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   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

            Tuesday, October 12,1999, Vol. 2, No. 198

                                   Headlines


* C H I N A  &  H O N G  K O N G *

CHINA PROSPERITY HOLDINGS: SFC probing stock price hikes
CHINA UNITED HOLDINGS: To unveil restructure deal soon
GITIC ENTERPRISES: Sale quashed as investor bolts
GITIC ENTERPRISES: On verge of liquidation by creditors LEI
SHING HONG SECURITIES: SEC disciplines for laxities


* I N D O N E S I A *

PT INDOCEMENT TUNGGAL PRAKARSA: Secures German investor


* J A P A N *

ISHIKAWAJIMA-HIRIMA INDUS.: Taking cost-cutting measures


* K O R E A *

DAEWOO GROUP: Restructure forcing leadership replacement
DAEWOO MOTORS: To be nationalized prior to sell-off
GOLDBANK: FSS to launch probe into company
HYUNDAI GROUP: Restructuring moves to become more visible
KIA MOTOR CO.: To seek end to court receivership, raise won


* M A L A Y S I A *

ABRAR CORP.: Working on new restructuring scheme


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

PILIPINO TEL.CORP.: More restructuring negotiations ahead
VICTORIAS MILLING CO.: Bank obects to SEC re rehab plan


* T H A I L A N D *

THAI PETROCHEMICAL INDUSTRY: To pay $3.5 billion for advice


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

CHINA PROSPERITY HOLDINGS: SFC probing stock price hikes
--------------------------------------------------------
The Securities and Futures Commission (SFC) is conducting
an investigation into the sharp jump in the share price of
China Prosperity Holdings (Hong Kong) last month.

China Prosperity said that a letter from the regulator,
which it received two weeks ago, expressed concern over the
exceptional trading volume and price increase of the
shares.  The share price surged by 70 per cent in the week
before they were suspended from trading on 27 September, on
rumours of the formation of a joint venture.

The SFC warned that further suspension was possible if such
manner of trading persisted.  China Prosperity said it has
signed two letters of intent in connection with the
formation of Century Vision Network, a mainland based joint
venture for Internet and multi-media business.  It
stressed, however, no formal agreement has been signed as
yet and the deal might not go ahead.

It is estimated that if the joint venture pushes through it
would suffer from a post-tax loss of about $18 million in
the financial year 2000.  But the company said it would
make a turnaround and could record a $1.29 billion net
profit and a five times growth in subscriber number to
about 1,000 by the next financial year.

Based on 13 criteria used by an independent valuation
expert the joint venture is worth $20 billion.  China
Prosperity is mainly engaged in the construction business.
It also holds an equity interest in a power generation
company based in mainland China.  But the group has not
obtained any large construction contracts in Hong Kong this
year due to the slump in the building industry and instead
has started to look for opportunities to invest in new
business.

For the six months ended 30 June , the company recorded a
net loss of $50 million and a turnover of $60.5 million,
compared with a net loss of $76.2 million and a turnover of
$288.1 million for last year.  Trading in the shares resume
today.  (Hong Kong Standard  11-Oct-1999)

CHINA UNITED HOLDINGS: To unveil restructure deal soon
------------------------------------------------------
Diversified China United Holdings said it was poised to
unveil a debt-restructuring deal with a creditor. The
expected announcement will involve the issue of shares.
China United was suspended from trading since September 21.

GITIC ENTERPRISES: Sale quashed as investor bolts
-------------------------------------------------
The sale of Gitic Enterprises, the Hong Kong-listed
property and construction unit of the mainland's bankrupt
Guangdong International Trust and Investment Corp (Gitic),
will not go ahead as the potential investor has abandoned
his plan to acquire control of the company.

Gitic Enterprises chairman Mai Zhinan yesterday said the
group has been informed by ICEA Capital, the financial
adviser to the liquidators, that the investor has decided
not to pursue the acquisition.  Gitic was closed down by
the People's Bank of China for inability to repay its
foreign debt in October last year. It filed for bankruptcy
in January this year.  Gitic Enterprises' parent, Gitic HK,
is currently in liquidation.

The independent third-party investor, whose identity has
not been disclosed, offered on 3 September to acquire
284.346 million shares in Gitic Enterprises.  Gitic
Enterprises also said the possible disposal of its marble
business to one of its directors may not go ahead.  A
director of the company submitted a letter of intent (LOI)
on 29 September this year confirming its intention to
acquire the companies comprising Gitic Industrial or
Wilfred Marble Engineering and their subsidiaries and
affiliated companies, if any, through the acquisition of
the entire issued share capital of Gitic Industrial or a
reorganisation of the capital of Wilfred Marble.

Under the terms of the offer, the potential buyer will
repay the debts owed by Wilfred Marble and Gitic
Enterprises to the creditor banks through monthly
instalments.  The potential buyer will also secure from
creditor banks the release of all guarantees previously
entered into by Gitic Enterprises. Gitic Industrial is a
single-purpose vehicle wholly owned by Gitic Enterprises
and established for the purpose of holding Gitic
Enterprises' interest in Wilfred Marble.

Wilfred Marble is a wholly owned subsidiary of Gitic
Industrial and, through its subsidiaries, is principally
engaged in importing and selling on wholesale, retail and
project bases of construction materials, specially marble
and granite products in the mainland, including Hong Kong,
for the finishing and decoration of both commercial and
residential buildings.

Gitic Enterprises and its subsidiaries owed its creditor
banks an aggregate of about $56 million.  The company has
been informed by its bank creditors that unless there is
evidence of satisfactory development in the restructuring
arrangements by the end of this month, the banks will be
left with little alternative but possible winding-up
proceedings.  (Hong Kong Standard  11-Oct-1999)

GITIC ENTERPRISES: On verge of liquidation by creditors    
-------------------------------------------------------
Gitic Enterprises, the SAR-listed arm of the bankrupt
Guangdong International Trust and Investment Corp (Gitic),
is in imminent danger of being liquidated by creditor
banks.

Chairman Mai Zhinan said the company expected it would not
be able to repay borrowings of $56 million in accordance
with an informal standstill agreement with creditors.  
Creditor banks indicated they could be forced to initiate
bankruptcy proceedings against the company if there had not
been satisfactory progress in its restructuring before the
end of this month, he said.

Meanwhile, Mr Mai said a proposed buyout of the 58.66 per
cent interest in the company held by its bankrupt
controlling shareholder had fallen through.  The company
had received a proposal from one of its directors to buy
its marble-manufacturing business. The two sides had yet to
enter any binding agreements.

The company would apply today for resumption of trading of
its shares and warrants, suspended since October last year
following the closure of Gitic.  (South China Morning Post  
11-Oct-1999)

LEI SHING HONG SECURITIES: SEC disciplines for laxities    
-------------------------------------------------------            
Lei Shing Hong Securities and its dealing director, Johnnie
Chan Wai-chow, have been fined $110,000 and publicly
censured for lax internal control.

The Securities and Futures Commission and the Hong Kong
stock exchange fined Lei Shing Hong $80,000 and Mr Chan
$30,000. The SFC also suspended Mr Chan's registration for
three months and publicly reprimanded the firm.  It has
also publicly reprimanded Percy Lam Wai-hung for performing
the functions of a dealer's representative for Lei Shing
Hong while unregistered, from January 8 to January 23 last
year. It concluded that Mr Lam's fitness and properness had
been impugned.

The SFC and the stock exchange said that an inquiry found
Lei Shing Hong and Mr Chan had failed to adequately
supervise staff and to implement appropriate account
opening procedures in the period between April 1, 1997 and
January 31, this year.  They had also allowed staff to
carry out functions of dealer's representatives while
unregistered.  (South China Morning Post  11-Oct-1999)


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

PT INDOCEMENT TUNGGAL PRAKARSA: Secures German investor
-------------------------------------------------------
Heidelberger Zemen (HZ) group, a German cement producer,
has agreed to invest in PT Indocement Tunggal Prakarsa
(JSX:INTP), one of Indonesia's largest cement makers, INTP
said in a statement.  INTP said it wanted HZ to take part
in its debt restructuring plan.  (Asia Pulse  08-Oct-1999)


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

ISHIKAWAJIMA-HIRIMA INDUS.: Taking cost-cutting measures
--------------------------------------------------------
Japan `s heavy machinery maker, Ishikawajima-Hirima
Industries (IMI) plans to cut its workforce and curtail
non-profitable operations to cope with a slump, a report
said yesterday. It will shift its resources to high-growth
sectors related to environment protection, aerospace and
distribution of merchandise, the leading economic daily
Nihon Keizai said. The company will reduce the size of its
workforce to 12000 from the present 13200 by the end of
March 2001 by refusing to replace retirees and transferring
empoyees to subsidiaries or associated firms, the report
said. IHI forecast pre-tax loss of 13 billion yen (HK$936
million) in the year to March 2000.


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

DAEWOO GROUP: Restructure forcing leadership replacement
--------------------------------------------------------
Following Daewoo Group chairman Kim Woo-choong's unexpected
resignation from the leadership of the Federation of Korean
Industries, creditor banks are now in the process of
replacing the leadership of the group's core business units
under the forced restructuring process of new figures.

After tendering a resignation, Kim made a call on the
governor of Korea Development Bank (KDB), a group's major
creditor in charge of the forced reform of Daewoo Motors,
to express his commitment for swift restructuring. Yet at
the same time, Kim promised the KDB head that he will
relinquish the managerial post of Daewoo Motors, should the
restructuring plan fail to meet the agreed deadline.

Under the assumption that Kim take his hands off of Daewoo
Motors, the KDB and other minor creditors have been seeking
a new figure to head the auto manufacturing unit.  Some
have suggested that Chung Se-yung, former chairman of
Hyundai Motors, is perhaps the most appropriate person to
lead the Daewoo Motors' reform, considering his life-long
experience in the auto industry and international business
affairs.

Other big shots are also under review by creditor banks for
their caliber as the new head of Daewoo Motors.  With
regard to Daewoo Heavy Industries, another key affiliate of
the ailing group, KDB officials said the due diligence had
revealed that the company's assets are in excess of
liabilities.  They added that as long as the right leader
is appointed it will be able to make continuous profits at
least for the next few years.

"The company proved a solid balance sheet. The recently
conducted due diligence showed that Daewoo Heavy Industries
will remain profitable for the next few years," said a KDB
official.  "We are also examining alternative options for
its leadership. Various figures are under review."

For Daewoo Electronics, another profitable unit of the
conglomerate, the major creditor Hanvit Bank is likely to
name Bae Soon-hoon, a former information and communication
minister, new chairman of the company.  The due diligence
for the electronics company is scheduled to be completed by
the end of this week.

"We will complete the study on Daewoo Electronics'
financial position and future operational capacity within
this week," said a Hanvit Bank official. "The creditor
banks consider Bae as the most capable person to lead the
company in the post-Kim era. Yet we have not come to any
final decision."

Meanwhile, the government decided that investment trust
companies (ITCs) should be held accountable to themselves
for potential losses from their investments in bonds
floated by Daewoo.  Still the authorities added that the
ITCs and securities firms will discuss the exact ratios for
loss sharing.  The government added that it will wait until
the last minute and put public funds into the ITCs only if
it is deemed unavoidable.  (Korea Times  11-Oct-1999)

DAEWOO MOTORS: To be nationalized prior to sell-off
---------------------------------------------------
The government has decided that Korea Development Bank's
(KDB) W780 billion in loans to Daewoo Motor should be
converted into equity before the end of next month,
effectively nationalizing one of Korea's three automobile
firms, with the intention of eventually selling it off to a
private buyer.

A high ranking government official said Monday that the
plan is similar to the one used in handling car firm Kia
after it declared declared bankruptcy in the wake of the
1997 financial crisis. The official said the government
will lose no time in taking concrete steps to put its plan
into action once the Daewoo workout plans are confirmed
November 6.

Top management of Daewoo Motor, including Daewoo group
chair Kim Woo-choong, will step down at the same time that
the debt-to-equity conversion takes place, with a new
management team to be appointed. KDB said Monday that it
has not yet decided who would step in to replace current
management, but industry observers say former honorary
chair of Hyundai Motor, Chung Se-yung, is a prosepective
candidate for the top position. According to those close to
Chung, he has not received any formal offers.

The government officical added that while there are no
plans to abandon ongoing negotiations with GM to possibly
sell off Daewoo Motor, the government is determined not to
undersell the car firm. The government has decided on a
strategy to normalize operations at Daewoo Motor in order
to raise its asking price as high as possible before
putting it up for sale. GM and Hyundai have both been
mentioned as potential acquiring firms.  (Digital
ChosunIlbo, Korea Herald  11-Oct-1999)

GOLDBANK: FSS to launch probe into company
------------------------------------------
Financial regulators will this week launch a probe into the
Internet advertisement company GoldBank for alleged stock
manipulation and illegal issuance of convertible bonds
(CBs) abroad, according to an official at the watchdog
Financial Supervisory Service (FSS) yesterday.

A team of FSS investigators will look into whether a sharp
rise in the Internet startup's stock price was due to
illegal transactions by major shareholders of the company
using insider information or because of "operations" to
pull up the price, the official said.

The Korea Securities Dealers Association detected
suspicious stock trading after GoldBank's share price
skyrocketed to 312,000 won per share at one time in May
from 63,500 won in early February and a mere 6,200 won in
October last year.  The association said the alleged
rigging was seemingly committed by individual investors,
but the FSS will try to inquire into whether GoldBank
masterminded the manipulation.

In addition, the watchdog agency will investigate why the
online firm issued its CBs at a fire-sale price to two
Malaysia-based offshore funds - Rasi and Drexler - and how
the 66.3 billion won in profits that the funds took ended
up in the accounts of Central Banking Corp. (CBC), the FSS
official said.

Two lawmakers recently raised suspicions that the two
offshore funds may be paper companies owned by CBC
president Kim Suk-ki. They alleged that the funds purchased
GoldBank's CB issues with Kim's money.  CBC said that the
66.3 billion won in question belonged to it because the
merchant bank financed the funds' purchase on condition
that it would receive 99 percent of the resulting profits.

Meanwhile, the FSS expects a bumpy road ahead during the
course of the investigation because the offshore funds are
foreign firms, thus making it difficult for the watchdog to
conduct direct probes into them.  (Korea Herald, Digital
ChosunIlbo  11-Oct-1999)

HYUNDAI GROUP: Restructuring moves to become more visible
---------------------------------------------------------
The Hyundai Group's restructuring moves will likely become
more visible this month, ahead of the group's international
investor roadshows scheduled to begin in Hong Kong Oct. 25
for a two-week run.

As part of an effort to show its commitment to streamlining
its web of subsidiaries to domestic and foreign investors,
Hyundai will complete sell-offs of two affiliates by the
end of this month, group sources said. In addition, two
more subsidiaries will be spun off from the group during
this month, said the sources.

According to industry analysts, Hyundai Oil Refining and
Aluminum of Korea, originally intended for third-party sale
by the end of September under the group's restructuring
blueprint, that will be sold off by the end of October.
Hyundai executives also said that the group has yet to
complete discussions with creditors over its plan to merge
Inchon Iron and Steel and Kangwon Industrial Co. before
spinning off the merged entity.

As for the fate of the advertising agency, Kumgang, the
executives said that the most likely scenario is to sell
off the majority stake to foreigners to form a joint
venture firm.  Hyundai's restructuring blueprint calls for
cutting its affiliates from 44 to 26 by the year's end and
concentrating its resources on five strategic sectors,
including the auto industry. Depending on circumstances,
Hyundai's plan to split into five mini-groups specializing
in auto, construction, electronics, heavy industries and
finances/service may be implemented before 2003, the
executives said.

Meanwhile, Hyundai's top executives will explain the
growing concerns over the group's liabilities at the
international roadshows, which will also be held in
Singapore, London, New York, Boston and Frankfurt. (Korea
Herald  11-Oct-1999)

KIA MOTOR CO.: To seek end to court receivership, raise won
-----------------------------------------------------------
Industry sources report that Kia Motors is set to file a
formal request to seek an end to the court receivership
later this month as planned.

Kia had to suspend its pursuit to end the court
receivership following reports of state tax auditors
considering slapping 590 billion won in back taxes. A
conflict below the surface is being waged between the
National Tax Service and Kia. The tax the NTS is seeking is
about the portion of debts the government had forgiven in
the lead-up to the international auction of Kia.

Riding the robust sales of its minivans, Kia also is
planning to conduct a capital increase of 1 trillion won in
November, which, if successful, would greatly contribute to
its year-end goal of bringing down its debt to equity ratio
to below 200 percent.

According to Kia officials yesterday, the Korean automaker
will issue a total of 80 million new shares, aggregated
face value sum amounting to 400 billion won, on Nov. 20.
But on the basis of the 12,500 won level at the close of
the Oct. 8 trading day, the per-share price would amount to
the tune of 1 trillion won.  The new issues will be
assigned first to employees and existing shareholders, the
remainder being sold to the general public, Kia said.

With a successful capital increase of 1 trillion won, its
capital would rise to 2.8 trillion won from 1.88 trillion
won at the end of June, while its debt to equity ratio
would drop to the 170 percent level, from 380 percent in
June.  Kia officials are confident in the success of the
pending capital increase despite an adverse stock market
condition amid investors' jitters about the ongoing
resolution of the Daewoo crisis.

"Our key recreational vehicle models are doing quite well,"
a Kia spokesman said. "In addition, we are placing high
hopes on our new 1,500cc subcompact model, Rio, which will
make its debut next month."

He harked back to a Merill Lynch report, dated this past
June, that forecasted Kia would make 66 billion won in
profits this year, 340 billion won in 2000 and 630 billion
won in 2001. Quoting the report, he said, "Our per-employee
productivity also marked a remarkable leap from 23.6 units
in 1996 to 31.1 units in 1998."

By Kia's official figures, its profits would reach 140
billion won this year after a loss of 70 billion won in the
first half, which Kia officials said was attributed to the
coverage of accumulated losses for its three affiliates
including Asia Motors.  Kia has raised its target sale to
837,000 units this year. By September, it had sold a total
of 578,000 units, up 59 percent from the same period last
year.

Kia, which went bankrupt in 1997 after months of political
wrangling, was taken over by Hyundai in an international
auction. A protracted lack of action over the Kia crisis
was regarded as one of many weeds that grew into that
year's currency crisis.  (Korea Times  11-Oct-1999)


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

ABRAR CORP.: Working on new restructuring scheme
------------------------------------------------
Abrar Corp Bhd is in the process of formulating a new
restructuring scheme, which upon completion, will see it
becoming a wholly-owned subsidiary of a Newco (new
company).

The scheme involves a proposed capital reduction and
consolidation, debt reconstruction, scheme of arrangement
with shareholders, proposed transfer of Abrar's current
listing status on the KLSE and a proposed acquisition of
Hua Yang Development Sdn Bhd.

Abrar said in a statement that it had, on Oct 8, entered
into an agreement with Hua Yang in respect of the new
restructuring scheme (master agreement).  Pursuant to the
master agreement, Hua Yang will be injected into Newco,
which will assume the listing status of Abrar upon
completion of the proposed restructuring scheme. Newco will
then acquire the entire issued and paid-up share capital of
Hua Yang at a warranted purchase consideration of at least
RM160mil.

Hua Yang, a property developer with an issued and paid-up
capital of RM12.23mil, was incorporated on Dec 28, 1978 and
presently comprises a holding company and 19 subsidiaries.
The group's completed projects are in Perak, Selangor and
Negri Sembilan. It is also involved in the construction of
light industrial factory lots within the Sungai Buloh
Industrial Park.

Currently, the group owns substantial landbanks of 800ha,
the bulk of which is situated in Perak, Selangor, Negri
Sembilan and Johor.   Upon completion of the proposed
capital reduction, consolidation and the proposed
acquisition, Abrar's shareholders would exchange their
remaining shares in Abrar for new shares in Newco on a 1-
for-1 basis.  (Star Online  11-Oct-1999)


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

PILIPINO TEL.CORP.: More restructuring negotiations ahead  
---------------------------------------------------------    
After eight months of discussions with creditor-banks for a
memorandum of understanding (MoU) covering its debts, more
negotiations lie ahead for cellular firm Pilipino Telephone
Corp. (Piltel) for the actual restructuring of its 34.9-
billion-peso (US$862 million at PhP40.507:US$1)
liabilities.

Piltel, together with parent Philippine Long Distance
Telephone Co. (PLDT), and its creditor-banks have signed
the MoU last Friday, setting out the principal terms that
will provide the framework for the formalization of
Piltel's debt restructuring. The MoU will set the tone for
its negotiations with other creditors such as bondholders
and Japanese supplier Marubeni Corp.  Sources from creditor
banks said, though, the rehabilitation terms are still
subject to modifications pending the finalization of a loan
agreement.

"The next step would be the completion of the loan
restructuring agreement," a source from one of the bigger
creditor banks said. But "the terms will most likely be the
same," he added.

Piltel and PLDT president and chief executive officer
Napoleon L. Nazareno and Manuel V. Pangilinan signed the
accord with representatives of Piltel's various creditors.  
Based on the proposed terms of the debt restructuring, half
of Piltel's loans or Tranche A will be converted into
Piltel notes. One Piltel note will be exchanged for one
PLDT preferred stock or convertible note, which is
convertible to PLDT common stock.

The notes, which will not have voting rights, will bear an
interest of 1%, payable annually. Creditor banks may
convert their notes into common shares within a seven-year
period. The shares will have a conversion price of PhP1,700
per share, or 50% above the average market price of the
PLDT common shares, whichever is higher.  Tranche B or 25%
of the cellular company's obligations to banks will have a
10-year repayment term and a "concessionary" interest rate
of 1% plus the 91-day Treasury bill rate, the benchmark by
which banks price their loans for peso denominated loans,
and 1% plus the three-month London Interbank Rate (LIBOR)
for dollar denominated loans.

Tranche C or the remaining 25% will have a 15-year
repayment term with a similar interest rate. Payment of
interest will be on a semi-annual basis, and there will be
a four-year grace period on principal payments.  Asked how
Piltel will be able to repay its debts after restructuring,
investor relations manager Deborah Anne N. Tan said the MoU
is only a first step of the actual restructuring and the
company will still have to strengthen its operational
capabilities.

"Of course we still have to work on that ... but once debt
restructuring is in place, it means more favorable terms
(for the company)," Ms. Tan told BusinessWorld in a
telephone interview. She added debt restructuring will also
ease Piltel's cash flow and assist the implementation of
its recovery programs.

Earlier, the Piltel management drafted business recovery
plans focused on five areas of the company's operations:
organizational structure; billing and collection
procedures; information technology; marketing and customer
service; and network infrastructure.  Ms. Tan also said
capital infusion from PLDT will come in after the
completion of its debt restructuring. Earlier, Mr.
Pangilinan said strategic foreign investor, Nippon
Telegraph and Telephone Corp. wants PLDT to infuse only up
to $100 million into Piltel. The amount is higher than
PLDT's earlier pledge of PhP2 million (US$50,000).

The Piltel official said the company expects to complete
debt restructuring by January 31, 2000. This, despite
telecommunications industry analysts' doubts on Piltel's
viability.

Anscor Hagedorn Securities, Inc. senior telecommunications
analyst Russel Ong said although debt restructuring will
allow some room for Piltel to implement programs without
having its creditors bother them for a time, it still puts
to question how the company will repay its PhP34.9-billion
debt. "It still does not address the question on how Piltel
will pay its debt eventually," Mr. Ong said.

"(Debt restructuring) will address Piltel's problem on the
short-term, beyond that, it is already a question of
viability," he added.

This was shared by ATR-Kim Eng Securities, Inc. assistant
vice-president and deputy head for research Richard R. Tan,
saying Piltel's prospects are still bleak especially
without recapitalization.

"Piltel will have to work on the marketing aspect ... with
consumer preference for GSM (global system for mobile
communications technology) and 'texting' for mobile phone
services," said Mr. Tan. He added that while debt
restructuring will alleviate Piltel's financial position,
it still has to work on the marketing side to bring in
revenues and strengthen its cash flow.

Sources said the "minimum requirements" for the approval of
the proposed loan restructuring of Piltel are the
indicative terms and conditions, and the Letter of Support,
which should be "acceptable to the lenders and duly
executed by PLDT (Philippine Long Distance Telephone Co.)."
PLDT has 50.1% holdings in the cellular firm.  The PLDT
Letter of Support will be signed when the restructuring
terms are finalized, the sources said.

Meanwhile, the remaining 50% owed to creditor banks,
including US Eximbank, will be divided in two tranches.  
The loans will be secured by Piltel's "existing and future
assets." Dollar lenders will have the option to
redenominate the obligation to local currency.  (Business
World  11-Oct-1999)

VICTORIAS MILLING CO.: Bank obects to SEC re rehab plan
-------------------------------------------------------
Dao Heng Bank reiterated recently that the rehabilitation
plan of Victorias Milling Co., Inc. (VMC) was approved
prematurely by the Securities and Exchange Commission (SEC)
and should be reconsidered.  This, when the corporate
watchdog deliberated on the plan for over two years.

In a motion filed with the SEC, Dao Heng again pointed out
that the SEC approved the plan without first resolving
VMC's liabilities on the refined sugar delivery orders
(RSDO), the sugar receipts used by the firm's marketing arm
as a collateral for some of its loans. Dao Heng also asked
the Commission to junk the plea of VMC's management
committee to dismiss the bank's pending appeal to defer the
implementation of the firm's rehabilitation plan, while
there are pending deliberations on the RSDO claims.

Not until the matter of RSDO claims has been resolved
should the SEC act upon the rehab plan, the bank said. On
its part, VMC said the RSDO claims should not be made part
of the firm's rehabilitation. The cash-strapped sugar
miller also said "claimants' statement that RSDOs are
direct, valid and subsisting obligations of VMC is
unsubstantiated and has not legal leg to stand on.

"VMC said the RSDO is premised upon a loan contracted by
VMC subsidiary North Negros Marketing Corp. (Nonemarco) and
not VMC itself, making RSDO claims "hollow and empty."
(Business World  11-Oct-1999)


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

THAI PETROCHEMICAL INDUSTRY: To pay $3.5 billion for advice
-----------------------------------------------------------  
Thai Petrochemical Industry Plc will pay almost one billion
baht for advice and planning on how to restructure its
debts, which are the largest of any company in Thailand at
around US$3.5 billion (140 billion baht).

Company sources say three groups will be paid:
PricewaterhouseCoopers, the independent adviser for
creditors; Chase Manhattan Bank, the creditors' adviser for
the debt restructuring plan; and Johnson Stokes & Master, a
major law firm in Hong Kong, the legal adviser for TPI.

A source close to TPI chairman Prachai Leophairatana
claimed that Mr Prachai had noted that ultimately the
creditors would pay the bill as they would own TPI after
the debt-restructuring programme was completed.  
Wachirapunthu Promprasert, TPI's chief finance officer,
said the fees had to be kept in perspective by comparison
with the size of the company's debt.

A 12-member steering committee representing about 140
creditors is considering the restructuring plan. Signing of
the schedule has been delayed for almost eight months
already while some points are finalised. The programme can
go ahead once creditors owed at least 75% of the total debt
give their approval. Negotiations started 20 months ago and
agreement should be reached soon, sources close to the
talks say.

Mr Wachirapunthu said the final documents were likely to be
completed this month, with creditor approval sought later
this year.  Under the draft, creditors will be asked to
accept an 11% loss on their total investment. TPI will
increase its capital by $1 billion while the creditors
accept a "haircut" on interest of 500 million. Creditors
will also accept shares in TPI in lieu of payment of part
of the debt.

The moves will reduce TPI's debt to $1.5 billion (60
billion baht), an amount it can service.  TPI forecasts
sales worth 50 billion baht this year, up from 46 billion
baht in 1996, the last year before the economic crisis. The
company has appointed Merrill Lynch Phatra securities and
JF Thanakom securities as advisers for the capital
increase.

Mr Wachirapunthu denied that the International Finance
Corporation, a major creditor of TPI and an affiliate of
the World Bank, had objected to the scheme because it could
not accept a loss.  He also denied that some creditors
might sue the company, forcing it into bankruptcy.

The creditors' steering committee, in which IFC is
represented, had agreed in principle to the plan, he said.
It was now only a matter of finalising details, some of
which are currently under discussion.  The TPI deal is very
complicated since, apart from the large number of creditors
involved, it entails debt restructuring of all companies in
the group, across a range of industries.  Shares of TPI on
the Stock Exchange of Thailand closed at 16.5 baht on
Friday, unchanged from Thursday, on trade worth 41.08
million baht. In the past year, the shares have traded
between 28.5 baht and 4.3 baht.  (Bangkok Post  11-Oct-
1999)


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