TCRAP_Public/991008.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, October 8,1999, Vol. 2, No. 196


* C H I N A  &  H O N G  K O N G *

GOODBOND INDUSTRIES: Facing petition for winding up
INNOVATIVE INT'L HOLDINGS: Reaches standstill agreement

* I N D O N E S I A *

GARUDA INDONESIA: In debt rehab talks with Eximbank
PT KERAMIKA INDO.ASSOS.: Closes factories to reduce costs
PT KURNIA KAPUAS UTAMA: Restructures $12 million in debts

* J A P A N *

MITSUBISHI MOTORS: Trimming more jobs to reduce costs

* K O R E A *

HANBO STEEL: Creditors extending purchase negotiations

* M A L A Y S I A *

INDOFOOD SUKSES MAKMUR: Debt rehab includes asset transfer
MALAYSIAN INDUS.DEVEL.FINANCE: To go through restructure

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


* T H A I L A N D *

DBS THAI DANU BANK: To post second half losses
MEC FAR EAST INT'L.: Sued for 30 million baht
RADANASIN BANK: UOB to buy 75 percent
SIAM CHEMICAL: Posts 1st quarter loss
TANAYONG PLC: Files explanation of debt plan with SET

C H I N A  &  H O N G  K O N G

GOODBOND INDUSTRIES: Facing petition for winding up
The High Court of Hong Kong SAR has scheduled a hearing for
December 8 on the petition of Wong Yee Hing for the winding
up of Goodbond Industries Limited. A notice of legal
appearance must be filed on or before December 7.

INNOVATIVE INT'L HOLDINGS: Reaches standstill agreement
The share price of Innovative International (Holdings)
yesterday dropped 4.58 per cent to close at 22.9 cents
following its announcement on Tuesday agreeing to pledge
most of its assets to creditors as part of a standstill

The troubled car and mobile-phone antennae maker and some
of its subsidiaries executed a guarantee on Tuesday in
favour of Standard Chartered Bank.  The group has started
to discuss with financial creditors and convertible note-
holders a rescheduling of its liabilities since April due
to its inability to make repayments.

"These discussions are ongoing and the directors believe
the standstill arrangement will provide the group with a
stable environment in which to finalise a financial
restructuring with the bank group and the note-holders,"it

The outstanding principal amount of the loan, including
accrued interests, as at the end of July was $624 million.
The group also owed $45 million to its trade creditors at
the same date.  But its audited net asset value as at the
end of March was $192 million.

Under the standstill arrangement, convertible note-holders
and financial creditors agreed not to make demands or
pursue legal proceedings against the group for the existing
overdue loans for the period up to the end of next March.
The standstill may be extended each time for a further one-
month period at the discretion of participating creditors.

The group has agreed to grant security over its assets and
undertakings, but declined to disclose details of the
guarantee.  Standard Chartered Bank will act for itself and
as an agent on behalf of convertible note-holders and the
financial creditors.  (Hong Kong Standard  07-Oct-1999)


GARUDA INDONESIA: In debt rehab talks with Eximbank
The nation's flag carrier Garuda Indonesia said it is
optimistic that it will reach an agreement with its
creditor U.S. Exim Bank to reschedule its debt after a debt
guarantee given by the government.  US Exim Bank has said
that it would agree to a debt rescheduling proposed by
Garuda if the government provides a guarantee for the debt
already due for repayment.  

Meanwhile, the government is saying that it will not be
easy to dissolve the nation's flag carrier Garuda
Indonesia, even though the state enterprise's financial
burden has reached enormous proportions and is facing
difficulties to serve its outstanding debts,
assistant to minister for state enterprises said.

"The process to make a company insolvent must go through
the court mechanism and there is no guarantee it can
proceed smoothly and quickly," Sofyan Djalil said here last
Friday. (Asia Pulse  05-Oct-1999)

PT KERAMIKA INDO.ASSOS.: Closes factories to reduce costs
Debt-ridden ceramics maker PT Keramika Indonesia Assosiasi
has closed down some of its inefficient factories. KIAS is
saddled with a debt of $110 million in loans received by
one of its units PT KIA Keramika Mas (KKM) from the
International Finance Corp, a subsidiary of the World Bank.
The management said KIA had a debt of $205 million due for
repayment now, including $110 million debt of KKM. Talks
between KKM and IFC on debt restructuring were still in
progress after a standstill agreement in January.  
(NewsHound  07-Oct-1999)

PT KURNIA KAPUAS UTAMA: Restructures $12 million in debts
Formalin and resin producer PT Kurnia Kapuas Utama
(JSX:KKGI) has succeeded in restructuring $ US12 million of
its debts, which fell due on December 1998, to be repaid in
four years, a company spokesman said.

The spokesman said the debts were syndicated loans from six
local and foreign banks; the Singapore-based Sanwa Bank ($
US1 million), Jakarta-based American Express Bank ($ US3
million), Jakarta-based PT Sanwa Bank ($ US1 million), PT
Maybank Nusa Jakarta ($ US2 million), PT Tokai Lippo Bank
Jakarta ($ US1 million) and PT Pan Indonesia Bank Jakarta
($ US4 million).

Under the debt restructuring agreement, the company would
pay $ US2.6 million for the first year, $ US2.6 for the
second, $ US3 million for the third and $ US3.8 million for
the fourth year, the company said.  (Asia Pulse  05-Oct-


MITSUBISHI MOTORS: Trimming more jobs to reduce costs
Mitsubishi Motors said it will further trim its domestic
white-collar workforce as Japan's fourth-largest automaker
moves to shrink debt and boost profitability.

The maker of mid-size Galant sedans last year announced
plans to reduce managerial employees in Japan to 12,000 by
the end of March 2000 from 13,400 as of March 1998.  NHK
news said the Tokyo-based automaker will cut the number by
another 1,500 "in coming years". A Mitsubishi Motors
spokesman said the company has not decided exactly how many
jobs it will eliminate.

Mitsubishi Motors is trying to avoid the fate of Nissan
Motors, which in May sold 37 percent of itself to France's
Renault to help repay debt. Nissan has posted group net
losses in six of the past seven years.

Mitsubishi Motors is cutting jobs and selling assets such
as land as part of a program to put it on firm financial
ground by the year through March 2001. Mitsubishi Motors
held 1.77 trillion yen (US$16.6 billion) in consolidated
interest-bearing debt at the end of March.  (Bloomberg,
Business Day  07-Oct-1999)


HANBO STEEL: Creditors extending purchase negotiations
Creditors of South Korea's Hanbo Iron and Steel (KSE:
019200) will extend the exclusive negotiation period for a
consortium led by Nabors of the United States on buying the
bankrupt steelmaker until the end of next month.

Creditor sources said they will provide the extension
because Nabors have been earnestly pursuing negotiations by
bringing a team of lawyers and experts to appraise Hanbo
Steel plants.  Creditors wanted to conclude the sale within
the initial two-month period allowed for bringing the case
to a close when the Nabors consortium was chosen as the
final bidder.

But Nabors has been unable to meet the deadline as a number
of problems blocked progress, including which party will
run Hanbo for the consortium after its takeover.  Nabors's
relations with Dutch steelmaker Hoogo Vens, initially named
to run Hanbo after the takeover, have apparently soured and
the consortium has brought in UEC, an affiliate of U.S.
Steel, to run Hanbo. UEC has been evaluating Hanbo steel
plants after sending a team of experts here Sept 28.

The sources said the conclusion of the case could be
delayed due to the need for court approval since Hanbo is
under court management. The key element in closing the deal
is the price, they added.  (Asia Pulse  05-Oct-1999)


INDOFOOD SUKSES MAKMUR: Debt rehab includes asset transfer
Indofood Sukses Makmur, which is 40 per cent held by Hong-
Kong-listed First Pacific, plans to transfer assets worth
3.5 trillion rupees (HK623 million) to new firms in a
corporate restructuring plan.

It is expected that the proceeds will be used to reduce the
world's largest instant foodmaker's government loans. Eva
Hutapea, president director of Indofood, said the
restructuring will be in two stages.  He said the company
would first transfer the assets of its four mills unit
Bogasari Flour Mills to four new firms, which would later
sell as much as 60 per cent in some or all the flour mills
to new investors.  The fours firms are Bogasari Sentra
Flour Mills, Intisari Flour Mills, Inti Abadi Kemasindo,
and Indobahtera Era Sejahtera.

Mr Hutapea said there are over 12 investors showing
interest in the four new firms.  Target purchasers of the
stake in the new firms include wheat suppliers, flour
users, flour traders and financial investors.  Mr Hutapea
did not disclose the prospective amount of the transaction,
but based on an independent appraisal report of Satyatama
Graha Tara, the market value of Bogasari's properties to be
transferred amount to 3.5 trillion rupees.

Indofood said the restructuring would enable strategic
investors to focus more on Bogasari's line of business and
help Indofood concentrate more on its core business of
branded consumer products.  But it is believed that the
move is part of Indofood's strategy to raise about US$400
million (HK$3.12 billion) to repay its US$770 million in

The controlling shareholders, the Salim family, need to
raise cash to pay off debts to the government that were
mostly incurred by its Bank Central Asia, which was once
Indonesia's largest non-state bank by assets.  While the
flour-related division in Bogasari is to be dropped,
Indofood said it would retain the assets related to pasta

First Pacific paid US$650 million to acquire a 40 per cent
stake in Indofood in June through its 100 per cent-owned
subsidiary CAB Holdings.  (Hong Kong Standard  07-Oct-1999)

MALAYSIAN INDUS.DEVEL.FINANCE: To go through restructure
Malaysian Industrial Development Finance Bhd (MIDF), which
suffered a huge losses in the last financial year, will be
restructured to put it on firmer grounds.

MIDF chairman Tan Sri Ahmad Sarji Abdul Hamid said the
company board was in the midst of finding ways to conduct
the restructuring exercise after the poor performance for
the year ended March 31.  Sarji, who is also chairman of
Permodalan Nasional Bhd (PNB) which has majority stake in
MIDF, said the MIDF board hoped to implement the
restructuring exercise soon.

"Losses of nearly RM500mil is massive, to say the least,
and calls for firm action," Sarji told reporters after the
MIDF AGM in Kuala Lumpur yesterday.  "Restructuring may
come in several forms. We can merge some of the
subsidiaires or close them up. For the time being we are
still undecided over how to go about it."

For the financial year ended March 31, 1999, the MIDF group
incurred a sharp plunge in performance resulting in a
consolidated loss before tax of RM499mil against a profit
of RM9.5mil the preceding year.  At the after-tax level,
the group's net loss attributable to shareholders rose from
RM2.9mil the preceding year to RM389.8mil for the year
under review.

According to Sarji, although the economic slowdown was a
factor, the main contributor to the loss was Oriental Bank
Bhd (OBB), in which MIDF has a 75.17% stake. The commercial
bank recorded a much higher loss before tax and zakat of
RM433.1mil, up from RM70.1mil previously.

Sarji said that the OBB loss was mainly due to a
substantially higher loan loss provisioning by the bank.
He said the bank's gross non-performing loans (NPLs) ratio
as at March 31 this year stood at 27.1%, markedly higher
than the preceding year's 17.7%.

"We found out that there were some alleged mismanagement
that had led to the massive losses by Oriental Bank," Sarji

The huge losses necessitated a capital injection of
RM700mil into the bank by Danamodal Nasional Bhd in the
form of exchangeable subordinated convertible loan (ESCL).
On the proposed merger subsidiary Malaysian International
Merchant Bankers Bhd (MIMB) and Aseambanker, Sarji said the
merger was not due to poor performance but was part of the
Bank Negara plan to trim the many banks into six anchor

Sarji said that it was hoped that there would not be any
retrenchment as a result of such the merger move.
For the year ended March 31, 1999, MIMB reported its first
ever pre-tax loss of RM56.4mil, due to significant
provisions made on bad and doubtful debts and losses
incurred from the disposal of NPLs to Danaharta Nasional

"The merger of MIMB should not be compared with the
problems faced by Oriental Bank. MIMB, in fact, made an
operating profit before provision of RM37.9mil despite
operating under an unfavourable ecoonomic environment,"
Sarji said.

On other areas of business, he said stockbroking subsidiary
MIDF Sisma Securities Sdn Bhd made an operating profit of
RM3mil in its first year of business, despite depressed
market conditions.  Manufacturing remained the main focus
of the company's lending activities with a total of 56
loans approved of which 52 (RM56.1mil) were for small and
medium-scale inudstries (SMIs).  Sarji said the MIDF group
was confident of reducing the losses significantly in this
financial year.  (Star Online  07-Oct-1999)


Holding out their punches for so long, Mondragon
International Phils., Inc. (MIPI) is now considering the
possibility of seeking judicial relief to cite the
Philippine Amusement and Gaming Corp. (Pagcor) in contempt
for refusing to allow the firm to resume its casino

This, said MIPI counsel Jun Francisco, was in response to
Pagcor's earlier statement that MIPI "cannot resume its
Mimosa casino gaming operations without a new license and
authority to operate a casino."

"MIPI plans to open Mimosa's Regency casino with or without
Pagcor. We have an order enjoining Pagcor from disrupting
the casino's operations," Mr. Francisco said over the

In a press statement, MIPI said Pagcor "cannot prevent the
Mimosa Regency Casino from operating in exactly the same
way" when the casino was open from April 1998 until December 14,

The Clark Development Corp. (CDC) ordered the casino's
closure because of a rental dispute.  The rental dispute
ended with a compromise agreement involving the CDC and the
Office of the President, providing for the reopening of the
casino.  But because of the casino's closure, added to
Pagcor's "self-defeating statements to prospective
investors about the validity of Mimosa's permit," financial
investors have "made it extremely difficult for MIPI to
raise the 325 million (Philippine) pesos (needed to pay for
obligations) for CDC to enable the casino to operate," MIPI

Mondragon's previous and current unsettled accounts to the
state-gaming agency stood at PhP82.2 million (US$2.05
million at PhP39.952:US$1) as of December 13, 1998. The
amount represents Pagcor's 10% guaranteed share of the
casino's earnings, not including penalties for non-

"Mondragon has long been appealing for an amicable
settlement with Pagcor, so that together, they can agree on
a mutually beneficial co-existence," the source said.
Operations at the Mimosa Regency Casino were stopped last
December 14.

Pagcor revoked Mondragon's authority to operate the Mimosa
casino "because of the latter's blatant and repeated
violations of the terms of its license and its refusal to
honor its commitments under the agreement signed with
Pagcor," the state-run agency said in a press statement.
Among Mondragon's alleged violations were the poaching of
Pagcor's regular players, implementation of adjustments in
the Mimosa casino's internal transactions without Pagcor's
approval, and its refusal to pay the state-gaming firm the
"right amount" (minimum guaranteed consideration of 10% of
its gross income or PhP75 million (US$1.9 million),
whichever is higher) to Pagcor.

"Mondragon has never denied its dues to Pagcor but points
out we consistently attempted to pay Pagcor the amounts due
from April until December 1998 while our casino remained
open and Pagcor strangely refused to accept payment," MIPI
said in a statement.  (Business World  07-Oct-1999)


DBS THAI DANU BANK: To post second half losses             
DBS Thai Danu Bank said yesterday that it will post losses
in the third and fourth quarters of this year because of
provisioning to be made for loan losses during those
periods.  DBS Thai Danu Bank is 58 per cent owned by DBS

Mr Pornsanong Tuchinda, the bank's president, said his
company had managed to restructure about 19 billion baht
(S$827 million) in non-performing loans in the first nine
months of this year. He added that his bank believed it
would be able to lower its non-performing loans to below 40
per cent from around 57.1 per cent at the end of June.

"We hope to be able to achieve the 37 per cent target by
the end of this year, but if things don't work out, we will
surely achieve 40 per cent," he told Reuters earlier this

Mr Pornsanong said that his bank's intention was to make
100 per cent provisioning for its non-performing loans by
the end of this year.  "At worst, the bank would want to
see 21 billion baht in provisioning, but if things go well,
then we may already have a 100 per cent provisioning," he

He added that the bank had provisioned up to 19.018 billion
baht till the end of June and may make another three
billion baht in further provisioning.  Additionally, he
said that he expected the bank to return to good health
some time next year.  The bank is considering setting up an
asset management corporation.  (Reuters, Straits Times  07-

MEC FAR EAST INT'L.: Sued for 30 million baht
Ayudhya Investment and Trust Plc (Aitco) is suing MEC Far
East International Plc, an importer of used machinery for
restoration and resale, for repayment of 30 million baht.

The finance company says it took action as the machinery
importer had failed to restructure debts totalling 3.7
billion baht with a number of creditors. Aitco believes
that MEC Far East is insolvent.  Aitco has named Ekachai
Burapachaisri, MEC Far East's chairman and president, and
Anuwat Burapachaisri, the company's director, as co-
defendants.  The Central Bankruptcy Court has scheduled the
first hearing on November 1.

Aitco told the court in a statement that, as an unsecured
creditor, it had lent 40 million baht to MEC Far East on
September 25, 1996 and that Mr Ekachai and Mr Anuwat had
guaranteed the loan.  MEC Far East has repaid 14.51 million
baht but still owes 24.45 million which, with accrued
interest, totals 29.93 million.

Aitco says several requests for repayment have been
ignored. MEC Far East's financial statement as of December
31, 1997 showed that its total assets were 3.91 billion
baht, compared with liabilities of 4.08 billion, leading to
a net loss of 1.21 billion, Aitco told the court.  On June
30 this year, MEC Far East told the Stock Exchange of
Thailand that its registered capital was 350 million baht,
total assets were 2.4 billion and liabilities 3.7 billion.
The SET has already classified MEC Far East as a company
undergoing rehabilitation.

MEC Far East recently decided to seek delisting, saying
that it would then be easier to restore the company's
finances.  Mr Ekachai has offered one baht each for 19.42
million shares in the hands of small investors, who hold a
combined 55.47% stake.  (Bangkok Post  07-Oct-1999)

RADANASIN BANK: UOB to buy 75 percent                      
United Overseas Bank (UOB), Singapore's third-largest bank,
agreed to buy 75 per cent of Radanasin Bank for a net
investment of 6.5 billion baht (about HK$1.29 billion),
becoming the fourth foreign owner of a Thai bank.

Officially, the purchase price is 15.1 billion baht. UOB's
cost will be reduced next month, after Radanasin's assets
are split into separate units for good and delinquent
loans.  The Thai central bank will buy the bad loans back
for 8.6 billion baht using central bank bonds, and become
the sole owner of the bad-loan unit, said Chaktip Nitibhon,
assistant governor of the Bank of Thailand. UOB will then
be hired on a fee basis to manage that company. The "good"
bank will be 75 per cent owned by UOB and 25 per cent by
the Thai Government.

"The price UOB paid is only for the licence, good assets
and management team," Mr Chaktip said.

Radanasin becomes the second state-owned bank in a month to
be sold, marking the latest step in the rehabilitation of
Thailand's battered finance industry. The government will
still own four of the country's 13 banks once the latest
agreement is settled. UOB is buying a bank where about 80
per cent of credits worth about 54 billion baht are in
arrears. Still, the purchase gives it about 65 branches,
mostly in Bangkok. Until now, UOB's activities in Thailand
were restricted to extending offshore loans from offices in
Bangkok, Chonburi and Ayudhya.

"The purchase is subject, amongst other things, to the
transfer of the existing non-performing loans," UOB said.

The bank will be renamed UOB Radanasin Bank.  The agreement
comes a year after Radanasin, a shell government company
formed to buy assets from bust lenders, was ordered to take
over Laem Thong Bank, the country's smallest bank. Laem
Thong ran into problems because of bad loans to projects of
its then controlling shareholders and Bangkok Land.  The
sale of Radanasin was delayed three times in the past
several weeks for the government and Singapore bank to
hammer out terms.  (South China Morning Post, Bangkok Post

SIAM CHEMICAL: Posts 1st quarter loss
Siam Chemical Plc reported a steep net loss of Bt844.90
million for the first quarter of the year against Bt215.08
million net loss over the same period last year.  (The
Nation  07-Oct-1999)

TANAYONG PLC: Files explanation of debt plan with SET
Tanayong Plc filed an explanation of its debt restructuring
to the Stock Exchange of Thailand yesterday.  The company
said as it entered into Debtor Accession on June 21 with
the Corporate Debt Restructuring Advisory Committee
(CDRAC), it was required to perform in accordance with all
terms and conditions under the accession.

Therefore, an approved restructuring plan and all
procedures regarding such restructuring have to be
completed by the company within three months, starting from
Aug 23. However, the time frame can be extended to not more
than two months if the restructuring plan is not approved
or needs to be verified by the creditors.  (The Nation  07-

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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