invest nearly
PDS 3 billion in large scale projects here," said Hans
Reich, chairman of the board of managing directors of KfW.

He attributed success of the debt-restructuring plan to a
"sacrifice" by all the company's creditors.  Some creditors
who had extended unsecured loans agreed to accept a cash
payment and have either written off the balance or extended
the repayment period by 14 years, he added.

The restructuring plan will enable TA to attain cash flow
adequacy and meet debt service obligations in the
foreseeable future as well as maintaining the company's
position in the telecom industry.  Siam Commercial Bank's
(SCB) senior vice president, Somrudee Amatayakul, said
local creditor banks of TA also agreed to reschedule the
debt-repayment period. However they refused to provide a
haircut for TA.

SCB is one of the four largest local creditors with over
Bt2 billion worth of loans extended to TA. The other three
are Krung Thai Bank, Bangkok Bank and Thai Farmers Bank.
She added that creditor suppliers, including AT&T, Tomen,
Siemens, Mitsui and NEC prefer to wait for the deals come
through before granting the company a slight cut, instead
of getting the money from TA now and offer a higher level
of debt reduction. She denied to provide further details.
An analyst said TA's case was the first telecom firm which
has had its debts restructured through a haircut.  (The
Nation  02-0ct-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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