TCRAP_Public/991018.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 18, 1999, Vol. 2, No. 202


* C H I N A  &  H O N G  K O N G *

AIM-TRADE DEVELOPMENT: Facing petition for winding up
CELIA LEATHER GOODS FACTORY: Facing petition for winding up
CHINA LORD INT'L: Facing petition for winding up       
CHINA YINHONG INT'L FINANCE: Facing petition for winding up
DUOXI PRODUCTS: Foreign company sold for debt non-payment
JUSCO STORES: Posts six-month loss
TAK WING INVESTMENT: Restructure involves portfolio trim
THE WELY ASSOCIATE INVESTMENTS: Facing winding up petition
UNION PRECISION TECHNOLOGIES: Facing winding up petition

* I N D O N E S I A *

PDAM JAYA: French bank to take over one of its debt

* J A P A N *

CREDIT SUISSE GROUP: Police raid Tokyo branch

* K O R E A *

DAEWOO GROUP: FSC to qualifiedly lift bond redemption rules
DAEWOO GROUP: FTC uncovers method of subsidiary funding
DAEWOO MOTORS: GM confirms interest in acquisition
DAEWOO MOTORS: GM talks include Ssangyong Motor Co.
DAEWOO MOTORS: Gov't rules out Samsung takeover
KANGWON INDUSTRIES: Strikes deal with creditors group
SAMSUNG MOTORS: To get 3-month reopening period

* M A L A Y S I A *

TELEKOM MALAYSIA: Continuing with restructuring
UNICO HOLDINGS: Management team receives support

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

NATIONAL STEEL CORP.: Loans could be called early
PRIME SAVINGS BANK: Manila Bank gets 1 year to rehab it

* T H A I L A N D *

MANAGER MEDIA GROUP: 2nd round of capitalization okayed
NATIONAL FERTILIZER: Shareholders approve restructuring
POWER-P PLC: Reveals rehab plan details  
THAI FARMERS BANK: Posts 3rd quarter loss
THAI MILITARY BANK: Has difficulty raising capital
THAI OIL CO.: Vote on rehab plan delayed

C H I N A  &  H O N G  K O N G

AIM-TRADE DEVELOPMENT: Facing petition for winding up
The High Court of Hong Kong SAR has scheduled a hearing for
November 17 on the petition of The Hongkong and Shanghai
Banking Corporation Limited for the winding up of Aim-Trade
Development Inc.  A notice of legal appearance must be
filed on or before November 16.

CELIA LEATHER GOODS FACTORY: Facing petition for winding up
The High Court of Hong Kong SAR has scheduled a hearing for
November 3 on the petition of Lee Yuk Mui for the winding
up of Celia Leather Goods Factory Limited.  A notice of
legal appearance must be filed on or before November 2.

CHINA LORD INT'L: Facing petition for winding up
The High Court of Hong Kong SAR has scheduled a hearing for
December 8 on the petition of Chartersince Realty
(International) Limited for the winding up of China Lord
International Limited.  A notice of legal appearance must
be filed on or before December 7.

CHINA YINHONG INT'L FINANCE: Facing petition for winding up
The High Court of Hong Kong SAR has scheduled a hearing for
December 1 on the petition of Canadian Eastern Finance
Limited for the winding up of China Yinhong International
Finance Company Limited.  A notice of legal appearance must
be filed on or before November 30.

DUOXI PRODUCTS: Foreign company sold for debt non-payment  
For the first time, a foreign-invested company that could
not pay its debts has been sold.  A Chinese buyer paid 41
million yuan (about HK$38.13 million) in the Beijing
Economic and Technology Development zone for Duoxi Products
(Beijing), a wholly-owned Japanese company.

The auction was held at the request of the city's Number
One Middle Court which sealed the building at the end of
last year after creditor banks applied to the court for
repayment.  Duoxi's assets were valued at 77.16 million
yuan. However, bidding began at 30 million yuan, the Legal
Daily reported yesterday.  It did not identify the buyer.

Lu Yimin, general manager of the auction firm, said
domestic and foreign companies were treated equally if they
were unable to pay their debts and that banks would be able
to recover part of their debts.  There were few details
about the Japanese firm. The Japanese Commercial and
Industrial Association in Beijing said that Duoxi was not
one of its members and the embassy had no information about
it.  A spokesman for the zone said it was pleased with the
result of the auction.

"When the company bought the land, it is their business to
do what they want. If business is good, they will pay more
tax to us and the government. If it is bad, our income will
be affected."  (South China Morning Post  15-Oct-1999)

JUSCO STORES: Posts six-month loss
A weakening retail operating environment and cautious
consumer spending sentiment has led Jusco Stores (Hong
Kong) Co to continue operating in the red, with a net loss
of $17.58 million posted for the six months to 31 August

The losses are, however, 9 per cent lower than its previous
net loss of $19.29 million in the same period last year.
Jusco managing director Sozaburo Yamazaki said turnover at
the eight local retail shops continued to grow, rising by
18.1 per cent to $1.5 billion during the period under

"And our Guangzhou sector turned around from a loss to a
profit of $6 million due to the grand opening of
underground train in the city," he added.

The improvement in turnover helped to scale down the
group's net loss by 8.8 per cent.  But the growth was
unable to combat the pressure imposed by the retail price
war and the high rental cost, he noted.   Jusco also
reported a 6.76 cents in loss per share during the period.
The value of sales in retail sector and department stores
declined by 10.9 per cent and 17.3 per cent, respectively,
for the first six months of 1999, according to government

"We expect the fierce price war initiated by our
competitors in July will delay the retail sector from
recovering," Mr Yamazaki said.  "It also adds uncertainty
for Jusco to turnaround," Jusco accounts & finance director
Arnold Wong said.

Mr Wong also said the negative impact posed by the
supermarket price war is evident in the group's food sales
performance during the interim period.

"Food which accounted for 28 per cent, the biggest share of
our total turnover, dropped 16 per cent during the interim
period," he said.  "In view of the price war and the
delayed pick up of the retail market, we will focus on
investing in the profitable GMS market in Guangzhou and to
scale down our rental expenses," Mr Yamazaki said.

Mr Wong said Jusco will invest 45 million yuan (HK$42
million) in another Guangzhou chain which will be opened in
mid-2000 at China Plaza.  The Plaza is located at the
podium level of the underground train station in Guangzhou.
The investment will be paid partly by cash and partly
through financing.  The group will continue to minimise
rental cost by negotiating with landlords.

"We wish to alleviate our rental expenses to turnover
ratio," he added.

TAK WING INVESTMENT: Restructure involves portfolio trim   
Property firm Tak Wing Investment (Holdings) plans to
continue reducing its property-investment portfolio.  
Managing director Tony Tong Nai-kan said yesterday the
company would sell three residential properties in Ho Man
Tin, Hong Kong Island and Lantau Island.  Tak Wing sold two
commercial properties in August.

Mr Tong said the poor response at Thursday's government
land auction reflected a trend among developers to sell
properties rather than bid on projects.  As a result of
this trend, "we don't expect a recovery until the middle of
next year," he said.

Tak Wing has a property portfolio worth about $60 million.
The company had been undergoing a restructuring, from which
a capital reduction could take place by the end of the year
and result in an issue of convertible bonds worth up to $55
million, Mr Tong said.  (South China Morning Post  16-Oct-

THE WELY ASSOCIATE INVESTMENTS: Facing winding up petition
The High Court of Hong Kong SAR has scheduled a hearing for
November 10 on the petition of The Industrial and
Commercial Bank of China for the winding up of the Wely
Associate Investments Limited. A notice of legal appearance
must be filed on or before November 9.

UNION PRECISION TECHNOLOGIES: Facing winding up petition
The High Court of Hong Kong SAR has scheduled a hearing for
November 24 on the petition of Ng Chi Sang for the winding
up of Union Precision Technologies Limited. A notice of
legal appearance must be filed on or before November 23.


PDAM JAYA: French bank to take over one of its debt
Lyonnaise Des Eaux from France has said it was ready to
take over a debt of Rp1.6 trillion ($ US0.2 billion) of the
state-owned drinking water supply company, PDAM Jaya, in
exchange of a contract to handle the clean water supply
project for the western part of Jakarta for 25 years.

Bernard Lafrogne, a commissioner of PT Pam Lyonnaise Jaya
(Palyja), which is owned by Lyonnais, said on Wednesday
that the debt was a loan from the World Bank and OECF
through the Finance Ministry.  Bernard said before its
privatization, PDAM Jaya, which is owned by the city
government, received a loan of Rp1.2 trillion to finance
the clean water project. The amount swelled with interest
to Rp1.6 trillion now.

"The repayment of the debt is part of the commitment under
a cooperation agreement between Lyonnaise Des Eaux and PDAM
Jaya," he said.  (Asia Pulse  14-Oct-1999)


CREDIT SUISSE GROUP: Police raid Tokyo branch
Japanese police raided the Tokyo branch of Credit
Suisse Financial Products (CSFP), a unit of Credit Suisse
Group, on Thursday on suspicion it obstructed an earlier
inspection by Japanese financial regulators.

It was the first time in memory that Japanese police had
raided a foreign bank for suspected criminal activity. A
Reuters Television reporter witnessed 20 to 30 police
investigators entering the bank's branch office in central
Tokyo on Thursday morning. Police declined to comment on
details of the investigation.

CSFP's Tokyo branch is suspected of instructing employees
to shred transaction documents and erase e-mail records
when an industry watchdog, the Financial Supervisory Agency
(FSA), inspected it in January.  Financial regulators said
in late July they would revoke the banking licence of CSFP
for obstructing investigations and offering inappropriate
products to clients.

The FSA said at the time that it intended to file criminal
charges against the branch.  The CS Group said it regretted
Thursday's raid because it had fully cooperated with
Japanese authorities over the issue.  A Credit Suisse
spokesman said in Tokyo that while some employees had taken
it into their own hands to shred documents thinking they
were covering up potential fire-wall violations, the
company had not been involved on an organisational basis.

Credit Suisse had informed Japanese financial regulators of
its employees actions, commissioned a report into the
incident, made a public apology to Japan and the FSA in May
and CSFP had lost its licence, he added.

"All of that combined makes us wonder why they continue to
pursue this," he said.  "We were not lily-white and we are
not saying that we were. This event occurred and we took as
much remedial action as we thought was necessary."

Financial regulators said in late July they would revoke
the banking licence of CSFP for obstructing investigations
and offering inappropriate products to clients.  The FSA
had been looking into whether CS Group firms in Tokyo
engaged in any inappropriate transactions to help clients
conceal losses by bouncing them from one account to
another, possibly using derivatives transactions. (Reuters,
NewsHound  14-Oct-1999)


DAEWOO GROUP: FSC to qualifiedly lift bond redemption rules
Financial Supervisory Commission Chairman Lee Hun-jai said
yesterday that the restriction on financial institutions
from redeeming Daewoo bonds will be lifted for thrift
institutions and credit unions that are mostly used by low
income-bracket people.

Lee told a parliamentary session that the commission will
allow the two types of financial institutions to cash out
their Daewoo bonds within this month. The redemption rule
to be applied to them will be the same as that used for
individual investors and non-financial firms, that is, 50
percent by Nov. 11, 80 percent by Feb. 11 and 95 percent
after Feb. 12.

Lee said thrift institutions hold a total of 949.8 billion
won worth of Daewoo bonds, while credit unions hold 437.9
billion won.  Under the redemption control, these small-
sized financial institutions have been experiencing severe
fund squeezes which limited their provision of loans to low
income-bracket customers.  (Korea Herald  16-Oct-1999)

DAEWOO GROUP: FTC uncovers method of subsidiary funding
There seems to be no limit to the chaebol groups' ability
to bypass the law in order to provide illegal support to
weak units. The Fair Trade Commission said yesterday that
it has detected an innovative way of intra-group funding.
The latest case involves Daewoo Corp. and Daewoo Heavy

Daewoo Corp. sold dollars to its sister firm below market
prices through the Seoul branch offices of two foreign
banks, Standard Chartered PLC of the United Kingdom and ABN
Amro Holding of the Netherlands.  According to the
commission, the trading company sold $192 million to its
sister firm at a price 20 won lower than the going won-
dollar rate through 202 transactions between May 1998 and
February this year. Using the same method, it sold another
$22 million through 21 transactions between March and April
this year.

Daewoo Heavy Industries gained 5.2 billion won from the
foreign exchange transactions.  Judging the deals to be a
form of illegal intra-group funding, the commission imposed
1.37 billion won in fines on Daewoo Corp.  However, the
commission said it doesn't plan to punish the banks, saying
that the transactions were made under contracts signed
between the two companies.  (Korea Herald  16-Oct-1999)

DAEWOO MOTORS: GM confirms interest in acquisition
US automaker GM has confirmed that it is interested in
taking over Daewoo Motors' factories in Korea and Eastern
Europe in a Purchase & Assumption (P&A) deal.

An official at Korea Development Bank, a major credit bank
for Daewoo Motors revealed that GM's Chief Vice President
Lou HughesX and CEOs visited KDB last week, expressed their
intent to actively pursue a P&A of Dae Woo Motors. However,
the official stated that it would be impossible for
creditors to sell off the company by factory. Negotiations
with GM have not gone smoothly as the Daewoo Group wants to
maintain its management rights.

An investigative report on Daewoo Electronics, Daewoo Heavy
Industries, Daewoo Motors, and Daewoo Corp. is scheduled
for release at the end of this month. KDB and other Daewoo
creditor banks such as Hanvit, will draft a comprehensive
workout plan following the release of the report.  (Digital
ChosunIlbo  17-Oct-1999)

DAEWOO MOTORS: GM talks include Ssangyong Motor Co.
General Motors Corp and South Korea's Daewoo Motor Co said
on Thursday their talks over a stake in Daewoo Motor
included its sister firm Ssangyong Motor Co.  Daewoo
Motor's chief spokesman Kim Jong-do also said his company
expected to conclude negotiations with GM before the end of
this year.

"Ssangyong Motor has been included in our talks with GM
from the beginning," said Kim. "GM confirmed this today in
a meeting between our top management and a group of GM

GM spokesman Lee Ki-sup concurred, saying: "Yes, definitely
our talks include Ssangyong Motor."

Earlier on Thursday, Lee had said GM was not interested at
the moment in discussing the purchase of Ssangyong or
Samsung Motors.

"There seems to have been some misunderstanding," Lee said
later. "We were confused between Ssangyong Motor and
Daewoo's commercial vehicle division."

On Wednesday, GM's Lee said GM was not ruling out the
possibility of buying Ssangyong and Samsung but that its
priority was discussing the possible acquisition of Daewoo
Motor.  But GM toned down its enthusiasm for Samsung
Motors, a unit of Samsung Group, on Thursday in what
analysts said appeared to be an attempt to regain a
negotiating initiative.

"When we said we were open to all possibilities, we meant
in reference to Daewoo Motor Co," GM's Lee said. "At this
point in time, we are focusing 100 percent of our effort on
Daewoo Motor. When the Daewoo issue is completely resolved,
then we could discuss the possibility of other issues, but,
for now, we are not considering any contact with Samsung."

Analysts said GM was obscuring its position after the South
Korean government tried to raise the stakes and take
advantage of GM's interest in Daewoo Motor.

"What we are seeing is a tug-of-war between GM and the
South Korean government," said Richard Pyo, analyst at
Credit Suisse First Boston. "This time, GM may feel its
show of interest has made its negotiating partner a
little bolder."

Lee Hun-jai, head of the Financial Supervisory Commission,
said on Wednesday that creditors of Daewoo Motor could swap
the ailing firm's debt for equity, a move that would
prevent its sale at a bargain price. GM's expression of
interest in the two other firms and reiteration of its
interest in Daewoo was a sweetener. The U.S. firm aimed to
discourage any attempt to sell Daewoo Motor to another firm
by offering to take the other less desirable companies as
well, analysts said.

They said GM could expand easily into the Asian markets as
well as some parts of Eastern Europe by taking over Daewoo
Motor, which had a one million unit capacity domestically
and a 300,000 unit capacity in Poland.  A group of GM
officials, led by Louis Hughes, executive vice president of
GM Corp's new business strategies division, arrived in
South Korea on Tuesday for GM's ongoing assessment of the
company and to talk with Daewoo officials. They are
expected to stay until the weekend.

Daewoo Motor and Ssangyong are units of the debt-laden
Daewoo Group which is being dismembered by its mostly
state-run creditor banks.  GM and Daewoo Motor have been in
prolonged talks on a strategic alliance or a stake sale.
They signed a memorandum of understanding in August to step
up the momentum of the talks but so far there has been no
concrete progress. (Reuters, NewsHound  14-Oct-1999)

DAEWOO MOTORS: Gov't rules out Samsung takeover
The Seoul government does not view a Samsung Group takeover
of Daewoo Motor Co. as a possibility, according to
documents the Ministry of Commerce, Industry and Energy
submitted to the National Assembly.

"There appears to be no possibility that Samsung will
acquire Daewoo and Ssangyong motors, since Samsung Motors
has filed for court management and a creditor-led sell-off
is under way," the ministry said in its report submitted to
Rep. Kim Kyung-jae of the ruling National Congress for New

The lawmaker said the ministry filed the report in response
to his request for an official stance on the disposal of
Daewoo and Ssangyong motors and the prospect of Samsung
acquiring the two carmakers.

"There are many rumors circulating regarding the overall
restructuring of the auto industry," Kim said.  However,
the lawmaker added: "But a reverse of the Big Deal between
Samsung and Daewoo Motor must be considered, since there is
a high possibility of Samsung Motors being revived, if
Samsung's capital and sales network are combined with
Daewoo's experience and technology."

Collapsing under debts of more than 4 trillion won, Samsung
Motors applied for court receivership in June this year,
pledging Group Chairman Lee Kun-hee's 3.5 million shares in
Samsung Life Insurance as collateral for 2.8 trillion won
in debts to creditor banks.  (Korea Herald  16-Oct-1999)

KANGWON INDUSTRIES: Strikes deal with creditors group
A creditor group of 38 financial institutions for Kangwon
Industries held at a meeting Friday resolved to write off a
portion of its total loans to Kangwon Industries and to
convert another W250 billion in loans into the firm's

Meanwhile, the Inchon Iron & Steel subsidiary of Hyundai
business group is in the process of merging with Kangwon
Industries, another Hyundai unit, under the group's workout
program. Hyundai announced Friday that it will spin off its
Inchon Iron & Steel before year's end, as soon as the
merger deal is concluded. The nation's top business group
said that the consolidated company will be equipped to
process 7.89 million tons of steel, ranking it among the
top two steel processors in the world. (Digital ChosunIlbo  

SAMSUNG MOTORS: To get 3-month reopening period
Creditors of Samsung Motors have allowed the court-
administered automaker to operate its plant in Pusan for
three months from Oct. 25 by injecting 20 billion won in
new loans.

The decision was aimed to allow the automaker's parts
suppliers to use up their existing stock. Samsung will
clear the inventories by manufacturing 6,000 SM5 passenger
vehicles during the given three-month period.  Yoo Han-jo,
a director of Hanvit Bank, Samsung Motors' main creditor,
said that the proceeds from the sales of these cars will be
used for repaying debts.

Pusan city promised to support sales of the new vehicles,
but creditors doubt they will all be sold.  Yoo said
creditors are not likely to extend additional loans to
operate the factory after the given three months unless
they are assured of full payment of future loans as well.
Creditors also hope to sell the Pusan factory while it is
in operation.

Creditors decided to step forward and take over the
initiative from the Samsung Group in promoting the plant's
sale to foreign investors. They will sign a contract next
week with two foreign consulting firms authorizing them to
find a buyer.  Industry watchers have speculated that
creditors have France's Renault in mind as a candidate to
purchase the plant, having named France's Paribas Bank as
one of the two negotiating consultants. (Digital ChosunIlbo  
17-Oct-1999, Korea Herald  18-Oct-1999)


TELEKOM MALAYSIA: Continuing with restructuring
Telekom Malaysia Bhd will continue to restructure its
network as part of its ongoing efforts to reduce overall
cost, its chief executive Datuk Mohamad Said Mohamed Ali

Said, in his presentation at an investors' conference
organised by HSBC Research (M) Sdn Bhd in Kuala Lumpur
yesterday, said that this would be one of the key
strategies to be implemented by Telekom to maintain its
competitive edge.  In addition, Telekom would continue to
carry out aggressive marketing initiatives, tariff
rebalancing efforts as well as enhancing its network

To access new funds and technical and management expertise,
Said said Telekom would also continue to enhance its
foreign strategic alliances with similar players around the
globe.   This year, offshore investments contributed
RM123mil to the group's income compared with RM146mil
previously. Telekom South Africa was the largest
contributor with RM70mil (1998: RM172mil); while India and
Sri Lanka contributed RM1mil and RM2mil respectively.

According to Said, the bulk of the group's future revenue
was expected to come from multimedia which consisted of
only 1% of Telekom's total turnover.  Multimedia's
contribution, he added, could jump to as high as 30% of
turnover in the future.  (Star Online  15-Oct-1999)

UNICO HOLDINGS: Management team receives support
In the latest turn of events in the Unico Holdings Bhd
(UHB) saga, the board of directors has expressed firm
support for chairman Datuk Lim Guan Teik and managing
director Tan Sri Ngan Ching Wen, despite claims of unfair
treatment by some disgruntled shareholders in relation to
the company's restructuring exercises.

"We have done everything above board and in accordance with
guidelines issued by the Securities Commission (SC) in
relation to our proposed restructuring and listing plans
for our subsidiary Unico-Desa Plantations Bhd (UDPB)," Lim
told Star Business in Kuala Lumpur yesterday.

Lim explained that earlier claims by shareholder Koh King
Kee and some others that UHB was not treating the majority
of its shareholders fairly were inaccurate, and had been
reported out of context by some media.

"Some of the media headlines we have seen over this matter
are inappropriate ... one even mentioned that UHB has
failed miserably. Is that how you describe a company which
reported a pre-tax profit of RM46.8mil to March this year
when several other companies were reporting losses?" he

On Sept 22, more than 400 UHB shareholders had walked out
of an EGM held to approve a proposal for UDPB to issue 1.5
million new ordinary shares at RM1.50 per share to UHB's 17
directors, which would entitle them to a bonus issue of an
additional 1.35 million shares.  Lim said that the
shareholders who walked out of the EGM represented less
than 1% of the company's voting power, based on their
existing shareholdings.

"Four hundred people may seem a lot, but UHB has more than
24,000 shareholders spread out all over the country," said

Those shareholders' main bone of contention was that the
bonus issue effectively meant that UHB directors would pay
64 sen for each UDPB share, while shareholders would have
to pay RM1.50 under the latter's listing exercise targeted
for year-end.  Lim said the 1.35 million UDPB bonus shares
issued to UHB directors reresented only a fraction of the
51 million-plus bonus shares to be issued under the

"More than 47 million bonus shares will be taken up by UHB
and about 2 million will go to UDPB employees," he said.

UHB's shareholding structure is unique in that its 17
directors own only about 5.2% of its total share capital,
with the balance held by the 24,000-odd shareholders.
UHB had earlier said the bonus share allocation was
intended to partly compensate directors for their years of
service as there were periods when directors were not paid
any fees.

In addition, UHB's 17 directors have collectively agreed to
donate half of their bonus share entitlement to the
Associated Chinese Chamber of Commerce and Industries and
the balance to 60 Chinese independent schools in the
country.  (Star Online  15-Oct-1999)


NATIONAL STEEL CORP.: Loans could be called early
Prospects for cash-strapped National Steel Corp. (NSC) look
bleaker as holders of the steel firm's long-term commercial
paper (LTCP) issuances are now considering calling in their
loans earlier than the maturity date.

An industry source said during a recent meeting, initiated
by agent Investment Capital Corp. of the Philippines (ICCP)
and NSC trustee Far East Bank and Trust Co. (FEBTC), LTCP
holders were asked whether they favor an acceleration of
payment and declare NSC in default.  While other holders
have yet to secure management approval, some holders have
already expressed no objection on the move, the source
added. NSC has 862 million Philippine pesos (PhP) in LTCPs.
The first tranche, which comprised of PhP420 million in
LTCPs, will fall due on December 16. The debt paper was
issued on December 23, 1994.

Institutions which availed of the debt paper issuance are
Security Bank, Solidbank Corp., Rizal Commercial Banking
Corp. (RCBC), Philippine Banking Corp. and Land Bank of the
Philippines.   NSC's PhP260-million LTCP under Series 12 of
the second tranche will mature on July 6, 2000. Creditors
include FEB Investments, Inc., Development Bank of the
Philippines (DBP), AB Capital, PCI Capital, RCBC Capital,
International Capital Corp., Filinvest Capital and Security
Bank Corp. The LTCP was issued on July 12, 1995.

The PhP182-million LTCP second issuance matured on July 8.
It was issued on July 12, 1995.  NSC was able to pay only
the accrued interest and 20% of the second issuance,
originally PhP227.5 million. Holders extended the maturity
for the unpaid PhP182 million by 151 days, another source
said earlier.  Holders include FEB Investments, Inc., DBP,
AB Capital and Investment Corp., PCI Capital Corp., RCBC
Capital Corp., International Capital Corp., Filinvest
Capital, Inc. and Security Bank.

Retained as chairman and secretary of LTCP holders were
FEBTC and FEB Investments, Inc., respectively.  Meanwhile,
the source said talks with Duferco S.A. of Switzerland and
Ispat International, N.V. are still "ongoing."  However,
the possibility that talks will move forward with either
the prospective investors will depend if NSC agent ICCP
gets an authorization from the four Malaysian banks to
negotiate with the creditors.  The four Malaysian banks
earlier provided loans which were used to enable Hottick
Investment Ltd. to buy Wing Tiek Holdings' majority shares
in NSC.

NSC is majority owned by Hong Kong-based Hottick
Investments Ltd. which has 82.5% stake. The government,
through National Development Co., has a 12.5% stake while
the remaining 5% is held by Marubeni Corp. of Japan.  
(Business World  15-Oct-1999)

PRIME SAVINGS BANK: Manila Bank gets 1 year to rehab it
The Philippine Deposit Insurance Corp. gave Manila Bank
yesterday one year to merge or consolidate its resources
with the financially-stricken Prime Savings Bank under a
rehabilitation plan drafted to strengthen the latter.

In an interview, PDIC president Ernest Leung said the
merger was one of the conditions imposed jointly by the
Banko Sentral ng Pilipinas in exchange for combined
financial assistance of P2.161 billion to enable Prime Bank
to reopen.

"Our condition requires that they merge into one within a
year. The Bangko Sentral wanted a merger in six months,"
Leung said.  "Then we are assured there is a strong merged
entity which is the central idea," Leung added.

Manila Bank reopened recently as a thrift bank to enable it
to easily meet the expanded minimum capital imposed on all
banks by the BSP beginning last year up to end-2000. Thrift
banks in Metro Manila, for instance, are required to have
P325 million by the end of 1999 and at least P400 million
by end-2000.

Manila Bank reopened last June after a 12-year hiatus with
assets of P4.5 billion. It generated deposits of P560
million after only a week of operations.  Controlled by the
Puyat family, Manila Bank recently acquired 51 percent of
Omni Savings Bank where it infused an initial P150 million
additional capital.  Against this background, the PDIC drew
a rehabilitation plan for Prime Bank where its owners, the
depositors, the BSP and the PDIC will each absorb some
financial losses to enable the bank to reopen, Leung said.

Of the P2.19 billion bad loans incurred by Prime Bank, a
total P1.7 billion was stricken off its books or "taken
out" so that the bank can operate again on a clean slate,
he said.  Leung said the agreement requires the additional
take out of another P400 million should more bad loans are
uncovered under a due diligence audit presently being
undertaken to determine the bank's true financial standing,
Leung said.

The agreement also provides for a "sharing in the recovery"
of bad loans should these be undertaken successfully in the
future, he said.  Leung did not disclose what the agreement
meant to Prime Bank's depositors but said there is a limit
as to the amount of deposits that may be withdrawn. The
proposal requires depositors to lock in their money in the
merged banks for the next five years for which they will be
paid two percent interest.

The cap on withdrawal covers the insured portion of the
deposits, Leung said.  At the time Prime Bank declared a
holiday last June 4, it had deposits of some P4.3 billion
of which only P1 billion was insured.  (Manila Times  16-


MANAGER MEDIA GROUP: 2nd round of capitalization okayed
Manager Media Group Plc said a creditor committee had
approved the company's second round of capital increase
with the issuance of 60 million new common shares to
existing shareholders and the general public at Bt3 each.

The second-round capitalisation is in the context of the
rehabilitation plan that reduces the par value of common
shares from Bt10 to Bt1 apiece.  The committee of MGR's
creditors endorsed the capital rise at a meeting on Oct 8,
this year.

Under the plan, this round of capitalisation will be
completed within 30 days and the allocation of the shares
would be under the supervisison of Sondhi Limthongkul.
The committee also unanimously resolved to convert the debt
of Direct Marketing Service Plce, the marketing arm of
Manager Media Group, into equity holding.

As a result, Manager's stake at Direct Marketing Services
would rise from Bt60 million to Bt68 million, accounting
for 48.57 per cent of the company's total equity. The move
is in line with the group's rehabilitation plan.  (The
Nation  15-Oct-1999)

NATIONAL FERTILIZER: Shareholders approve restructuring
National Fertilizer (NFC) shareholders yesterday approved
the company's plan to restructure debts with its four major
creditors, involving loans amounting to a total of 11,000
million baht, according to NFC Executive Chairman Kamolchai

Kamolchai said after the meeting of NFC shareholders that
the initiation of debt settlement with four financial
institutions namely: Siam City Bank, Thai Commercial Bank,
Krung Thai Bank, and the Industrial Financial Corporation
of Thailand (IFCT), will help the company to lower debt
burden by 5,000 million baht.  The debt restructuring
agreement between NFC and the major creditor financial
constitutions will be signed on October 27,1999.

Under the settlement program, NFC will raise an additional
capital of 3,000 million baht, and a swap of 2,100 million
baht. Debt repayment installation will start in June 2001,
after 18 months of grace period, until 2006.  NFC is
expected to pay an MLR-2% interest rate, instead of MLR+1%.
After the debt restructuring, it is anticipated that NFC
debt-to-equity will be 0.75:1, which is hoped to improve
the company's liquidity.

This will enable the company to enhance its fertilizer
production capacity to 800,000 tons next year, as against
the original target of 1,000,000 tons set before the
financial crisis.  (Business Day  15-Oct-1999)

POWER-P PLC: Reveals rehab plan details  
Power-P Plc has provided further details on its debt
restructuring plan involving a total of Bt1.09 billion,
saying that the total repayment period would be extended to
2017.  The company's creditors have also fixed interest
rates on the loan repayments -- 4.25 per cent for 1999,
4.75 per cent for 2000, 5.25 per cent for 2001, 6.50 per
cent for 2002, 10.75 per cent for 2004 and the MLR of Siam
Commercial Bank for years thereafter.  (The Nation  15-Oct-

THAI FARMERS BANK: Posts 3rd quarter loss
Thai Farmers Bank, the country's third largest commercial
bank, has said it lost 9.4B baht in the third quarter,
about half of its loss in the same period a year earlier,
because it set aside fewer provisions for defaults.  Thai
Farmers lost 9.4B baht, or 8.01 baht a share, against 19.4B
baht and 16.53 baht a share in the previous corresponding
quarter.  The bank said it set aside 7.8B baht of
provisions for bad and delinquent loans in the period,
against 12.2B baht of income.  The bank also wrote off 1.5B
baht because of the insolvency of its largest finance unit,
Phatra Thanakit.

THAI MILITARY BANK: Has difficulty raising capital
Thai Military Bank yesterday abruptly postponed a plan to
raise 30 billion baht in new capital after failing to
attract satisfactory interest from foreign investors.

The announcement was followed by a bearish report, also
issued yesterday, by credit agency Standard and Poor's,
which said Thai banks needed to raise up to 863.5 billion
baht in new capital to cover bad loans. Montri
Visoldilokpun, first executive vice-president of Thai
Military Bank, said "volatility in the world capital
market" had a negative impact on the offering, resulting in
prices below the bank's original target.

"Therefore, the bank has resolved to postpone the offering
and wait until the market has improved."

Sources said that while local investors were willing to pay
about 13 baht per share, foreign investors had bid only
about 11 baht.  Thai Military Bank planned to raise 30
billion baht in new capital through the issue of two
billion new preferred shares.  Some 15 billion baht in
capital was to come from the government's tier-one
financial assistance programme.

The bank planned to sell 70% of the preferred shares
allocated to foreign institutional investors, with the
remainder to local firms.  The bank abruptly cancelled
plans to sign a contract with the Finance Ministry after
results of the bookbuilding exercise overseas was known.
Supachai Pisitvanich, finance permanent secretary, said
executives and officials yesterday held two pre-dawn
conference calls to discuss progress on the deal.

Bank executives announced later in the morning that they
were calling off the recapitalisation plan.  Directors plan
to meet on Monday to discuss alternatives. Shares of Thai
Military Bank fell sharply in the morning on news of the
delay, and were suspended briefly by the Stock Exchange of
Thailand pending an official clarification.  Shares on the
Stock Exchange of Thailand ended at 12.25 baht, down 75
satang, on turnover worth 237.5 million baht.

A Thai Military Bank executive said one reserve plan would
have the bank apply for nine billion baht raised from a
capital securities issue earlier this year to satisfy terms
of the state assistance programme.  Under the tier-one
scheme, applicants must first make full provisions for bad
loans.  The state will then match investors in injecting
new capital into the bank.

Thai Military Bank at the end of June had made provisions
of 17 billion baht, or 63.62% of the total required by the
end of next year.  Executives said the bank needed another
9.7 billion baht in capital to meet the provisioning
requirement.  Another possibility was to change the
shareholding structure to allow local investors to purchase
more new shares.

Surayud Chulanont, bank executive chairman and Army chief,
expressed confidence that the recapitalisation could
proceed, but declined to provide details.  A Finance
Ministry official said the bank had presented several plans
to regulators, and remained in a relatively healthy
financial position.

Meanwhile, telecom tycoon Thaksin Shinawatra denied reports
that he was considering purchasing new shares offered by
Thai Military Bank.  He said he had no plans to expand his
business interests or increase his current holding of 10
million shares in the bank.  Dr Thaksin also denied that
the Carlyle Group, a US investment fund that counts former
US president George Bush as an investor, planned to take a
stake in Thai Military Bank.  He said he believed the bank
would be successful in eventually raising new capital.

Another bank executive said recapitalisation could be
delayed until next year, when market conditions are
expected to improve.  "For now, our priority will be to
restructure bad loans and protect our capital base. We
don't have any thought of expanding business at all," the
source said.

Non-performing loans have declined slowly at Thai banks,
despite low interest rates and considerable regulatory
support.  Standard and Poor's yesterday expressed concern
that restructured loans could turn bad again, given the
fragile economy.

"While reported non-performing loans are expected to
decline as a result of aggressive restructuring efforts, it
is not yet clear if such restructuring has been
commercially based and sustainable," said Alison Murray,
director of the financial institutions ratings group at
Standard and Poor's.  "There remains some concern that,
with excess capacity in most sectors of the real economy,
restructured loans will remain vulnerable in the short-to-
medium term and may quickly revert to non-performing

The agency noted that the Bank of Thailand recently said
that up to half of total restructured loans could turn bad
again.  The greatest capital shortfall was at state-owned
banks, Standard and Poor's said, with total needs estimated
at 20% of sector assets.  Capital securities issued by
major banks over the past year were also insufficient to
meet demand.  

Ken McLay, director of Standard & Poor's institutions
ratings group, said: "Recapitalisation of Thailand's
banking system must be effected with common equity, which
has the capacity to absorb losses on an ongoing basis,
rather than hybrid equity. Hybrid equity issued by Thai
banks to date carries a heavy servicing burden, is short
dated, and has limited capacity to absorb losses," he said.
"Recapitalisation is clearly the key sensitivity, but asset
quality is extremely weak, collateral values are
overstated, provisions deficient, and corporate governance
and risk-management systems below international best
practice," said Mr McLay.  "As a result, Thailand's banks
are unlikely to return to profit in the near term."  
(Bangkok Post  15-Oct-1999)

THAI OIL CO.: Vote on rehab plan delayed
Thai Oil Co's US$2.2-billion debt restructuring has hit
another snag as creditor banks refused to vote for the debt
plan which was scheduled today.

Company officials said yesterday that difficulties in
finalising details of the plan was the reason for the delay
in the vote.  Under the proposed plan, the firm's 120
creditors will be forced to accept a writedown of debt and
swap some loans for an equity stake.  This will reduce Thai
Oil's debt-to-equity ratio from 6.0 to 2.8, a manageable
debt weighting.

The Petroleum Authority of Thailand, which holds a 49%
share in Thai Oil, will be asked to take another $250
million stake in the firm-$150 million in cash and the rest
through a debt-for-equity swap.  The company plans to use
new funds to purchase loans back from creditors at a
discount of more than 50% on book value.  The cabinet has
given PTT approval to inject up to $350 million into the

Industry Minister Suwat Liptapallop will leave for Japan
tomorrow to persuade Japanese banks, the largest creditor
group of Thailand's largest oil refiner, to be more lenient
in accepting the debt restructuring plan.  The Japanese
bank group's lending to Thai Oil represents about 40% of
total debt.

One local banker said many Japanese banks had already sold
off their loan claims to other investors at discounts of up
to 70%. As a result, an offer to buyback debt at a discount
of more than 50% should still provide an acceptable profit
to creditors.  Another key point of the restructuring plan
is for all creditors to swap a portion of the loans for

PTT, the core negotiator, is also seeking to roll over the
loans to 12 to 14 years.  Creditor representatives will
take a directors' position at Thai Oil, while other
conditions will require the company to seek shareholders'
approval for future asset sales, mergers or new investment.
One banker said a collapse of the restructuring agreement
would likely force creditors to file bankruptcy against
Thai Oil.

In any case, even with a restructuring agreement, the
company was expected to post losses for the next several
years, given low margins on its refinery operations and
uncertain economic prospects ahead.  (Bangkok Post  15-Oct-

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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