TCRAP_Public/991130.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 30, 1999, Vol. 2, No. 233


* C H I N A  &  H O N G  K O N G *

BAR CITY LIMITED: Facing winding up petition
CEVIN INTERNATIONAL LTD: Facing winding up petition
CREST (H.K.) CO.LTD.: Facing winding up petition
ELEGANT (H.K.)LTD.: Facing winding up petition
FOOK TAI CREDITS LTD.: Facing winding up petition
HELIOS FOOTWEAR INT'L HOLDINGS: Facing winding up petition
HUNG TO KNITTING FACTORY: Facing winding up petition
IDEASSOCIATES ASIA PACIFIC: Facing winding up petition
PALADIN: Posts huge annual loss
Q-TECH HOLDINGS: Posts large annual loss

* J A P A N *

HASEKO CORP.: Huge affiliate losses pull profits down
KANEMATSU CORP.: Posts six-month loss

* K O R E A *

DAEWOO GROUP: Bond guarantor willing to pay on bonds
DAEWOO GROUP: Foreign creditors,Gov't 25% apart on guaranty

* M A L A Y S I A *

PAHANCO CORP.: Rights issue in part for debt paydown

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

NATIONAL STEEL CORP.: Creditors begin asset auction
PHILIPPINE TEL. & TEL.: Creditor banks to test viability
PICOP RESOURCES: British partner arrives,debt paydown ahead
PILIPINO TEL.CORP.: Major creditor rehab okay due

* T H A I L A N D *

TELECOM ASIA: Supplier creditors block rehab plans
THAI PRESIDENT FOOD: Losses cause restructure of business
TOTAL ACCESS COMMO.: US bank to find strategic partner
UNITED COMMO.INDUSTRY: US bank to find strategic partner

C H I N A  &  H O N G  K O N G

BAR CITY LIMITED: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for January 26, 2000, on the
petition of Rodil, Veronica for the winding up of Bar City
Limited. A notice of legal appearance must be filed on or
before January 25.

CEVIN INTERNATIONAL LTD: 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
The Hongkong and Shanghai Banking Corporation Limited for
the winding up of Cevin International Limited. A notice of
legal appearance must be filed on or before December 7.

CREST (H.K.) CO.LTD.: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for January 26, 2000, on the
petition of Lee Sau Ying for the winding up of Crest (H.K.)
Co. Limited. A notice of legal appearance must be filed on
or before January 25.

ELEGANT (H.K.)LTD.: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for January 12, 2000, on the
petition of Dai-Ichi Shoji Company Limited for the winding
up of Elegant (Hong Kong) Limited. A notice of legal
appearance must be filed on or before January 11.

FOOK TAI CREDITS LTD.: 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 Land Property Company Limited for the winding
up of Fook Tai Credits Limited formerly known as Man Sun
Finance (Hong Kong) Limited. A notice of legal appearance
must be filed on or before December 21.

HELIOS FOOTWEAR INT'L HOLDINGS: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for January 12, 2000, on the
petition of Lo May Yin for the winding up of Helios
Footwear International (Holdings) Limited. A notice of
legal appearance must be filed on or before January 11.

HUNG TO KNITTING FACTORY: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for December 29 on the petition of
Chan Man Wah for the winding up of Hung To Knitting Factory
Limited. A notice of legal appearance must be filed on or
before December 28.

IDEASSOCIATES ASIA PACIFIC: 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
Kwok Shu Wing for the winding up of Ideassociates Asia
Pacific Limited. A notice of legal appearance must be filed
on or before December 21.

PALADIN: Posts huge annual loss
Polyester trading and property investment holdings company
Paladin continued to haemorrhage a massive loss of $216.16
million in the year ended 30 June 1999.

This follows a loss of $189.11 million in the previous
year. Exceptional items amounting to a total of $76.61
million were cited as the reason for the losses.  The
exceptional items include a $44.42 million provision for
obsolete inventories and a $32.19 million provision for bad
and doubtful debts.

The board of directors said turnover had dropped sharply by
85 per cent from $333.29 million in 1998 to $49.02 million
this year.  Of this turnover, $45.77 million was accounted
for by the company's trading in polyester textured yarn.
This brought in a gross loss of approximately $34.99

Paladin, which started off in property development, general
trading and trading in listed securities, has in recent
years been involved in the design and production of fashion
sportsware on the mainland, Paladin acting chairman Law
Fong said.  Its principal investment remains the luxury
Bowen Hill Apartments on Peak Road, which before demolition
consisted of two 7-storey residential blocks.  This site is
currently under redevelopment, which, according to the
board, is progressing according to schedule with site
formation completed and building work in progress according
to plan.

Mr Fong said that according to latest estimates the
redevelopment "will practically be completed by late 2000"
and "will hopefully bring profit."

Loss of rental income from the apartments has been a major
factor in the company's losses in recent years.  Apart from
yarn, the company's active business also comprises
restaurant operation, which contributed approximately $3.25
million to its turnover this year.  Paladin has been
posting losses attributable to shareholders every year
since 1992, apart from 1995 when it recorded a one-off
profit of $14.65 million.

Loss per share this year was calculated at 40.9 cents,
based on the loss attributable to shareholders being
divided by the 528,271,615 ordinary shares in issue during
the year.  For the third consecutive year no dividend was

Paladin gained notoriety in 1995 when its former chairman,
James Oung Da-ming, was jailed for 42 months for his role
in a Taiwanese stock scam.  The company's annual general
meeting will be held at the Excelsior Hotel on 30 December.
(Hong Kong Standard  29-Nov-1999)

Q-TECH HOLDINGS: Posts large annual loss
Computer distributor Q-Tech Holdings recorded a huge
reversal with a net loss of $188.3 million for the year
ended 30 June 1999, compared with profits of $40.14 million
in the same period last year.

Substantial provisions for bad and doubtful debts owed by
mainland customers were cited as the principal reason for
the losses this year.

"The group experienced a significant slowdown in the
settlement of its accounts receivable and a provision for
bad and doubtful debts of about $152 million has been
made," Q-Tech chairman Chan Tak-hung said.

Q-Tech recorded a turnover of $232.4 million for the year
to 30 June, representing a 71.4 per cent slide from its
previous results in fiscal year 1998.  Although it only
recorded a small operating loss of $1.2 million for the
year to 30 June 1999, the results were seriously worsened
by a large exceptional loss of $185.4 million, including
the $152.5 million provision for bad and doubtful debts.

He said that the Asian financial turmoil beset the group
with a very difficult business environment and it has
experienced significant bad and doubtful debts arising from
its customers on the mainland.  Q-Tech initially engaged in
distribution of brandname audio-visual products, air-
conditioners and electrical appliances as well as other
similar products not covered by distribution agreements.

Its distribution agreements with Daewoo Electronics,
Toshiba Corporation and Samsung Electronics, however,
expired or were terminated in the fiscal year 1999.  In
March, Q-Tech signed a one-year non-exclusive agreement
with Thakral Corporation (HK) to distribute electrical and
electronic products, mainly audio-visual, on the mainland.
It has commenced trading of computer mainboards, computer
monitors, computer keyboards and computer accessories to
bring more business opportunities.

The group has streamlined its manpower to a significant
scale and has accomplished its cost controls over various
general and administrative expenses, Mr Chan said.  He also
said that as of 30 June 1999, Q-Tech had net current
liabilities of $18 million.

"The group is currently under negotiations with the bankers
to reschedule the group's bank indebtedness and to seek
their ongoing support to the group. In the meantime, the
group remains dependent upon the continued support of
bankers."  (Hong Kong Standard  29-Nov-1999)


HASEKO CORP.: Huge affiliate losses pull profits down
Major condo builder Haseko Corp. (TSE:1808) posted 3
billion yen in interim net profit, despite 47 billion yen
in extraordinary loss to cover aid to troubled affiliates
and latent losses on disposals of real estate.

Debt waivers from creditor financial institutions
contributed to extraordinary profit of 46.5 billion yen in
the six months ended Sept. 30, helping the company
turnaround from a net loss of 3.9 billion yen a year
earlier.  Sales plunged 30% year on year to 95.7 billion
yen after orders were hit by concern about the company's
financial health in the previous fiscal year. Pretax
profit grew 14% to 3.5 billion yen due to 2 billion yen in
nonoperating profit.

For the full term through March, Haseko expects its
extraordinary loss to rise to 198 billion yen to cover
increased financial aid to group firms in the second half.
But further debt waivers by financial institutions and the
sale of its head office should provide extraordinary profit
of 195 billion yen, enabling it to break-even on net
balance, company officials said.  Pretax profit is expected
to plunge 59% to 4.6 billion yen on sales down 31%
to 253 billion yen.  

The company earlier struck an accord with creditor
financial institutions, including Daiwa Bank (TSE:8319) and
Industrial Bank of Japan (TSE:8302), calling for debt
waivers totaling 191 billion yen in fiscal 1999 and 163.6
billion yen in fiscal 2000.  (Asia Pulse  26-Nov-1999)

KANEMATSU CORP.: Posts six-month loss
Kanematsu Corp. posted a consolidated net loss totaling 2.8
billion yen in the fiscal half ended Sept. 30, compared
with an 800 million yen loss a year earlier, the major
trading house announced Thursday.

Debt waivered by creditors totaling 80 billion yen was not
enough to cover a midterm group pretax loss of 5.3 billion
yen and an extraordinary loss of 77.6 billion yen. The
offer to forgive debt was made by Bank of Tokyo-Mitsubishi
(TSE:8315), Dai-Ichi Kangyo Bank (TSE:8311) and Norinchukin
Bank.  The extraordinary loss stemmed largely from 22
billion yen in special retirement benefit funding and 49
billion yen in expenses from the restucturing of loss-
making affiliated firms.

"During the half year, we covered nearly half of the 200
billion yen in extraordinary losses that are expected to
appear in our books in the future, including this fiscal
year," said President Tadashi Kurachi.

Interim group sales declined 39%, hit by a fall in sales at
the company's six divisions, including textiles, machinery
and electronics.  For the full term through March,
Kanematsu expects group pretax profit totaling 1.8 billion
yen, compared with a loss of 7.5 billion yen in fiscal
1998. It forecasts a group net loss of 1.3 billion yen,
against a loss of 41.5 billion yen the previous year.
(Asia Pulse  26-Nov-1999)


DAEWOO GROUP: Bond guarantor willing to pay on bonds
Seoul Guarantee Insurance Co., the guarantor of bonds
issued by Daewoo Group units, is willing to pay off part of
the group's maturing bonds, a company official said

"The basic policy of Seoul Guarantee Insurance is to pay
off around 5 trillion won worth of Daewoo bonds in place of
Daewoo firms when they mature," the official said.

The figure amounts to 70 percent of the 7.4 trillion won
($6.38 billion) worth of bonds the insurance company
guaranteed.  After consultation with financial institutions
holding Daewoo bonds, the insurance firm plans to refund
the remaining 30 percent, the official said. Refunding
refers to the issuance of new bonds to pay off an existing
bond issue.

The payment of the guaranteed bonds by Seoul Guarantee
Insurance has been the most contentious issue in the
conclusion of the debt-workout programs for Daewoo's 12
units.  The official added that, as for the payment of 2
trillion won interest on the bonds, the insurance company
plans to pay the lower market interest rate, now the coupon

Institutions holding Daewoo bonds will then be forced to
accept the lower interest rate showing that all parties
involved with the Daewoo Group will have to share the
burden of the sinking conglomerate's losses, he said.
Seoul Guarantee Insurance also said the government should
phase in the injection of public funds needed to pay off
the Daewoo bonds since they mature between 1999 and 2002.

The insurance company had earlier said that it could not
pay off Daewoo's guaranteed bonds in place of the issuers
as it might endanger the firm's liquidity position.  If
Seoul Guarantee Insurance takes responsibility for only 70
percent of Daewoo's guaranteed bonds, investment trust
companies (ITCs) and other financial institutions holding
Daewoo bonds are expected to suffer losses amounting to 2.4
trillion won - the principal on the remaining 30 percent
plus the spread between coupon and market interest rates.

Local ITCs, however, insist that Seoul Guarantee Insurance
should pay off Daewoo bonds in their entirety since they
are the assets of their customers. (Korea Herald  29-Nov-

DAEWOO GROUP: Foreign creditors,Gov't 25% apart on guaranty
The financial authority is considering to impose a 75
percent loss ratio for Daewoo Group's foreign creditors,
far greater than the 50 percent suggested by the overseas
banking community.  In response to the foreign creditors'
request that the government pay for 50 percent of their
loans in Daewoo, the Financial Supervisory Service said
Seoul is ready to take over only 25 percent of the total

Kim Young-jin, chief of the FSS' international supervisory
department, told The Korea Times that Daewoo's foreign
creditors will have to assume a similar level of losses as
domestic creditors, adding there will be no preferential

"A loss ratio of 50 percent is not enough. They need to be
prepared to make higher sacrifices," Kim said during a
phone interview.  "For local banks, the expected loss ratio
is over 75 percent. The financial authority is considering
no preferential treatment for foreign banks," said the FSS
official who is in charge of rescheduling Daewoo's overseas
liabilities, meaning that 75 percent is also going to be
the loss ratio suffered by foreign lenders.

The senior FSS official added that Korea Asset Management
Company will take over the remaining portion of Daewoo's
overseas debts, assuming that the international banks
accept the higher ratio.  Assuming a loss ratio of 75
percent, the asset management company will require around
$1.25 billion (1.5 trillion won) to take over a quarter of
Daewoo's $5 billion foreign debts.

Under the worst case scenario of Daewoo Corp. being placed
under court supervision, the foreign community will receive
no share at all, Kim said, adding that overseas lenders
must take a reasonable approach.  Meanwhile, foreign
creditors generally agreed to accept the 50 percent loss,
assuming that the government assumes the remaining amount.

"The foreign banks are willing to accept 50 cent forgive
(50 percent loss) from Daewoo as long as the government
promises to pay for the remainder," a foreign banker said.
"It will be a win-win solution which will satisfy all
involved parties. The foreign creditors' hands off Daewoo
will enable the government and local banks manage the
situation without any obstacles from the international
financial community."

For foreign banks it is against their business regulations
to go along with policies like debt-to-equity swaps because
converting their debts into shares means a status change
from lender to investor.

"Foreign banks are different from domestic lenders. It is
practically not feasible for us to change our status from a
lender to an investor in Daewoo," he said.

To justify their demand for preferential treatment, the
foreign banker mentioned the case of Korea Development
Lease Company (KDLC).  During the workout of KDLC, the
government offered a loss ratio of 27 percent for overseas
lenders while domestic banks suffered 30 percent damages.
For the remaining non-collateral foreign debts of the KDLC,
the government offered the same treatment as local banks'
collateral loans.  (Korea Times  29-Nov-1999)


PAHANCO CORP.: Rights issue in part for debt paydown
Pahanco Corp has proposed a renounceable rights issue of up
to 13.922 million new shares of RM1 each with 13.9222
million free detachable warrants on the basis of two new
shares and two warrants for every three shares held at an
issue price of RM1 a share.

The actual number of right shares to be issued can only be
determined in the future after taking into consideration
the outstanding options granted for a total of 1.258
million shares pursuant to the company's employees share
option scheme which remains unexercised.  The proceeds of
RM13.99mil to be raised from the proposed rights issue will
be utilised to repay bank borrowings, for working capital
and to defray expenses relating to the proposals.  (Star
Online  29-Nov-1999)


NATIONAL STEEL CORP.: Creditors begin asset auction
Creditor banks have declared the heavily-indebted steel
giant National Steel Corp. in "total-debt" default and
initiated an out-of-court auction of its assets worth P30

A source familiar with the banks' foreclosure proceedings
said over the weekend that an extra-judicial sale notice
would be issued, hence kicking off the auction of all the
properties owned by National Steel.  Under the law, the
creditor-banks should first obtain so-called extra-judicial
rights to foreclose mortgaged assets of the company, issue
a notice of extra-judicial sale in at least three major
newspapers prior to official actual auction. The start of
the sale of National Steel assets is Dec. 22.

The source ruled out any last-ditch attempt to stop the
sale because National Steel was in total debt default. The
source said the possibility of any group obtaining a
temporary restraining order from any court was "zero".

"Hindi na mapipigilan ang auction kasi Malabo na makakuha
ng TRO ang any group," said the source. "Wala nang court na
mag-i-issue ng TRO kasi NSC is in default," the source

Based on its financial statements, National Steel has a
total liability P15 billion inclusive of interest charges
and its loan collateral ratio is 2:1.  Besides the
creditor-banks, Cathay Pacific Steel Corp. (Capasco), owned
by the family of businessman and Presidential Adviser for
Iron and Steel John Ng, is said to be interested in buying
National Steel lock, stock and barrel. A consortium of
steel makers is also poised to bid for National Steel.
Capasco is only waiting for foreclosure procedures by
creditor banks so it could bid for the company.

According to the source, the asset sale would leave
National Steel with nothing. Plans to spin off another
steel firm from the National Steel's assets are afoot, but
its structure is uncertain.  The creditors initiated last
week foreclosure proceedings against National Steel's
mortgaged assets amounting to P10 billion. The Regional
Trial Court of Iligan City handled this case.

The Philippine National Bank, the creditor bank with the
largest loan exposure in the steel firm, led the
foreclosure proceedings. The Land Bank of the Philippines,
Allied Banking Corp., and Westmont Bank have also filed a
suit against National Steel.  The banks filed a 12-page
petition "to secure, partially or otherwise, the payment of
certain credit accommodations granted by the secured
creditors" on the basis of the mortgage trust indenture
deal signed by National Steel with the banks.

A mortgage trust indenture is a contract that consolidates
all the company's assets used as collateral for its debts;
it also facilitates foreclosure once the borrower defaults.
The management of National Steel are still scouting for new
investors to put in the estimated $130 million needed to
revive National Steel.

The foreign investors reported talking with National Steel
are Ispat International of Kuwait and Malaysia-based
Duferco.  National Steel also owes Far East Bank and Trust
Co., Rizal Commercial Banking Corp., Republic of the
Philippines-Japan Export-Import Bank, and National
Development Co.   (Manila Times  29-Nov-1999)

PHILIPPINE TEL. & TEL.: Creditor banks to test viability   
Creditor banks of Santiago-owned Philippine Telegraph &
Telephone Co. (PT&T) have given auditing firm Sycip,
Gorres, Velayo & Co. (SGV & Co.) until December 10 to
assess if the debt-ridden listed firm is still viable, a
BusinessWorld source said.

PT&T, which has nearly seven billion Philippine pesos
(US$171.6 million at PhP40.789:US$1) in debts, has not been
servicing debt obligations for more than a year now, the
source said, although the loans have been guaranteed by
parent firm Republic Telecommunications Holdings Corp.

"Technically, PT&T's debts are much bigger than capital...
If banks foreclose on the guarantee, they get to control
the assets... and own the three companies," the source

Aside from PT&T, other Retelcom subsidiaries are Capitol
Wireless, Inc. (Capwire) and Philippine Wireless, Inc.
(Pocketbell). The other two companies are likewise
negotiating with respective creditor banks for
restructuring of debts. Pocketbell has about PhP2 billion
($50 million) in loans while Capwire has PhP700 million
($17.2 million) in unpaid obligations.

The source added banks will also end up owning PT&T's
franchise if they call in Retelcom's guarantee. "They could
sell the franchise," the source said.  PT&T has been
negotiating for a restructuring of its debts. Earlier
rehabilitation proposals were thumbed down by creditors, as
they hinge on the infusion of fresh capital.  PT&T has been
scouting for an investor, but is having a hard time finding

US-based telephone supplier Qualcomm earlier backed out as
a prospective investor after it was acquired by Swede
telecommunications equipment maker Ericsson AB.  Qualcomm
was supposed to infuse $35 million into the beleaguered
listed company, $10 million of which were allotted for debt
payments and the remaining for capital expenditure, another
source said.

Under the proposed rehabilitation plan submitted to
creditor banks last June 23, PT&T will source about $12
million in fresh funds from an investor. The amount will be
used to pay half of the past due interest payments, which
have summed up to PhP838 million ($20.5 million), the
source said.  After posting PhP662.9-million ($16.2
million) net loss for this fiscal year, PT&T sees a
turnaround by 2003, although this is hinged on the proposed
debt restructuring plan.

At the sidelines of the company's stockholders' meeting
last Friday, PT&T president and chief executive officer
Marilyn E. Santiago told reporters they are looking at a
PhP100-million ($2.4 million) profit in three years. She
said the company based revenue projections on conservative

"We based it on historical patterns ... we have considered
growth potentials based on our conservative data, including
the last two years with which we felt some economic
pressures," said Ms. Santiago.

The reported PhP662.9-million net loss for this fiscal
year, which ended June 30, is 18.8% higher compared with
last fiscal year's loss of PhP557.9 million ($13.7
million). Provisions for doubtful accounts comprise the
bulk of the PT&T's operating expenses at PhP410.3 million
($10 million) from only PhP162.8 million ($4 million) a
year ago.  PT&T, in its annual report, said allowance for
doubtful accounts is maintained at a level considered
adequate by management to provide for potential
uncollectibility of receivables.

One of those considered "uncollectible" is the around
PhP300-million ($7.4 million) long distance revenues from
104-1 used by Philippine Long Distance Telephone Co. (PLDT)
subscribers.  The company said interconnection dispute with
Smart Communications, Inc. costs them additional expenses.
With the linkup problem, PT&T re-routes telephone calls to
PLDT lines, which costs more than sending the call directly
to Smart.

The dispute started with discrepancies in access charges,
where Smart is asking PT&T PhP80 million ($2 million) while
PT&T claims it owes Smart PhP43 million ($1 million) in
access charge. The companies are still negotiating on the
matter.  (Business World  29-Nov-1999)     

PICOP RESOURCES: British partner arrives,debt paydown ahead
Listed paper and timber products producer Picop Resources,
Inc. has reportedly tapped British-based Commonwealth
Development Co. (CDC) as partner for its 2.7-billion-peso
(US$66.2 million at PhP40.789:US$1) paper division which is
being spun-off by the company.

A BusinessWorld source said Picop's new partner is seen to
bring in between PhP750 million ($18.4 million) and PhP1
billion ($24.5 million) in fresh capital, making CDC a 35%-
owner of the paper company.  Based on the agreement, the
British firm will be issued a five-year, 9% convertible
notes in exchange for 30% to 35% of the new paper firm.
Picop reportedly plans to use 50% of the proceeds to retire
PhP1.3-billion ($31.9 million) worth of consolidated debts.

Picop will also keep its "high-yielding" timber operations
once the sale of its paper operations proceeds. As much as
65% of Picop's gross profit comes from the company's timber
business. The firm also plans to allot PhP150 million ($3.7
million) for capital expenditures next year.  Picop posted
a net loss of PhP25.27 million ($620,000) as of the third
quarter of the year, 76% lower than the PhP105-million
($2.6 million) loss registered in 1998, citing improvements
in the paper and timber businesses.

Likewise, substantial gains were achieved in fiber cost,
power and services utilization efficiency. The company
likewise obtained savings from lower interest rates this
year, 23% lower PhP58 million ($1.4 million) from PhP75.9
million ($1.9 million) as of the first nine months of last
year, the company said in a report to the Philippine Stock
Exchange.  (Business World  29-Nov-1999)

PILIPINO TEL.CORP.: Major creditor rehab okay due
First Pacific Group chairman Manuel Pangilinan said
yesterday that time was nearly running out for Marubeni
Corp, a major creditor of its financially troubled mobile
phone arm Pilipino Telephone Corp (Piltel), to respond to
its proposed debt plan.

Mr Pangilinan is also chairman of the First Pacific-owned
Philippine Long Distance Telephone Co (PLDT) which in turn
controls Piltel.  Marubeni's nod is crucial because
Piltel's debt restructuring was made a precondition for the
entry of Japan's Nippon Telegraph and Telephone Corp (NTT)
into PLDT, the country's largest telecommunications firm.

Piltel owes a third each of its 34.9 billion peso (HK$6.64
billion) debt to Marubeni, banks and bondholders. Piltel's
creditor banks signed a memorandum of agreement last month
on a debt restructuring plan.  Marubeni wants to get a PLDT
guarantee on Piltel's debt before agreeing to the
restructuring, Mr Pangilinan said.

"They want to get repaid. Where will you get that money?
That's a huge amount of debt that PLDT will have to pay
for," Mr Pangilinan said.  (Reuters, Hong Kong Standard  


TELECOM ASIA: Supplier creditors block rehab plans
Telecom Asia's (TA) debt restructuring plans have been
blocked by its supplier creditors after the details of the
plan were disclosed.

A source at TA's creditor bank said the company's debt
restructuring plan is unlikely to be completed by the year-
end as originally planned, saying the main stumbling block
is creditors' disagreement on the procedure of the
restructuring.  On October 2, creditors, including
suppliers, had agreed in principle to restructure TA's debt
through capital injection and acquisition of TA's debts at
a 50-60 percent discount by Korea First Bank (KFW).

"However, supplier creditors then changed their mind and
are now demanding higher repayment value for TA's debts.
The negotiations had been ended without creditors reaching
an agreement," the source said.

The same source also said that after last week's meeting
among TA's creditors, the debt restructuring timeframe had
been extended, possibly until mid- 2000. The extension
however, will not affect the company's operations.

"It is difficult to be specific about exactly when the debt
restructuring plan would be agreed but it is expected to be
ready by mid 2000," the source said.

TA is not alone in experiencing opposition from supplier
creditors as several large corporations have also had their
debt reform plans held up because of disagreement by
suppliers, the source said.  The process of debt
restructuring is very much in need of government
intervention to speed up the process to prevent supplier
creditors from not honoring their agreements.  Also, last
May foreign creditors blocked the progress of TA's debt
restructuring plans despite support from local lenders.
(Business Day  29-Nov-1999)

THAI PRESIDENT FOOD: Losses cause restructure of business
Thai President Food (TF), the producer of "Mama" noodles,
is restructuring its business operations by dumping its
dairy business and reducing the registered capital of its
drinking water business, according to the company

TF President Pipat Paniangvait said Phuping Dairy Products,
TF's milk producer subsidiary, has experienced heavy losses
and TF plans to let Bangkok Bank (BBL), the company's only
creditor, to decide on the fate of the company. TF is in
negotiations with BBL to decide on the future of the dairy
company which is still operating normally.  TF's drinking
water business is also in a shaky situation, but is
manageable, he said, adding that after TF balances the
books and reduces its registered capital by 136 million
baht the company plans to seek alliances to co-invest in
the drinking water unit.

Based on sales of 3.1 billion baht during the first nine
months, TF predicted sales of 4.2 billion baht by year-end,
generating a net profit of 380 million baht or 7 percent
growth compared to last year, he said.  Pipat also
predicted sales growth of 5 percent for next year as noodle
sales have been unaffected by the recession and had been
returning a favorable profit. In addition, this year TF'
market share of noodle sales had increased 10 percent in
the 8-billion baht market.

"In addition, TF is planing a joint venture with a Burmese
investor to open a noodle factory in Burma with investment
of between 60-80 million baht and is to start operating by
end of 2000," Pipat Said.

Moreover, TF is also reviewing its investment policy in
China.  (Business Day  29-Nov-1999)

TOTAL ACCESS COMMO.: US bank to find strategic partner
UNITED COMMO.INDUSTRY: US bank to find strategic partner
Credit Suisse First Boston, a US investment bank, has taken
a decisive role in shaping the fate of ailing telecom firm
United Communication Industry (Ucom), and is now taking the
lead in talks for a strategic partner for Ucom's mobile
phone arm Total Access Communication Plc (TAC).

Though CS First Boston has a long relationship with
Boonchai Bencharongkul, chairman of Ucom's board, and
Poosana Preemanoch director of TAC, the investment bank is
not represented in either the shareholders or the creditors
of the two companies.  CS First Boston's precise role in
Ucom's empire is not clear, but sources in the banking
industry speculate the investment bank is acting as a
representative of Somers, a UK investment bank that with a
36-percent stake is one of two major shareholders of Ucom.
The other major shareholder is the Bencharongkul family,
the company's founder which owns a 26 -percent stake in the
telecom firm.

The public is probably familiar with the name CS First
Boston, since its is one of the major lenders of the
controversial of Bangkok Transit System Co (BTSC), the
operator Bangkok's elevated train.  An industry source,
however, said CS First Boston is believed to be the
mastermind behind Somers' share acquisition in Ucom, which
is one of its huge investments in Thailand.

It is not known whether CS First Boston has an interest in
Somers or only works as its investment advisor. However, in
the current scenario, the US bank has taken a leading role
on behalf of Somers in negotiations between Total Access
Communication Plc (TAC) and possible strategic partners.
There have been questions about Somers' real identity and
who its real owner is.  TAC is 68 per cent owned by Ucom.
The company is seeking a strategic partner to enhance its
business operation for competing with its arch rival,
Advance Info Service (AIS), the largest mobile phone

The relationship between Ucom and Somers began when the
former purchased a minor stake in the latter two years ago,
replacing Ucom's then-business partner Motorola Inc.
Somers won a substantial share in Ucom when the telecom
company pushed through a US$500-million debt-restructuring
plan in the first quarter this year.  Somers at that stage
purchased US$120-million in Ucom's debt from lenders and
then converted the debt to equity at Bt22 per share.

In the middle of this year, rumours spread that Somers
established a new company to purchase a stake in TAC during
its 26.4-million share private placement in the European
market.  TAC offered its shares at US$2.60 per share and
gained a total of US$68 million from the placement.  A
foreign banker source said executives in Ucom and the
Bencharongkul Family are secretively holding stakes in

"It is CS First Boston which financed them in buyinga stake
in Somers," said the foreign banker source.

But Boonchai Bencharongkul, chairman of Ucom, dismissed
that notion. He said Somers will hold a stake in Ucom only
temporarily, waiting for the right time to sell its shares.
Boonchai said Somers has plenty of investments in the other
business in Thailand, suggesting that Somers ownership in
Ucom is a normal business practice. However, he declined to
specify the names of the other investments.

The foreign bank source said investment banks know CS First
Boston is the de facto representative of Ucom at the
negotiation table between TAC and its possible strategic
partners.  The terms of partnership with TAC require the
new partner to buy new shares in TAC and some of Ucom's 68-
per cent share in TAC as well and all of Somers' stake in
Ucom. The terms indicate that TAC's new ally will have to
be a new partner of Ucom and at the same time replacing

As a result, TAC has yet to secure a partnership contract
until now, since no company is likely to meet these
complicated conditions.  Another possible reason Somers may
feel like prolonging the negotiation of an alliance deal is
that Ucom's stock price is sitting at Bt20 a share, lower
than when Somers brought Ucom shares at Bt22 each.

The foreign banker source said the tangled conditions and
the complicated overall picture of Ucom discourage possible
partners to conclude a deal with TAC.  TAC has had several
rounds of partnership talks with many foreign companies,
for example, Singapore Telecom, British Telecom, Telenor
and Bell Canada.  But a telecom analyst said that overseas
telecom operators are still interested in an alliance with
TAC, due to its strong financial liquidity, its broad
subscriber base of one million and the low penetration rate
of mobile phone users in Thai market at 3.5 per cent.

"The most crucial factor is that TAC is the only local
mobile phone operator without a foreign partner at this
time," said the analyst.  (The Nation  29-Nov-1999)

S U B S C R I P T I O N  I N F O R M A T I O N

Troubled Company Reporter -- Asia Pacific is a daily
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Copyright 1999.  All rights reserved.  ISSN: 1520-9482.

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