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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

            Monday, November 22, 1999, Vol. 2, No. 227

                                  Headlines


* C H I N A  &  H O N G  K O N G *

ELEGANT WISE INVESTMENT: Facing winding up petition
FATE ELECTRONIC CO.: Facing winding up petition
GRAND EMPIRE HOLDINGS: Facing winding up petition
KA SIX GARMENT FACTORY: Facing winding up petition
KING KOIL (FAR EAST) LTD.: Facing winding up petition
MERCURIES-JEANTEX HOLDINGS: Facing winding up petition
NEWTONE ELECTRONICS CO.: Facing winding up petition
PINGGUO ALUMINUM: Signs debt-for-equity swap agreement
SMART GRAND LIMITED: Facing winding up petition
STAR DIGITEL LIMITED: Facing winding up petition
STAR TELECOM HOLDING: Facing winding up petition
TOPCON HOLDINGS LTD.: Facing winding up petition
YET KAI CONSTRUCTION: Facing winding up petition


* I N D O N E S I A *

BANK DANAMON: Posts narrower 9-month loss


* K O R E A *

DAEWOO CORP.: Korean banks put on credit watch
DAEWOO GROUP: Jan.workout meeting for Hong Kong creditors
DAEWOO GROUP: FSS probe of financial units


* M A L A Y S I A *

LEADER UNIVERSAL HOLDINGS: Posts 9-month loss
SURIA CAPITAL HOLDINGS: Too sell bank stake, lower debts


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

MEGAWORLD PROPERTIES: Working on Landbank paydown
MONDRAGON INT'L PHILIPPINES: Court issues 90-day TRO
NATIONAL STEEL CORP.: Seeking debt-payment moratorium
SUBIC BAY YACHT CLUB: Working on Landbank paydown
TRIPLE-V GROUP: Working on Landbank paydown


* T H A I L A N D *

CENTRAL PLAZA HOTEL: Posts 3rd quarter loss
PRIOR INDUSTRY: Restructure plan approved by court
TANAYONG PLC: Accord reached on keeping BTSC control
TPI POLENE: Creditors veto rehab plan


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

ELEGANT WISE INVESTMENT: Facing winding up petition
---------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 1 on the petition of
Sun Charm Investment Limited for the winding up of Elegant
Wise Investment Limited. A notice of legal appearance must
be filed on or before November 30.

FATE ELECTRONIC CO.: Facing winding up petition
-----------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 22 on the petition of
The Hongkong and Shanghai Banking Corporation Limited for
the winding up of Fate Electronic Co. Ltd. A notice of
legal appearance must be filed on or before December 21.

GRAND EMPIRE HOLDINGS: Facing winding up petition
-------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 15 on the petition of
The Hongkong and Shanghai Banking Corporation Limited for
the winding up of Grand Empire Holdings Limited. A notice
of legal appearance must be filed on or before December 14.

KA SIX GARMENT FACTORY: Facing winding up petition
--------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 1 on the petition of
Inford Trading Limited for the winding up of Ka Six Garment
Factory Ltd. A notice of legal appearance must be filed on
or before November 30.

KING KOIL (FAR EAST) LTD.: Facing winding up petition
-----------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for January 19, 2000 on the
petition of Fu Fong Mui for the winding up of King Koil
(Far East)Limited. A notice of legal appearance must be
filed on or before January 18.

MERCURIES-JEANTEX HOLDINGS: Facing winding up petition
------------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 1 on the petition of
KwongOn Bank Limited for the winding up of Mercuries-
Jeantex Holding Limited. A notice of legal appearance must
be filed on or before November 30.

NEWTONE ELECTRONICS CO.: Facing winding up petition
---------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 22 on the petition of
The Hongkong and Shanghai Banking Corporation Limited for
the winding up of Newtone Electronics Co. Ltd. A notice of
legal appearance must be filed on or before December 21.

PINGGUO ALUMINUM: Signs debt-for-equity swap agreement
------------------------------------------------------
China's Pingguo Aluminium has signed agreements with
creditors to swap 1.5 billion yuan (HK$1.4 billion) in
debts for equity, the Financial News reported yesterday.

China Development Bank and Cinda Asset Management Corp
agreed to take on the debts owed by the smelter in return
for shares in a restructured company, the newspaper said.
The debt-for-equity swap would reduce the smelter's gearing
by 30 percentage points and cut its annual costs by 93.15
million yuan, the newspaper said.

This year, China formed four asset-management firms to
tackle bad debts at its big four state-owned commercial
banks _ the Bank of China, the Agricultural Bank of China,
the Industrial and Commercial Bank of China and the China
Construction Bank.  Modelled on the US Resolution Trust
Corp, the asset management companies _ Donfang, Great Wall,
Huarong and Cinda _ say debt-for-equity swaps will be a
main method of recovering loans and cutting the debt
burdens of SOEs.

Pingguo has a total investment of 4.438 billion yuan
including two billion yuan in loans from China Development
Bank and 1.2 billion yuan from China Construction Bank, the
newspaper said.  Cinda is the debt-clearing company set up
to tackle bad loans of China Construction Bank.  But the
smelter had been under great financial pressure because it
must "pay huge amounts of bank interest each year," the
newspaper said.

To ease the burden, the government had already injected
1.15 billion yuan to boost its registered capital, the
newspaper said without giving further details.  (Reuters,
Hong Kong Standard  20-Nov-1999)

SMART GRAND LIMITED: Facing winding up petition
-----------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for November 24 on the petition of
Genvon Development Limited for the winding up of Smart
Grand  Limited. A notice of legal appearance must be filed
on or before November 23.

STAR DIGITEL LIMITED: Facing winding up petition
------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 15 on the petition of
Mitsui & Co. Limited for the winding up of Star Digitel
Limited. A notice of legal appearance must be filed on or
before December 14.

STAR TELECOM HOLDING: Facing winding up petition
------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 15 on the petition of
Mitsui & Co. Limited for the winding up of Star Telecom
Holding Limited. A notice of legal appearance must be filed
on or before December 14.

TOPCON HOLDINGS LTD.: Facing winding up petition
------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 15 on the petition
Chan Chi Ming.Jacky for the winding up of Topcon Holdings
Limited. A notice of legal appearance must be filed on or
before December 14.

YET KAI CONSTRUCTION: Facing winding up petition
------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 8 on the petition of
Far East Structural Steelwork Engineering Limited for the
winding up of Yet Kai Construction Co. Ltd. A notice of
legal appearance must be filed on or before December 7.


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

BANK DANAMON: Posts narrower 9-month loss
-----------------------------------------
Bank Danamon, Indonesia's biggest company by market
capitalisation, said its nine-month loss narrowed as bad
loan provisions shrank and interest expenses fell by nearly
40%.  The bank's loss fell to 5.4 trillion ruiah, or 126
rupiah a share, from 23.5 trilion, or 10,480 rupiah a
share, in the first nine months of last year.  

Interest expenses fell 37% to 6.1 trillion rupiah from 9.7
trillion rupiah last year, while interest income fell 26%
to 2.9 trillion rupiah from 3.9 trillion for the same
period last year.  That means the bank's loss on its core
lending business narrowed to 3.1 trillion rupiah from 5.8
trillion rupiah.

Helping to narrow the bank's losses, though, were lower
provisions for bad loans.  Loan loss provisions fell to 1.9
trillion rupiah from 20.9 trillion rupiah, while the bank's
assets rose to 25 trillion rupiah from 20 trillion rupiah.


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

DAEWOO CORP.: Korean banks put on credit watch
----------------------------------------------
Daewoo Corporation, the construction and trading unit of
Daewoo Group, missed two interest payments on trade bills
due last week and has been put on a list of risky customers
by banks.  

Daewoo missed unspecified interest payments on trade bills
with the Korean branch of Bank of Tokyo-Mitsubishi on
November 12 and another payment to Cho Hung Bank on
November 17, according to officials at firms that provide
guarantees on Daewoo Group units.  That led Korea
Technology Guaranty Fund and Korea Credit Guaranty Fund to
suspend their guarantees on some Daewoo Corp. trade bills,
making it harder for Daewoo to negotiate a rescheduling of
its US$73B debt.

The company may seek bankruptcy protection which would mean
freezing all of Daewoo Corp's debts until a decision is
made on whether to wind up the company.  Daewoo Corp.
shares fell 7.2% taking its loss for the year to 83%,
against a 77% gain the key Kospi index.  Daewoo Corp. has
32 trillion won of debt, 14.5 trillion more than its
assets.  

DAEWOO GROUP: Jan.workout meeting for Hong Kong creditors
---------------------------------------------------------
Hong Kong-based foreign creditors of Daewoo Corp.'s Hong
Kong affiliate will hold a hearing in January to decide
whether to participate in the debt workout of the troubled
company, a senior Daewoo official said yesterday.

If over half of the creditors agree to Daewoo's
restructuring plan, they will seek cooperation from Hong
Kong financial authorities and courts, the official said,
after attending a foreign creditors' meeting in Hong Kong a
day earlier.

Despite the Hong Kong-based banks' decision, the Seoul
government will finalize workout plans for the four key
Daewoo affiliates - Daewoo Corp., Daewoo Motor, Daewoo
Heavy Industries and Daewoo Electronics - by Nov. 25 after
coordination with all of Daewoo's foreign creditors.
(Korea Herald  20-Nov-1999)

DAEWOO GROUP: FSS probe of financial units
------------------------------------------
The Financial Supervisory Service (FSS) is conducting a
special probe into two money-spinning financial
subsidiaries of the Daewoo Group for improper intragroup
financial transactions, according to financial sources
yesterday.

The financial watchdog began the audit of Daewoo Capital
Ltd. and Diners Club of Korea last week and is scheduled to
complete it by today.  The FSS is delving into the two
units' financial transactions with the troubled Daewoo
Corp. and other Daewoo affiliates to determine if they
illegally lent money to sister units.

In addition, the FSS is looking into whether they engaged
in irregular book keeping practises, as due diligence on
them revealed assets and liabilities did not match the book
value.  So far, auditors have found that Diners Club of
Korea provided Daewoo Corp. with 580 billion won in bridge
loans, violating the regulation limiting a firm's lending
to twice its own capital. Currently, the firm's capital
stands at 100 billion won. (Korea Herald  20-Nov-1999)


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

LEADER UNIVERSAL HOLDINGS: Posts 9-month loss
---------------------------------------------
Leader Universal Holdings Bhd has reported a net loss of
RM197.82mil for the nine months ended Sept 30, 1999,
compared with a loss of RM46.819mil in the same period last
year.

A company statement said its sales during the period under
review were RM742.24mil against RM818.69mil previously,
while operating loss fell to RM12.42mil from RM64.50mil.
The company recorded an exceptional loss of RM133.39mil
arising from provisions for a writedown of fixed assets and
stocks.

The group's short and long-term borrowings as of end-
September stood at RM306.52mil and RM643.79mil
respectively.  Leader said the group's losses were
primarily due to the "substantial and unanticipated losses"
from unit Incab Industries Ltd of RM76.4mil and losses
amounting to RM154.9mil from a project undertaken by its
Hong Kong unit Sinolink Mobile Communications Ltd in China.  
(Star Online  20-Nov-1999)

SURIA CAPITAL HOLDINGS: Too sell bank stake, lower debts
--------------------------------------------------------
Suria Capital Holdings Bhd has proposed to dispose of its
100% equity interest in Sabah Development Bank Bhd to the
Sabah state government for RM1.

Suria's substantial shareholder Warisan Harta Sabah Sdn Bhd
is a 100%-owned investment arm of the Sabah state
government.  Suria said in a statement to the KLSE
yesterday that the total consideration of RM1 was arrived
at after taking into account the fair value of Sabah
Development Bank.

Suria said the proposed disposal would allow it to reduce
the group's borrowing and interest costs which had been
affected by Sabah Development Bank's loss-making
operations. Sabah Development Bank's net liabilities as at
May 31 stood at RM130.52mil.  The group's earnings are
expected to improve in future after completion of the
proposed disposal.  The Sabah government has undertaken to
fully release and discharge Suria from any guarantees and
indemnities Suria has issued to various lenders of Sabah
Development Bank.  (Star Online  20-Nov-1999)


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

MEGAWORLD PROPERTIES: Working on Landbank paydown
SUBIC BAY YACHT CLUB: Working on Landbank paydown
TRIPLE-V GROUP: Working on Landbank paydown
-------------------------------------------------
State-owned Land Bank of the Philippines (Landbank) plans
to trim down its 19% non-performing loan (NPL) ratio by
actively restructuring its big-ticket loans, bank president
Florido P. Casuela said.  While it has accepted Subic Bay
Yacht Club (SBYC) shares as payment for the Triple-V Group
of Companies' 100-million-peso (US$2.5 million at
PhP40.321:US$1) unsecured debt, Landbank has yet to
finalize a similar arrangement for SBYC's PhP800-million
($19.8 million) loan.

Landbank's exposure to SBYC was in two tranches of PhP400
million ($9.9 million) each. The loan is secured by unsold
yacht club shares.  Triple-V owner and Subic Bay Waterfront
Development Corp. (SBWDC) chairman Victor V. Villavicencio
has been negotiating with Landbank for the restructuring of
the two companies' debts. SBWBC is the developer and seller
of the yacht club shares. The shares are valued at PhP1.7
million ($42,000) each for the individual and PhP2.4
million ($60,000) each for the corporate.

Meanwhile, Megaworld Properties, Inc. has managed to reduce
its outstanding PhP1.9-billion ($47 million) debt to
Landbank to only PhP350 million ($8.7 million). Megaworld
has agreed to pay PhP700 million ($17.4 million) in cash to
Landbank, while the remainder will be paid in the form of
real estate assets.  (Business World  19-Nov-1999)

MONDRAGON INT'L PHILIPPINES: Court issues 90-day TRO
----------------------------------------------------
The gaming and leisure firm Mondragon International
Philippines gets a 90-day reprieve after a Makati Regional
Trial Court issued a three-month temporary restraining
order against the banks wanting to exercise certain rights
with the use of the shares pledged to them by the leisure
and gaming firm.

With its decision, the court thwarted the move by banks to
take over the firm until a judicial determination had been
made on whether or not the casino operator defaulted in its
obligations with Asian Bank, United Coconut Planters Bank
and Far East Bank & Trust Co.

Mondragon International argued that its loan agreement with
the banks expressly provided that subsidiary Mondragon
Leisure and Resort Corp. was given six years to fully
settle and pay its obligations amounting to $22 million.
The hotel and casino operator said it expected to fully pay
its obligations to the government within the next three
months or not later than January 31, 2000 through
refinancing by a major United States Trust in the amount of
$175 million.

The company said this would only happen if its creditor-
banks would be stopped from using the 369.44 million shares
Mondragon International pledged to them.

"Unless restrained, he banks will vote these shares in
their favor to effect a take over of Mondragon
International and Mondragon Leisure and possibly later,
carve out and dispose Holiday Inn Hotel and the Mimosa
Regency Casino, petitioner's primary source of revenues,"
MIPI said.

The pledged shares represent 54 percent of the total
outstanding capital of Mondragon International.
Mondragon International said that banks' action could
trigger a mad rush to take over the assets of petitioners
and precipitate the eventual collapse of their business.

"Considering the heavy loan exposure of about 23 banks in
Mondragon Leisure amounting to more than P5.3 billion, its
collapse will have a tremendous impact on the banking
industry and the Philippine economy as a whole," the
company said.

Former tourism secretary Jose Antonio Gonzalez, majority
owner of Mondragon International, moved its November 15
annual meeting to February 21 next year in a bid to remain
in control of the leisure and gaming firm.  Mondragon
International said, however, the rescheduling of the
meeting was to enable management to finalize the terms of
the refinancing by an American trust company and prevent
the hostile takeover of a Malaysian group of the Mimosa
Leisure Estate, its crown jewel.

The banks have reportedly worked out an arrangement with
the Clark Development Corp. and the Malaysian Group and
other investors to pave the way for a takeover of the
Mimosa Leisure Estate.  (Manila Times  19-Nov-1999)

NATIONAL STEEL CORP.: Seeking debt-payment moratorium
-----------------------------------------------------
Hard-luck National Steel Corp. is seeking a moratorium on
its debt payments to stop creditors who want to foreclose
on its assets.  The company is now preparing a petition to
suspend payments for filing with the Securities and
Exchange Commission, a source says.

This happened even as another source said beer and tobacco
magnate Lucio Tan was planning to take over National Steel.
Tan, also chairman of another ailing firm, Philippine
Airlines, and about to become the top shareholder in
Philippine National Bank, is said to be talking with
government officials to acquire a controlling stake in
National Steel. He could not be reached for comment.

Sources said Tan was only waiting for the government to
finalize its review of National Steel's finances and for
the banks to foreclose on its assets. They said a takeover
would be swift and that Tan was even willing to foot the
$130-million bill to rescue the company. PNB, the bank with
the largest exposure in National Steel, wants to foreclose
on the company to clear the way for a restructuring of its
loans. Tan, through PNB, would have put in P5 billion into
National Steel once its loans were converted into equity.

Tan has been acquiring PNB shares through his own
commercial bank, Allied Banking Corp. His group was buying
up PNB shares when the bank issued P9.3 billion in a stock
rights offering in September. Allied Bank is said to have
bought or still acquiring 15.6 percent worth of the rights
offer. Tan is said to own 30 percent of PNB, but that could
increase to 60 percent once he bids for and wins the
government's diluted 30-percent share in the bank.

National Steel lost P4.27 billion last year and incurred
P16.03 billion in liabilities at the end of 1998 against
assets of P32.02 billion. The company owes P15 billion to
Philippine National Bank and P1.2 billion to government-
owned Development Bank of the Philippines.  A debt relief
is expected to ease the burden of National Steel, which was
forced to close two weeks ago due to huge losses as a
result of the depressed construction sector-its biggest
customer-and competition from cheap imported steel. It lost
P4.27 billion last year alone.

PNB and Land Bank of the Philippines have started
foreclosure proceedings against the assets of National
Steel, which closed on Nov. 7. They filed their suits in
court last Monday.  The collection suits and the debt-
relief petition to be filed by National Steel are expected
to delay, if not frustrate, a plan to attract new investors
into the ailing firm.

The government sold the loss-making National Steel to a
Malaysian group, Wing Tiek Holdings, in 1995. But Wing Tiek
ran out of money, and that paved the way for the entry of
another Malaysian group, Hottick Investments. Hottick is
now looking for people who will put new money into the
firm.

The steel maker was once one of the government's top
earners. It reported profits of P421 million in 1989, P149
million in 1990, P538 million in 1991, P352 million in
1992, P322 million in 1993, P110 million in 1994, and
P587.41 million in 1995. This record was broken in 1996
when National Steel lost P2.555 billion including P860.8
million in foreign exchange. The following year, however,
it recovered and posted a profit of P54.26 million when its
interest payments dropped to P558.16 million from P1.13
billion in 1996.

Even the Credit Information Bureau Inc. failed to predict
National Steel's future. In June 1994, it gave a high CIB-1
rating to the steel firm's planned P2.2-billion long-term
commercial paper based on the company's profitability from
1989 to 1994.  The rating agency withdrew this rating in
1996 when the company's profits began to fall.  (Manila
Times  19-Nov-1999)


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

CENTRAL PLAZA HOTEL: Posts 3rd quarter loss
------------------------------------------
Central Plaza Hotel Plc recorded third quarter net losses
of Bt29.24 million compared to a net profit of Bt38.78
million in the same period the previous year. According to
a filing to the Stock Exchange of Thailand, the company
recorded net profits of Bt35.14 million for the first nine
months of this year, compared to profits of Bt136.16
million over the equivalent period a year ago.  (The Nation  
20-Nov-1999)

PRIOR INDUSTRY: Restructure plan approved by court
--------------------------------------------------
Prior Industry Plc, the country's biggest manufacturer and
exporter of computer monitors, has won court approval to
revive its business.

The Central Bankruptcy Court yesterday accepted the plan
put forward by the Board of Investment-backed company.
Prior told the court that the baht's plunge in value in
1997 had sharply raised its costs, as it had to import raw
materials to make and assemble the monitors.

Since late 1997, Prior's creditor banks had stopped
extending loans as revolving capital, resulting in
financial problems. The company owes a total of 2.34
billion baht to 125 creditors comprising 75 local
businesses, 38 foreign, 11 financial institutions and one
general creditor.

Prior told the court it will ask creditors to reschedule
loans and accept a loss on investment as part of the
restructuring. Apart from raising new funds, it will invite
creditors to convert part of their debt into shares in
Prior. Under the plan, the company expects to repay all its
debts within 10 years.  (Bangkok Post  20-Nov-1999)

TANAYONG PLC: Accord reached on keeping BTSC control
----------------------------------------------------
Tanayong chief executive Keeree Kanjanapas yesterday won
the upper hand in his battle to keep control of Bangkok
Transit System Co (BTSC).

He will still own 51.05% of BTSC when the elevated train
system is launched on December 5, after persuading the BTSC
board to make a firm decision not to register Credit Suisse
First Boston as the owner of part of his firm's stake that
was auctioned on November 5. Mr Keeree said he had also
obtained 3.5 billion baht and had told CSFB that he would
pay the money to the company through Standard Chartered
Bank on November 24. This would clear outstanding debts to
CSFB and should prevent the firm from auctioning another
portion of Tanayong's BTSC stake on December 7, Mr Keeree
said.

"The scheduled auction must not take place," he declared.

Mr Keeree said he had filed a lawsuit against CSFB as a co-
defendant while suing Schroders International Merchant
Banking, which held the first auction, for damaging
Tanayong. His demand for compensation from the defendants
has increased to 16 billion baht from nine billion baht.
Tanayong, a property developer, had pledged 265 million
BTSC shares as collateral against loans from several
sources to finance the construction of the elevated railway
system, called BTS.

As Tanayong had been in arrears on payments, the creditors
represented by Schroders auctioned the 265 million BTSC
shares. CSFB, the only bidder, bought them for 14.20 baht
each. Mr Keeree had tried to block the auction. He filed a
lawsuit against the creditors, accusing them of damaging
his company. However, the court rejected his demand to
prevent the auction.

CSFB asked BTSC to register it as owner of the 265 million
shares. Kasame Chatikavanij, BTSC's chairman, said after
the company's board meeting yesterday that the board
decided not to register CSFB as a shareholder. He said CSFB
could not produce any evidence to show that it had legal
right to the shares.  A source on the BTSC board said a
decision to register CSFB could not be made because
Tanayong's current lawsuit could cause major complications.

"Tanayong had sent us a notice, warning that it would file
a lawsuit against us if we registered CSFB as a
shareholder. We decided to wait for the court to make a
final ruling first," the source said.

Tanayong separately owes another group of creditors,
represented by CSFB, some 3.5 billion baht against which it
had pledged 248 million BTSC shares as collateral. Mr
Keeree said the 3.5 billion baht he had obtained from
"Chinese friends" would clear that debt.  Mr Keeree claimed
that CSFB had tried to delay the payment by inviting him to
Hong Kong on Monday for "negotiations".

"But there is nothing to discuss, I will not go, and I will
transfer the money," he said.

According to the contract for the elevated electric train
system between BTSC and Bangkok Metropolitan
Administration, on the day the skytrain system is launched
Tanayong's holding in BTSC must be not less than 51%.
At first, it was feared that the first auction would dilute
Tanayong's holding to 28%, thus breaching the contract with
the BMA. And if auction planned for December 7 went ahead
and the 248 million shares were won by foreigners, it would
bring the total foreign holding in BTSC above the 49% limit
set by the Alien Business Law. However, foreigners could
hold shares through Thai nominees.

Mr Keeree said he had filed a lawsuit against Schroders
over the November 5 sale, as he considered the sole
participation of CSFB in the auction to be collusion with
Schroders.  Earlier, Theerachon Manomaipibul, deputy
governor of the Bangkok Metropolitan Administration, said
Mr Keeree had accompanied representatives of the Bank of
China and Shanghai Metro Co, an electric train operator in
China, to meet him.

He said the representatives of the Chinese firms told him
that they were interested in investing in the extension of
the BTSC route.  The metropolitan administration had
planned to extend the BTS route by adding three lines at a
total cost of about 35 billion baht.  The project had to be
scrutinised and approved by the National Economic and
Social Development Board.

However, the NESDB has deferred its decision until after
the BTS is launched as it fears that the BTSC share
ownership problem might cause problems for the new work.
The NESDB disagrees with the BMA on the need to extend
three routes, saying the Rama III route is not feasible as
the traffic is not heavy enough.  (Bangkok Post  20-Nov-
1999)

TPI POLENE: Creditors veto rehab plan
-------------------------------------
TPI Polene Plc, a major cement manufacturer and a
subsidiary of the Thai Petrochemical Industry group, is
likely to face a bankruptcy suit as the majority of its
creditors have rejected its debt restructuring plan.

The US$1.3-billion debt restructuring plan was rejected by
creditors holding 96.6 per cent of the total debt. Of the
company's 44 creditors, 32 owing a total of 36 billion baht
rejected the plan.  Six creditors representing 2.5% of the
total debt accepted it, while six others, representing 0.9%
of the debt, abstained.

Heading the objections of creditors were a lack of
transparency in soliciting a strategic partner and the
heavy "haircut" of 60 per cent sought by the debtor
company.  In addition, bank sources said the
recapitalisation of $180-200 million planned by TPI Polene
is also unclear in terms of use of funds.

TPI Polene proposed Heidelberger Zement (HZ) of Germany as
the strategic partner to hold 20 to 25 per cent of equity.
But it did not allow creditors to have direct contact with
the German firm.  Heidelberger is a major European cement
maker, which recently took over a Belgian cement firm.
About two months back, creditors approached Holderbank of
Switzerland to be the strategic partner for TPI Polene with
the intention of changing the management, currently led by
Prachai Leopairatana, according to bank sources.

TPIPL and its parent company Thai Petrochemical Industry
(TPI) have defaulted on debt payments for about two years.
Of the total of more than 60 creditors, 38 attended
yesterday's meeting to vote on the plan. Of these 38, 32
with a combined 96.6 per cent of the total debt of Bt51
billion voted against it.  A foreign bank official, who
requested anonymity, said a haircut (sharing of losses) of
60 per cent is too high and unfair to creditors after the
company stopped servicing its debt.

In addition, creditors wanted direct discussions with the
proposed strategic partner, Heidelberger, on its business
and debt payment plan to create confidence prior to
approving the debt restructuring.  Another Thai creditor
source said TPIPL did not specify whether the $180-200
million recapitalisation would be used to pay back debts or
buy back debts.

Bangkok Bank holds a Bt4 billion loan owed by TPI Polene,
while guaranteeing another Bt7 billion loan from KFW, while
Krung Thai Bank holds about 20 per cent of TPI Polene's
total debt.  Pornthip Kongsak, deputy director of the
Office of Corporate Debt Restructuring Advisory Committee
(CDRAC), said TPI Polene has to revise its plans on the
points objected to by creditors to gain better support at
the second vote scheduled for Dec 3.

If the plan is still rejected, it is up to the creditor
steering committee to decide whether the case will go to
the Bankruptcy Court for debt restructuring.  Meanwhile, Dr
Alain Missorten, TPI Polene's consultant on debt
restructuring, said a big problem of the debt restructuring
is the disagreement between the steering committee and the
company on the choice of a strategic partner.

While the company already has Heidelberger Zement (HZ), the
steering committee has been pushing for the company to
accept Holderbank as partner. Under the TPI Polene plan,
the strategic partner needs to inject US$180-200 million to
acquire approximately 25 to 35 per cent of equity.

"I don't know why the steering committee pushed very hard
for Holderbank to be our strategic partner. In fact,
Holderbank came to us two years ago, anyway, and chose to
be [in Siam City Cement], instead of us. Now it came again
but we already have other investors," he said.

He added that HZ as well as the Ssangyong group are global
cement players which would like to extend their markets,
through mergers and acquisitions, particularly in Southeast
Asia.  According to Missorten, on June 9, the steering
committee met two of the potential strategic investors
which were Ssangyong and HZ. Two months after the meeting,
the consultant said, the steering committee changed its
mind and suggested a new investor, Holderbank, in a bid to
boost its bargaining power.

"They also want us to give 15 per cent of the company's
shares but the company did not agree," he said.

He said HZ sent a letter of intent on Oct 10 to the
creditors of TPI Polene stating that it would like to
conduct the due diligence of the company. Ssangyong,
however, already sent a letter to TPIPL on Oct 11, saying
that it decided not to invest in the company since it was
unable to complete a debt restructuring agreement with its
creditors.  Another potential investor in TPIPL last year
was Cement of Mexico, but it failed to reach an agreement
with the company.  (The Nation, Bangkok Post  19-Nov-1999)


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