TCRAP_Public/991102.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

            Tuesday, November 2, 1999, Vol. 2, No. 213


* C H I N A  &  H O N G  K O N G *

E-LIFE INTERNATIONAL: Subsid's wind-up petition dismissed
GUANGDONG ENTERPRISES: Debt-for-equity swap to show profit?
QPL INT'L HOLDINGS: Posts massive annual loss
TSE SUI LUEN JEWELLERY: Suffers big loss on property sale

* K O R E A *

DAEWOO GROUP: Debt-for-equity swap in the works
DAEWOO GROUP: Local banks considering debt-to-equity swap
DAEWOO GROUP: Foreign creditors to be allowed role in rehab
DAEWOO GROUP: Chairman, 14 unit presidents resign
DAEWOO ELECTRONIC COMPONENTS: Creditors reveal workout plan
DAEWOO TELECOM: Creditors present workout plan
HYUNDAI GROUP: FTC to investigate spinoff units
LG GROUP: FTC to investigate spinoff units
SAMSUNG GROUP: FTC to investigate spinoff units
SK GROUP: FTC to investigate spinoff units
SSANGYONG MOTOR CO.: Creditors reveal workout plan

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

DAVAO UNION CEMENT: SEC allows offering to reduce debt
EAST ASIA POWER RESOURCES: Rights offering to repay debts
PETRON CORP.: Financial situation delays CapEx approval
UNIWIDE GROUP: Offers suppliers non-subordinate repay plan

* S I N G A P O R E *

URACO HOLDINGS: Posts fiscal year loss - again

* T H A I L A N D *

AR DEVELOPMENT: Ordered to surrender assets
CHINA PROPERTY: Ordered to surrender assets
GOLDEN FUTURE AND CONSTRUCTION: Ordered to surrender assets
KASET THAI SUGAR CO.: Court withdraws rehab order
NIWAT KRACHANGKANTAMAS: Ordered to surrender assets
RUAM PHON INDUSTRY: Court withdraws rehab order
SOMPRASONG GOLDEN PARK & PROP.: Ordered to surrender assets
SOTHANANIWAT: Ordered to surrender assets
SUPOT POONKHAM: Ordered to surrender assets
THAI IDENTITY SUGAR CO.: Court withdraws rehab order
THANACHAT REAL ESTATE & PARTS.: Ordered to surrender assets
WORA ESTATE: Ordered to surrender assets

C H I N A  &  H O N G  K O N G

E-LIFE INTERNATIONAL: Subsid's wind-up petition dismissed
Freight forwarder E-Life International has announced a
wind-up petition against a wholly owned subsidiary has been
dismissed.  The company said the petition against Jet Air
(H) was cancelled after it had agreed to settle the amount
owed to Agnes Yuen Shui Chun.  The settlement was paid by a
fund-raising exercise for $11.8M last week.

GUANGDONG ENTERPRISES: Debt-for-equity swap to show profit?
A potential debt-for-equity swap to partly resolve the
deadlock over restructuring Guangdong Enterprises Holdings
(GDE) could allow banks to derive a one-off paper profit,
according to KPMG.

Partner Eric Tong said the paper-profit would appear in a
situation when a bank had already made provisions against
its GDE exposure and it later received GDE preference
shares as a way to repay the debts.  The accounting firm is
the global co-ordinator of all creditor banks in the GDE

Mr Tong said: "The problem is at present there are no
accounting standards on debt for debt/equity swap."

For example, a bank has a $100 exposure to GDE. It has
already made $40 provision against this exposure. So in the
bank's book its GDE exposure is now $60.  When the bank
finally receives preference shares worth $100 from GDE in
exchange for the debt, it might be able to release the $40
in provisions already made, which can then be booked as a

Mr Tong said the key issue was whether the exchange should
be regarded as a dollar-for-dollar pure swap or as a
transaction comprising a sale of the loan and a purchase of
the preference shares.  A pure swap will generate no profit
or loss and therefore the $40 provision can be released.  
The loan sale and share purchase transaction will call for
a valuation exercise on both the loan and shares involved,
which might create a totally different picture.

Mr Tong said at present the Statements of Standard
Accounting Practice article 17 only allowed the treatment
of exchange of similar items - same line of business at
similar fair value - as pure swaps. For example, a
manufacturing company can exchange an old piece of
equipment for a new one without incurring any losses.  But
there are no standards available in Hong Kong for exchange
of assets of different natures.

A new rule in the International Accounting Standard has
defined that an exchange of assets would be treated as a
sale-and-purchase transaction only when it is conducted on
"substantially different terms".  "Substantially different
terms" mean the net present value (NPV) of the new asset
item is 10 per cent higher or lower than the NPV of the old
asset item.  This new rule would not be effective until
2001, he said and accounting firms were still waiting for
updates from the Hong Kong Society of Accounts and the Hong
Kong Monetary Authority on this matter.  (South China
Morning Post  01-Nov-1999)

QPL INT'L HOLDINGS: Posts massive annual loss              
Debt-ridden semiconductor-maker QPL International Holdings
collapsed to a HK$3.13 billion net loss in the year to
April 30 from a HK$314.74 million net profit a year
earlier, one of the biggest losses in Hong Kong's corporate

The disastrous performance arose from HK$2.94 billion
exceptional losses attributable largely to the group's
British operations, HK$159.08 million in net interest
expenses and a tough operating environment in Asia.  
British subsidiaries, the silicon manufacturer Newport
Wafer-Fab Ltd (NWL) and integrated circuit assembler ASAT
(UK), suffered "substantial operating losses" last year,
which wiped out the profits of Hong Kong-based integrated
circuit packaging division ASAT, the group said.

Operating profit dived to HK$33.54 million from HK$507.45
million previously on turnover down 16.12 per cent to
HK$2.21 billion. Loss per share was HK$6.17 against 65 HK
cents earnings per share previously.  QPL's problems
emerged last year when the worldwide semiconductor industry
was hit by oversupply along with Asia's financial downturn.

This caused NWL and ASAT (UK) to be put under Britain's
court administration at the beginning of this year and QPL
to dispose of 50 per cent of lucrative ASAT to a consortium
led by Chase Asia Equity Partners in July for about US$200
million.  In July and August, Britain's courts sold
operations and assets of NWL and ASAT (UK) to their
respective managements independent of QPL.

The company incurred an exceptional loss of HK$1.27 billion
from active operations and HK$1.67 billion from
discontinued operations.  The one-off losses included
provisions for impairment in the value of interest in NWL
and ASAT (UK), obsolete stock as well as for finance and
lease obligations guaranteed for the two British
subsidiaries by the group. QPL chairman Li Tung-lok said
the group was on the track for a recovery after severing
NWL and ASAT (UK) and selling the stake in ASAT.

QPL used the proceeds arising from the ASAT stake sale to
greatly reduce the group's indebtedness to HK$429 million
from HK$2.84 billion as of June 30.  Prior to paying down
the debt, QPL had been in a standstill agreement with its

QPL's net asset value stood at HK$152 million, or 30 cents
per share, compared with net liabilities of HK$556 million
or HK$1.10 per share as of April 30.  The group is hoping
to gain from rising semiconductor sales fuelled by demand
for the Internet and electronic commerce.  QPL said it was
expecting 10 per cent annual growth for the semiconductor
industry to the end of 2002.

Andrew Liu Yiu-sing, chief executive of Chase Asia Equity
Partners, said yesterday that ASAT's profit margin had
improved in the three months to October 31, as the new
shareholders had strengthened ASAT's management and
financial health.  "We intend to seek a listing for ASAT on
the Nasdaq or the Hong Kong stock exchange in due course,"
he said. (South China Morning Post, Hong Kong Standard  01-

TSE SUI LUEN JEWELLERY: Suffers big loss on property sale
Tse Sui Luen Jewellery (International) has sold a property
in Tsim Sha Tsui to Well Century Holdings for $166M.  The
selling price, when compared with the property's book value
of $356M, will mean Tse Sui Luen will make a book loss of
$191.34M, including the transaction cost.  The loss will be
booked in the company's accounts for the year to February
28, 2000.


DAEWOO GROUP: Debt-for-equity swap in the works
Domestic creditors of Daewoo Corp. are pursuing a maximum
16.7 trillion-won ($13.85 billion) debt-for-equity swap for
the debt-burdened flagship of the Daewoo Group, officials
said yesterday.

They also said that domestic creditors of the
conglomerate's 12 units placed under debt-workout programs
stand to lose as much as 73 percent of their loans to them
as most of the ailing firms have debts exceeding assets.
Creditor bank officials and the Financial Supervisory
Commission said a due diligence audit of Daewoo Corp., the
group's trading and construction arm, showed that the
company is able to cover only 6 trillion won to 9.7
trillion won out of its total debt of 22.7 trillion won.

Given the due diligence outcome, the amount of Daewoo
Corp.'s debts to be rescheduled are estimated to reach 13
trillion won to 16.7 trillion won, the officials said.
If creditors judge that the trading firm can meet only 6
trillion won of its debts, they will have to reschedule the
remaining 16.7 trillion won debt.

In that case, creditors may buy the firm's convertible
bonds worth 14.5 trillion won or allow it not to pay
interest on the debt, while the remaining 2.2 trillion won
may be swapped for equity, the officials said.  Daewoo
Corp.'s liabilities came to 26.3 trillion won, while its
assets amounted to 11.8 trillion won.

For the remainder of the firm's debts, the creditors may
suspend the repayment of the principal and are likely to
provide a fresh loan of about 1 trillion won, they said.
Korea First Bank and other creditors are to meet tomorrow
to discuss a final debt-workout program for the troubled
trading firm.  Floundering under the weight of over 60
trillion won in debts, Daewoo, the nation's second largest
conglomerate, sought a bailout in July. Creditors have
decided to put 12 Daewoo units under rehabilitation
programs to keep them afloat.

Meanwhile, due diligence audits indicated that creditors of
the 12 subsidiaries may be required to write down or
reschedule as much as 73 percent of their loans to them.
In the cases of Orion Electronic Co. and Daewoo Motor Sales
Co., the creditors will suffer little losses from their
exposure because the firms' assets exceed debts.

But for other firms, creditors have to restructure a large
proportion of their loans. The proportions of debt to be
restructured are 6.5 percent for Daewoo Electronic
Components Co.; 15 percent for Ssangyong Motor Co., or
Daewoo's jeep-making unit; 25.9 percent for Keangnam
Enterprise Ltd.; and 41.7 percent for Daewoo Telecom, Ltd.
As for Daewoo Heavy Industries, Ltd. and Daewoo Electronics
Co. (DEC), the necessary debt-rescheduling ratios are
estimated to reach 20 percent and 40 percent, respectively.
Daewoo Heavy Industries' debts totaled 9.9 trillion won,
while DEC's total borrowing came to 5.5 trillion won.
Creditors of Daewoo Motor Co. with a total debt of 9.7
trillion won are expected to reschedule 30 to 50 percent of
their loans to the automaker.  (Korea Herald  01-Nov-1999)

DAEWOO GROUP: Local banks considering debt-to-equity swap
Daewoo Group's creditor banks are currently seeking ways to
convert $15 billion in debts of Daewoo Corp. into equity,
as the company is capable of repaying less than $5 billion,
the financial authority said.  The total net equity of the
company was estimated at less than $10 billion.

The loss ratio of Daewoo Corporation, major financial arm
of the Daewoo Group, is estimated to be more than 70
percent, much higher than the group's average of 50
percent.  The preliminary due diligence report states that
Daewoo Corp.'s total bank liabilities amount to $20
billion, 40 percent of the group's $50 billion, the
Financial Supervisory Commission (FSC) said yesterday.

The total amount of bank credits was reported to be higher
than any other Daewoo affiliate since it was the major
financing unit of the group, the FSC said.  

Local creditor banks are also considering injecting an
additional $1 billion to support the recovery of Daewoo
Corp.  For future operations of the company, the creditors
are looking to separate it into two independent units
specialized in trading and construction.

The workout plan is to be confirmed this week following a
discussion with the company's overseas creditors, the FSC
said.  For Daewoo Telecom, one of the most profitable
business operations of the group, the creditor banks
decided to swap $1 billion debts for equity.  The due
diligence of Daewoo's telecommunication unit stated that
the total of $1 billion exceeds the company's repayment

The local banks will convert $100 million into equity
immediately, which is equivalent to over 50 percent of the
company's paid-in capital, the FSC said.  This will also
give the creditor banks major ownership of Daewoo Telecom.
For the remaining $900 million, the creditors decided to
swap it for 5-year convertible bonds.

Daewoo's domestic creditors have been putting the finishing
touches on debt restructuring plans last week, despite
failing to reach a pact with the group's foreign lenders on
a debt freeze.  Local creditors placed the 12 core Daewoo
affiliates under a debt rescheduling program in late July
after rescuing the country's second largest conglomerate
from bankruptcy.

The group's book value assets amounted to $60 billion prior
to its liquidity crisis.  The total debts come to $50
billion including some $10 billion owed to foreign
creditors.  (Korea Times  31-Oct-1999)

DAEWOO GROUP: Foreign creditors to be allowed role in rehab
After three months of dispute over rescheduling of Daewoo's
short-term overseas debts, the government finally agreed to
allow foreign creditors to participate in the forced
restructuring of the group's major affiliates.

Lee Hun-jai, chairman of the Financial Supervisory
Commission, said Friday that the debt rescheduling of key
Daewoo units with heavy overseas borrowing will be
finalized after endorsement by foreign banks.

"The workout plans for four major Daewoo subsidiaries with
heavy overseas loans would be confirmed after a detailed
review by foreign creditors," Lee said during a speech at
Korea University's Graduate School of Policy.

The four key business units of Daewoo are Daewoo
Corporation, Daewoo Motor, Daewoo Electronics and Daewoo
Heavy Industries.  This is a major breakthrough to the
ongoing negotiation between the Korean government and
foreign lenders over Daewoo's overseas debts.

With the group's over 200 foreign creditors voicing against
the government's "dogmatic" policy of Daewoo's
restructuring, Korean authorities now agreed to ask for a
final approval from foreign banks inn regard to recovery of
major business arms.  Although the financial authorities
promised to let foreign bankers take part in the forced
restructuring process of Daewoo, there has been no cases of
actual foreign participation.

While speaking about the pace of Daewoo's workout process
earlier, Lee said it will be slower for core business
operations with heavy foreign debts than those for other
subsidiaries, adding the process will be finalized after
review by foreign creditors.

"In the case of the Daewoo affiliates with a relatively
simple composition of creditors, workout plans will be
finalized within this month," Lee told members of American
Chamber of Commerce in Korea on Wednesday at the Shilla
Hotel in downtown Seoul.  "As for the other companies with
relatively heavy foreign borrowings, the workout plans will
be finalized after sufficient reviews and discussions by
the foreign and domestic creditors take place."

In the wake of Korea's largest corporate failure, foreign
creditor banks have complained of "discriminatory" policy
of the Korean government, saying overseas lenders have been
left out of the Daewoo's recovery process.  Through the
foreign creditor steering panel, they have demanded the
Korean government consult with them prior to issuing any
debt restructuring plans for Daewoo.

The foreign lenders have also argued that the financial
authorities should offer a guarantee on their credits in
Daewoo should the group fail to repay their overseas
borrowings.  However the Korean authorities have conducted
a rehabilitation of Daewoo excluding the group's foreign
creditors.  The government has also rejected the foreign
bankers' request of government guarantee, saying that state
authorities are not obliged to cover losses in the private

During the Tokyo meeting last Thursday, Daewoo's overseas
lenders again rejected the Korean government's request for
extending the group's $5 billion short-term liabilities.
Out of the group's total debts of $50 billion, loans from
foreign creditors account for $10 billion.  Almost half of
$10 billion matures within this year.  (Korea Times  31-

DAEWOO GROUP: Chairman, 14 unit presidents resign
Daewoo Group chairman Kim Woo-choong has finally made it
clear that he will retire from his post. A month earlier
Kim stepped down from his position as chairman of the
Federation of Korean Industries.

A group spokesman announced Monday that the presidents of
twelve Daewoo subsidiaries resolved on Monday morning, to
resign collectively and jointly submitted their
resignations to Oh Ho-keun, the Daewoo representative in
charge of the group's restructuring. The spokesman said
that a total of 14 president-level executives took the
collective action.

He added that Chairman Kim relayed his intention to resign
by telephone from Frankfurt where he is now staying. "Kim
is at present overseas, still engaged in business issues of
the group. He expressed his intention to relinquish the
leadership of the group from overseas," said the spokesman
in a press statement.  "The resignation of the group
chairman and presidents proves Daewoo's commitment to fully
cooperating with the government-creditor led recovery

Kim, who founded the nation's second largest chaebol has
been relegated to a mere figurehead since the announcement
of the conglomerate's liquidity crisis in late July. Kim
also quit his chairmanship of the Federation of Korean
Industries (FKI), the largest trade association for the
chaebol, earlier last month.

Those who resigned Monday include Kim Tae-gu and Chung Ju-
ho, presidents of Daewoo Motor, Choi Kye-yong of Ssangyong
Motors, Kang Byoung-ho of Daewoo Telecom, Chang Byoung-joo
of Daewoo Corp.'s Trade Division, Choi Joo-wan of Daewoo
Capital, Shin Young-gyun of Daewoo Heavy Industries,
Shipbuilding and Maritime Division, Choo Ho-suk Daewoo
Heavy Industries, General Machinery Division, Kim Young-nam
of Orion Electric, Yang Jae-yeol of Daewoo Electronics, and
four other high-ranking executives.  (Digital ChosunIlbo,
Korea Times  01-Nov-1999)

DAEWOO ELECTRONIC COMPONENTS: Creditors reveal workout plan
DAEWOO TELECOM: Creditors present workout plan
SSANGYONG MOTOR CO.: Creditors reveal workout plan
Domestic creditors of three Daewoo Group subsidiaries
yesterday finalized debt-workout programs focussing on
debt-to-equity swaps, suspension of debt repayments and
interest cuts, creditor bank officials said.  The three
Daewoo subsidiaries are Daewoo Telecom, Ltd., Daewoo
Electronic Components Co. and Ssangyong Motor Co., the
group's jeep-making arm.  

Under the rehabilitation plans, creditors of Daewoo Telecom
will swap its debts of 200 billion won ($167 million) for
equity to obtain a controlling stake in the tele-
communications provider.  The company's additional debt of
1.28 trillion won will also be swapped for convertible
bonds, which will mature in three years and carry no

Creditors also will allow Daewoo Telecom to suspend the
repayment of its remaining debts until December 2004, while
they will apply prime interest rates to the firm's bonds.
In addition, they will provide fresh funds of $219 million
in trade finance to the company and a payment guarantee of
30.5 billion won.  

In the case of Ssangyong Motor, creditors will convert its
130 billion won debt into equity for a 53 percent stake in
the jeep maker. Before the debt-to-equity swap, owners'
capital of the auto-maker will be reduced by two-thirds.
Creditors will also allow Ssangyong Motor to put off the
repayment of 1.6 trillion won in debts until December next
year and cut interest on the debts.  In addition, they will
grant the jeep-maker fresh loans of $240 million and intend
to sell the firm by the end of 2000.

For Daewoo Electronics Component, with relatively low
exposures, the domestic banks agreed to freeze its debt of
$50 million (63 billion won) until Dec. 2001.  To take the
ownership of the company, the banks decided to place new
convertible bonds at 6 percent coupon worth $5 million.  

Meanwhile, creditors of Daewoo's four major units -Daewoo
Corp., Daewoo Motor Co., Daewoo Electronics Co. and Daewoo
Heavy Industries Inc. - will meet today to discuss workout
programs for those companies.  An official at the Corporate
Restructuring Coordination Committee said yesterday that
legal and accounting advisers to the steering committee of
Daewoo's foreign creditors will attend today's meetings as

Daewoo's foreign creditors have accepted domestic
creditors' request that their representatives take part in
today's meetings, the official said.  The coordination
committee is an advisory panel of the Financial Supervisory
Commission, which is in charge of the nation's corporate
and financial restructuring.

Daewoo's domestic creditors are now preparing debt-workout
programs for the conglomerate's 12 subsidiaries to keep
them afloat. The rehabilitation programs for the 12 units
are expected to be completed by the middle of this month.
Struggling under the weight of 60 trillion won in debts,
Daewoo, the nation's second largest conglomerate, sought a
bailout from creditors in late July.  (Korea Herald  02-
Nov-1999. Korea Times  01-Nov-1999)

HYUNDAI GROUP: FTC to investigate spinoff units
LG GROUP: FTC to investigate spinoff units
SAMSUNG GROUP: FTC to investigate spinoff units
SK GROUP: FTC to investigate spinoff units
The Korea Fair Trade Commission announced Monday that it
will investigate 27 firms spun-off from 10 business groups
for possible illegal internal transactions.

Five of the firms under investigation are spin-offs from
Hyundai and another five are from Samsung. Three additional
firms are LG spin-offs while another three are from SK.
Among the chaebols, Daewoo has been exempted from the
investigation since it is currently undergoing a workout
program. Hanjin is also excluded from the probe since it
has not spun off any subsidiaries.  (Digital ChosunIlbo  


DAVAO UNION CEMENT: SEC allows offering to reduce debt
The Securities and Exchange Commission has allowed Davao
Union Cement Corp. to issue long-term commercial paper
worth P1 billion.  Davao Union plans to issue the CPs
through a public offering underwritten by AB Capital &
Investment Corp. The CPs are in denominations of P50,000.
The company will use the proceeds to pay maturing debt.

Its creditors include Far East Bank and Trust Co. (P259
million), AB Capital (P500 million), Metropolitan Bank &
Trust Co. (P30 million), and the European Investment Bank
(P191.6 million). Davao Union borrowed the money to finance
its expansion program.

The SEC based its approval on Davao Union's credit rating
of Baa given by Philippine Rating Services Corp. It
indicates the security is neither highly protected nor
poorly secured. It means interest payments and principal
security appear adequate but still prone to risks.

In giving the rating, Philippine Rating Services considered
the cyclical downturn in the construction industry, the
cement supply glut, and the company's high debt burden.
But those were balanced by Davao Union's "improving cost
structure and favorable logistical infrastructure."

Davao Union is under the Phinma Group, the biggest cement
manufacturing group in the country.  (Manila Times  01-Nov-

EAST ASIA POWER RESOURCES: Rights offering to repay debts
East Asia Power Resources Corp. hopes to raise P2.2 billion
from its pre-emptive rights offering on Nov. 25 to Dec. 7
that it will use to repay debts.

Based on documents submitted to the Philippine Stock
Exchange, the independent power producer will issue 1.75
rights share for every one common share held by
shareholders.  The rights shares will be offered at P1
apiece. All shareholders as of Nov. 19 may avail themselves
of the rights shares during the offer period. East Asia
Power has tapped PNB Capital and Investment Corp. to
underwrite the offer.

"The net proceeds from the offering of approximately P2.187
billion will be used for the repayment of the outstanding
debt and the interests incurred by the company from El Paso
Philippines Holding Co. Inc.," the company said.

Last month, Filinvest Development Corp. sold its 16.67
percent stake in East Asia Power for P650 million. to the
US-based utilities firm El Paso Energy International Co.
That brought El Paso's stake in East Asia to a controlling
63 percent.  Last year, El Paso Energy International
already held 46 percent of East Asia Power after it
acquired the holdings of Dutch Firm Van Der Hoerst.

Filinvest Development Corp. is one of the biggest
conglomerates in the Philippines with interests in banking,
manufacturing and property development. Filinvest's
Festival Mall, billed as one of the biggest in Asia, has
shown considerable improvement as 85 percent of its space
has been leased.

East Asia Power started in 1975 as a mining company. It now
operates power generation facilities in Metro Manila,
Bataan, and in China's Jiangtsu province.  (Manila Times  

PETRON CORP.: Financial situation delays CapEx approval
Oil firm Petron Corp. has deferred the approval of its 1.7-
billion-peso (US$42.2 million at PhP40.250:US$1) capital
expenditure (capex) program next year, citing its
precarious financial situation.

In an interview, Petron president Khalid-Al Falih said the
firm has postponed the decision on whether it will proceed
with its capex budget until January next year.

"The board has approved our budget for miscellaneous
projects but it has postponed the decision for our capex
which is detrimental to our viability. We will definitely
proceed with the program but we must have the ability to
finance our projects instead of having under-recoveries,"
Mr. Falih said.

The bulk of the firm's capex will be allocated for the
construction of retail stations, refinery expansion and
other investments in compliance with the requirements of
the Clean Air Act. "We will be spending close to a billion
pesos (US$25 million) for our retail stations and around
PhP500 million (US$12.4 million) will be used for our
investments on the Clean Air Act," he added.

Mr. Falih said the firm is ready to comply with the
government's plan to advance the implementation of one of
the provisions of the Clean Air Act which is to phase out
leaded gasoline in Metro Manila by January 2000.  However,
the firm's investment for reduction of sulfur in processing
is part of next year's capex.

"We can comply with the phaseout of lead in gasoline by
next year but now that we are already beginning to invest
for the reduction of sulfur by 2003 we have to start
spending money by next year," he explained.

With Petron's financial situation its investments for the
Clean Air Act might be affected should its board decide to
reject or reduce its budget next year.  The Petron
president added that the board's decision will rely mainly
on its financial situation.  Under the approved Clean Air
Act, aromatics in unleaded gasoline must not exceed 45%
while benzene should not be higher than 4%. Also, within 1-
1/2 years sulfur in automotive and industrial diesel must
not exceed 0.2% and 0.3% respectively, and by January 1,
2005 sulfur content in automotive diesel must not exceed

These requirements are on top of the PhP40 billion
(US$993.7 million) the local oil sector has spent for the
procurement and upgrading of facilities since 1990 to
improve environmental quality.

Petron stocks have ceased to become profitable given the
company's susceptibility to political pressures.  As it is,
analysts surveyed by BusinessWorld have started
recommending either a hold or sell on the listed oil firm's
shares.  Last Saturday, oil firms led by Petron agreed to
President Joseph Estrada's request to temper their long-
delayed oil price adjustment to an average PhP0.50 per
liter. The oil companies were early on looking at a PhP1.37
per liter fuel price adjustment.

Petron sustained a dismal quarter-on-quarter net income in
the third quarter with PhP113 million (US$2.8 million) from
the previous two quarter average earnings of PhP950 million
(US$23.6 million). This developed despite a 5% improvement
in sales volume to 13.5 million barrels.  The company
suffered PhP192 million (US$4.8 million) in losses in
September compared with its August and July income of PhP12
million (US$298 million) and PhP293 million (US$7.27
milliohn), respectively. The company's interest charges
have already reached PhP164 million (US$4 million), of
which 64% was incurred in the third quarter.

Short-term debt has bloated to PhP21 billion (US$522
million) as of September 1999 from PhP12 billion in end-
1998.  Petron, as well as other petroleum investors, are
claiming underrecoveries of as much as PhP1.37 per liter
amid the staggered but consistent ascent of crude prices.
World crude prices have gone up by an average of $10 per
barrel in February to $22 as of September.

"Given the supposed "deregulated state" of the industry,
the company should be accorded with the rate hike.
Unfortunately, it now depends on whether Petron would bite
on President Estrada's moral suasion which comes at an
inappropriate time when his approval ratings are

"President Estrada's proposal seems viable on three counts:
that would assist him regain his popularity, speed up
possible privatization of government's stake in the firm
and Petron would still end up in black," an analyst at a
local brokerage firm told BusinessWorld.  

Industry sources have said more price increases are under
way despite Prersident Estrada's prodding. "The case might
be different if ever the increases will be implemented in
staggered phases. Petron may still end up with a PhP3.2-
billion net income which is slightly lower by 15% than last
year. (But) Overall, Petron's estimated 50% decline in net
profits this year assuming underrecoveries are not passed
on to consumers is expected to deter participants from
accumulating its shares," the analyst said.  (Business
World  01-Nov-1999)

UNIWIDE GROUP: Offers suppliers non-subordinate repay plan
In an effort to refocus efforts on its core business of
retailing, cash-strapped Uniwide Group of Companies has
offered trade suppliers a "non-subordinate" repayment plan
in exchange for credit and marketing support.

Under the rehabilitation plan proposed by the Uniwide
receivership committee, trade creditors and suppliers of
the Gow-owned group will receive an initial payment of 5%
of the outstanding balance or 50,000 Philippine pesos
(US$1,200 at PhP40.250:US$1), whichever is higher.  In
return, trade suppliers will be asked to grant new credit
terms for amounts up to the outstanding payable balances.
Repayment on outstanding payables will be made in an amount
equal to the credit terms granted on new purchases, Uniwide

It has been identified that Uniwide's return to the retail
business will recapture its lost market share and generate
revenues of at least PhP12 billion (US$300 million) on the
first year and achieve profitability on the third year of

"Assuming an annual sales level of PhP12 billion (beginning
December 1999) is met, existing payables to trade suppliers
can be paid within 14 months," the retail and property
group said.

At present, Uniwide said the inventory level and mix at the
Uniwide Warehouse Clubs can only generate PhP400 million
(US$9.9 million) in revenues per month, making it necessary
for new credit lines to be established. This is expected to
increase inventory level and meet the PhP12-billion
earnings target.

The receivership committee headed by former Petron chairman
Monico Jacob pointed out that the proposed repayment plan
to trade creditors "aims to clean up debt accounted for by
small suppliers and concessionaires. Under this payment
scheme, some 1,000 small suppliers shall be fully paid for
their receivables."

Uniwide suppliers include snack food manufacturer Leslie
Corp. with claims of over PhP2 million (US$50,000); Alaska
Milk Corp. with claims of PhP5.92 million (US$150,000);
Zesto Corp. with an exposure of PhP8.92 million
(US$220,000); and Del Monte Corp. and Virginia Food, Inc.
with claims of PhP3.31 million (US$82,000) and PhP4.65
million (US$115,000), respectively.  Total claims of
Uniwide suppliers and concessionaires amount to over PhP1.7
billion (US$43.4 million).  (Business World  01-Nov-1999)


URACO HOLDINGS: Posts fiscal year loss -- again            
Uraco Holdings Ltd, one of Singapore's biggest makers of
computer disk-drive components, said its fiscal 1999 loss
widened as orders for semiconductor making equipment
dropped and less of its facilities were in use.

The Singapore-based contract manufacturer said its losses,
before a charge, widened to $26 million, or 8.1 cents a
share, from $17.3 million or 5.4 cents, for a year earlier.  
Sales fell 11.5 per cent to $120.8 million in the year
ended July 31, from $136.4 million. The company took an
exceptional charge before operating losses of $13.9
million, mostly for bad debts.

The company said it plans to raise about $40 million in a
share sale, and use $15 million of the proceeds to repay
bank borrowings and the rest for expansion.   The company
plans to offer four shares for every five shares. Up to 340
million shares could be issued, including ordinary shares,
warrants and preference shares.

In conjunction with the rights issue, Uraco will seek
shareholders' approval to raise its authorised share
capital from $50,009,500 divided into 500,000,000 shares
and 9,500 redeemable convertible preference shares (RCPS)
to $100,009,500 divided into 1,000,000,000 shares and 9,500

As for the current fiscal year, Uraco said it expects to
improve its performance as the company negotiates with its
joint venture partner to sell its semiconductor equipment
making business. The stock rose 1.5 cents to 34.5 cents on
Friday. The shares have risen 41 per cent this year.  
(Bloomberg, Business Times  01-Nov-1999)


AR DEVELOPMENT: Ordered to surrender assets
CHINA PROPERTY: Ordered to surrender assets
GOLDEN FUTURE AND CONSTRUCTION: Ordered to surrender assets
NIWAT KRACHANGKANTAMAS: Ordered to surrender assets
SOMPRASONG GOLDEN PARK & PROP.: Ordered to surrender assets
SOTHANANIWAT: Ordered to surrender assets
SUPOT POONKHAM: Ordered to surrender assets
THANACHAT REAL ESTATE & PARTS.: Ordered to surrender assets
WORA ESTATE: Ordered to surrender assets
The Office of the Consumer Protection Board announced that
nine financially-troubled property developers have been
ordered by the Civil Court to surrender their assets for
auction and distribution to aggrieved home buyers,
according to an official.

The nine firms are Sothananiwat, Wora Estate, Supot
Poonkham, Thanachat Real Estate and Partners, China
Property, AR Development, Niwat Krachangkantamas,
Somprasong Golden Park and Property, and Golden Future and

The nine had earlier lost legal cases and as a result
should have paid their clients damages, but they had not
proceeded in accordance with the court's judgement. The
Office of the Consumer Protection Board later filed a
complaint to the court in order to seek the seizure of the
developers' assets.

The Legal Execution Department of the Justice Ministry is
currently assessing the developers' assets with a view to
selling them by auction and later dividing the proceeds
equally among the suffering home buyers.  The cases are
among more than 160 property complaint cases with the
consumer board. Of this total, 54 cases are currently
subject to legal proceedings, while the other 106 are being

The potential home buyers in all these cases filed
petitions to the consumer protection board for damages
after the developers had broken the terms of purchasing
contracts by failing to deliver homes to them.  The
official said that while the Office of the Consumer
Protection Board had been filing lawsuits against the
ailing property firms since as early as 1991, only nine
companies had so far been made subject to the court's
orders.  The process of confiscating and auctioning the
assets in the nine cases is expected to take from six
months to a year to carry out.  (The Nation  01-Nov-1999)

KASET THAI SUGAR CO.: Court withdraws rehab order
RUAM PHON INDUSTRY: Court withdraws rehab order
THAI IDENTITY SUGAR CO.: Court withdraws rehab order
The Bankruptcy Court has withdrawn an order that a group of
three sugar mills enter rehabilitation procedures under the
new bankruptcy law.

The decision is expected to pave the way for out-of-court
debt restructuring negotiations between creditors and the
group: Thai Identity Sugar Co, Kaset Thai Sugar Co and Ruam
Phon Industry Nakornswan Co. The bankruptcy lawsuit had
been filed earlier by Krung Thai Bank and other major

The withdrawal of the court order followed the rejection by
creditors of a rehabilitation plan for the mills drawn up
by South Sathorn Planner Co. Many creditors, particularly
farmers and small trade creditors, believed the business of
their debtors was still solvent.  (Bangkok Post  01-Nov-

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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