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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

               Wednesday, December 1, 1999, Vol. 2, No. 234

                                    Headlines


* K O R E A *

DAEWOO CORP.: Creditor-union conflict impeding workout
DAEWOO ELECTRONICS: $259M foreign write off to be asked for
DAEWOO GROUP: Loss ratio at crux of settlement possibility
DAEWOO MOTOR CO.: Creditor-union conflict impeding workout


* M A L A Y S I A *

KEMAYAN CORP.: Finishing rehab plan to give to SC


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

NATIONAL STEEL CORP.: Gov't wants to recover stake


* T H A I L A N D *

BANGKOK METROPOLITAN BANK: BOT legal action ahead           
CREDIT AGRICOLE INDOSUEZ: BOT legal action ahead          
EKKAPARK CO.: BOT legal action ahead
INT'L ENGINEERING: Ordered to cough up cash
MK REAL ESTATE DEVEL.: SET finds accounting improprieties
NAKORNTHON BANK: BOT legal action ahead
RADANASIN BANK: Transfers ailing assets as UOB takes over
RUAM BORIHARN THURAKIT CO.: BOT legal action ahead
SUN TECH GROUP: Posts annual loss
THAI NAM PLASTIC: Directors approve rehab plan
TUNTEX (Thailand) PLC: Negotiates loan repayment delay


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

DAEWOO CORP.: Creditor-union conflict impeding workout
DAEWOO MOTOR CO.: Creditor-union conflict impeding workout
----------------------------------------------------------
The workout plans for Daewoo Motor and the construction
division of Daewoo Corp. could face a stalemate because of
rising conflict between the creditor groups and Daewoo
labour unions.

An umbrella group representing Daewoo subsidiary unions
said Monday that the Korea Development Bank, Daewoo Motor's
major creditor and Korea First Bank, the major creditor of
Daewoo Corp's construction division, have rejected a letter
of consent to the workout plans submitted by the unions.
The union body said the two banks objected to a sentence in
the letter which specifies that the creditors must obtain
the agreement of the unions on revisions to employment
contracts and wages. The creditors demanded that the
sentence be revised to require creditors to consult with
the unions only, not obtain their approval.  (Digital
ChosunIlbo  30-Nov-1999)

DAEWOO ELECTRONICS: $259M foreign write off to be asked for
-----------------------------------------------------------
Domestic creditors of Daewoo Electronics Co. (DEC) will ask
the company's foreign creditors to write off debts of
around 300 billion won ($259 million) if they want to
participate in the recently finalized workout plan for the
electronics maker, a creditor bank official said yesterday.

Domestic creditors will make the request to their foreign
counterparts in a session of negotiations with them today,
he said. Officials of the Corporate Restructuring
Coordination Committee and the Daewoo Group are also to
attend the talks.  The domestic creditors want the 60
foreign creditors to grant the debt write-offs through
debt-for-equity swaps and interest rate cuts if they wish
to participate in the rehabilitation program, he said.

If foreign creditors want early repayment of their loans to
DEC instead of participating in the workout, they should
write off 350 billion won or more, the official contended.
DEC owes foreign creditors 900 billion won, which breaks
down into 100 billion won in loans and 800 billion won in
loan guarantees.

The company, which owes a total of 6.3 trillion won to
domestic and foreign creditors, is estimated to go back on
track if loans of 2.5 trillion won are written off,
according to the outcome of a recent due-diligence audit.
Last Wednesday, DEC's domestic creditors finalized a debt-
workout plan for the electronics unit of the troubled
Daewoo Group, highlighted by a huge debt-for-equity swap.

Under the workout program, domestic creditors will swap
DEC's debts of 1.46 trillion won ($1.25 billion) for
equities equivalent to 394.7 billion won worth of common
stock and 1.0653 trillion won worth of convertible bonds.
DEC will also be allowed to defer the payment of principal
on its remaining debts until 2004, while creditors will
grant interest rate cuts on the firm's remaining debts.

The creditors will apply an interest rate amounting to the
prime lending rate plus 1 percentage point to their
collateralized loans to DEC, while an annual 1 percent
interest will be imposed on loans without collateral till
the end of 2002.  Between 2002 and 2004, the interest rate
on the loans not backed by collateral will amount to the
prime lending rate plus a spread of 2 percentage points.

In addition, the rehabilitation program calls for a capital
reduction for DEC, while the steering committee of DEC's
creditors will determine the capital reduction ratio.
(Korea Herald  01-Dec-1999)

DAEWOO GROUP: Loss ratio at crux of settlement possibility
----------------------------------------------------------
At present the loss ratio seems to be the key in settling
Daewoo Group's more than $5 billion foreign liabilities.
The Korean government and Daewoo's foreign creditors in
principle agreed to the view that Seoul's takeover of a
portion of the group's overseas debts is the only practical
solution.

But the major difference still remains in that the loss
ratio has not been decided.  Or to be more precise, the gap
between the two sides is too wide.  The financial authority
and domestic creditors reaffirmed their position during the
meeting at Daewoo headquarters yesterday that Daewoo
Corp.'s foreign creditors should take around a 75 percent
cut.

"We have come to an agreement to propose 75 percent losses
to Daewoo Corp.'s overseas lenders. Korea Asset Management
Company (KAMCO) will take over the remaining," said a local
banker following the meeting.  "Still the two sides need to
workout the detailed procedure for KAMCO's takeover once
the ratio is agreed."

The government and local creditors believe that it is an
appropriate loss ratio for Daewoo Corp.'s foreign
liabilities which is based on the preliminary due diligence
report.  They anticipated that foreign banks will
eventually accept a similar ratio, as it is a better option
for them than forcing Daewoo Corp. into court receivership.
With a loss ratio of 75 percent, the asset management
company will need around $1.25 billion (1.5 trillion won)
to purchase a quarter of Daewoo Corp.'s $5 billion foreign
debt.

The major foreign creditors, on the other hand, argued that
they are willing to take around 50 percent of the losses
from Daewoo loans, assuming that KAMCO purchases the
remainder.

"We can not say anything until we see the numbers. The
analysis of Daewoo Corp.'s cash flow is incomplete, at
least for foreign banks," an Asian banker told The Korea
Times.  "However, the loss ratio of 75 percent is
unacceptable. We are not willing to give up more than half
of our total exposure."

As there is no consensus among foreign creditors, others
were more critical of the government policy, saying that
many foreign banks are not prepared to take such a cut.

"We have never considered giving in to the Seoul authority.
Under the worst case scenario, we will go separate ways and
take legal action," said a European banker.  "Again, this
is not a simple case where one can easily talk about the
loss ratio. We need to wait until we have all available
information in our hands."

Meanwhile, the government and foreign banks are scheduled
to meet today at Daewoo headquarters to reach a compromise
on the loss ratio.  The two sides will face each other
again for the first time, following the confirmation of
workout plans.  (Korea Times  30-Nov-1999)


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

KEMAYAN CORP.: Finishing rehab plan to give to SC
-------------------------------------------------
Kemayan Corp Bhd is in the final stage of submitting its
corporate restructuring proposals to the Securities
Commission (SC) and will be ready to take on new challenges
thereafter.

Its president and chief executive officer Datuk Rickie Tang
said the group's original plan to submit the proposals by
the end of the month had been delayed due to the general
elections.

"It is a painful experience for us but the majority of the
company's shareholders have agreed to the restructuring for
their own benefit," he told Star Business after the company
AGM yesterday.

Tang said the proposed exercise included a rights issue of
RM72mil to be completed before June next year and to
convert RM1.3bil of loans and debts into shares and loan
stocks.  He said after the completion of the exercise, the
group would focus on property development such as
construction as its core business. It would also develop on
its existing landbank.  Tang said it had decided to focus
on the property sector which was recovering in tandem with
the country's economic recovery.

"The group will be well-positioned to benefit from the
positive trend," he said.

Tang said even during the economic downturn, the group had
sold properties in Kota Kinabalu and Johor Baru and managed
to re-commence projects in Seremban and Kota Kinabalu.
He said that the group had decided to forego the plantation
and education activities.  Although the plantation was a
good income earner, the company did not have much choice
but to let go of it.

"In business, one should not expect to get good deals in
every thing it does, and sometimes letting go is the best
decision," said Tang.

He said with the inclusion of Malaysia in the Morgan
Stanley Capital Indices (MSCI) by next May, the local share
market would definitely improve.  However, Tang said, the
group was expected be in the red for the current financial
year ending May 31, 2000 and would only return to the black
in the year 2001 or 2002.

Kemayan has retained its 4,000 acres of palm oil
plantations in Pahang and has 1,000 acres of accumulated
landbank in Johor Baru and Seremban.  It also owns a 3,000-
acre plot off the Bintan Island in Indonesia, which is
estimated to worth be S$300mil.  For the financial year
ended May 31, Kemayan's group turnover declined to RM118mil
from RM487mil previously while its pre-tax loss was higher
at RM763.9mil against RM412.1mil in 1998.  (Star Online  
30-Nov-1999)


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

NATIONAL STEEL CORP.: Gov't wants to recover stake
--------------------------------------------------
The government is willing to write off its investments in
National Steel Corp., but will find ways of reviving the
company if that is possible.

While Trade and Industry Secretary Jose Pardo insisted the
government should not bail out the company, Socio-economic
Planning Secretary Felipe Medalla said the government
should consider all possibilities to revive it.  All the
government wants from National Steel is to "retrieve its
investments," according to National Development Co. general
manager Samie Lim.

Despite his stance not to pour in additional funds into the
steel firm, Pardo admitted the government was willing to
suspend all penalties and dues the steel plant owes to the
government and to review its tariff policies affecting the
industry, including the possible ban on steel imports.
The government through state investment firm National
Development Company owns 12.5 percent of National Steel,
which NDC's Lim estimated was equivalent to P1 billion.

"We will do all to try to retrieve this amount," Lim said,
adding that the foreclosure proceedings against the
National Steel was in the best interest of both government
and creditor-banks.

By going the route of preserving its stake in National
Steel, the NDC said it would try to prevent the dilution of
its minority shareholdings in the company by requesting the
group which would buy National Steel to let the government
keep the stake as a token shareholder.  Medalla, also the
director general of the National Economic and Development
Authority, said the government should consider all
possibilities to revive National Steel.

"But there are good ways and bad ways of doing it," Medalla
said. "The bad approach is to use government money to
rescue it but the good way is to get new investors to come
in."  Medalla stressed: "What we will not do is put money
in it."

The key issue in the National Steel, Medalla said, was how
much the new investor would pay the old investors to enable
them to gain full control of the steel company.  National
Steel is currently facing foreclosure proceedings from a
consortium of local banks that lent it a total of P14
billion. It blamed its financial woes to the surge in
Russian imports sold at dumped prices.

This developed as member-firms of the Philippine Steel
Rolling Mills Association opposed any import ban on
foreign-made steel as well as other non-financial measures
to help National Steel.

"(We) are not against any rehabilitation of National Steel
provided that any such plan will not grant special favors
to any party (that) will give them undue advantage over
others," group president Wellington Tong said.

Tong said that tariff protection and subsidies would
unavoidably create a negative impact on consumer goods and
on the country's infrastructure development by way of
higher costs of packaging materials like tin cans and
higher cost of steel construction materials.  (Manila Times  
30-Nov-1999)


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

BANGKOK METROPOLITAN BANK: BOT legal action ahead           
CREDIT AGRICOLE INDOSUEZ: BOT legal action ahead          
EKKAPARK CO.: BOT legal action ahead                     
NAKORNTHON BANK: BOT legal action ahead                       
RUAM BORIHARN THURAKIT CO.: BOT legal action ahead         
--------------------------------------------------             
The Bank of Thailand (BOT) yesterday decided to take legal
action against five commercial banks and finance companies
together with some of their former and current executives,
alleging involvement in the Finance One Pcl fraud case.

The BOT said in a statement released yesterday it had asked
the police to investigate and to file charges against the
following companies and individuals: Ekkapark Co. Ltd.
together with Prapote Choomwatthana, Vichai Srisawai and
Apichart Jootrakul; Ruam Boriharn Thurakit Co. Ltd.
together with Prapote Choomwathana as company
representative and Propote Choomwatana and Vichai Srisawai
as individuals; Credit Agricole Indosuez together with the
high level executives responsible for buying promisory
notes from Ekkapark and Ruam Boriharn Thurakit; Bangkok
Metropolitan Bank Pcl. (BMB) together with its high ranking
executives responsible for buying promissory notes from
Ekkapark and Ruam Boriharn Thurakit, and Nakornthon Bank
Pcl. together with the high ranking executives responsible
for buying promissory notes from the two mentioned
companies.

Ekkapark and Ruam Boriharn Thurakit were allegedly involved
in financial fraud, linked to the closed Finance One whose
president - Pin Chakkaphak - is wanted by police
investigators and prosecutors.  Pin together with two
former Finance One executives - Thermchai Phiyawatana and
Samran Kanokwatanawan - were charged in August last year by
public prosecutors over their role in alleged illegal loans
worth 1.8 billion baht.

The BOT statement did not name any executives of the three
commercial banks responsible for buying the 1.8 billion
baht promissory notes from the two proxy companies of
Finance One. BOT stated that as the public prosecutors did
not identify the names of the "responsible executives" of
the three commercial banks, the central bank therefore set
up a four-member committee to investigate and find out who
they are.

The committee, headed by Wissanu Krue-ngarm, Secretary-
General of the cabinet and member of BOT Board, will also
investigate if any BOT executives had been involved in the
Finance One case. The other three members of the committee
are BOT Deputy Governor Thanya Suraswadi, Assistant
Governor Rathakorn Nimwatana and Sansern Wongcha-um, a BOT
Board member.

BOT sources said the central bank's top officials to be
investigated include Deputy Governor Kitti Patpongpibul and
Assistant Governor Chaktip Nitibhon who were president of
Nakornthon Bank and Country Manager of Credit Agricole
Indosuez, respectively, during the time of the suspected
fraud. Another high-ranking BOT official to be investigated
is reported to be Kiatchai Sophastienphong, Director of
Financial Institutions Policy Department.

Meanwhile, Chaktip Nitibhon commented that the appointment
of the committee was in response to Finance Minister Tarrin
Nimmanahaeminda's order to "clear the matter" and make the
central bank transparent in its operations.  (Business Day  
30-Nov-1999)

INT'L ENGINEERING: Ordered to cough up cash
-------------------------------------------
The Intellectual and International Trade Court has ordered
International Engineering Plc (IEC) to make a $22.377
million repayment to seven foreign creditors.

IEC was sued by the foreign creditors to make the principal
repayment of a syndication loan that was signed in October
1995.  According to its filing to the Stock Exchange of
Thailand, IEC said the court made a final decision on Nov
26 this year to order the company to make payment of $22
million in principal together with $377,433 interest to the
foreign creditors.

During the repayment period, IEC will also be charged at
8.5 per cent annual interest. In addition, IEC is
responsible for Bt200,000 in legal expenses of its
creditors.  

The exchange rate used for the payment will be the average
rate quoted by local banks on the day of the ruling. IEC
said in a statement to the SET that it was appealing
against the judgment. (The Nation, Bangkok Post  30-Nov-
1999)

MK REAL ESTATE DEVEL.: SET finds accounting improprieties  
---------------------------------------------------------      
The SET said MK Real Estate Development had violated
accounting standards for its Q3 financial statements
regarding additional accrued interest expenses on defaulted
loans.

The company, which said it believed it would be able to
negotiate with creditors to waive penalties on the
defaults, did not record additional accrued interest
expenses of 169.4 million baht for 1999 and 76.8 million
baht in 1998. Subsidiary companies also did not record
interest expenses of 0.6 million baht this year and 0.1
million last year.  If the expenses were recorded,
unappropriated retained earnings as of Jan 1 would have
decreased by 136 million baht, with consolidated
unappropriated earnings reduced by 136.2 million.

Net income for Q3 ending Sept 30 would have fallen 5.8
million baht, with consolidated net income reduced by 5.9
million. Net income for the first nine months would have
fallen 33.4 million baht, with consolidated net income
reduced by 33.8 million.  Total liabilities as of Sept 30
would have increased by 169.4 million baht, with
consolidated liabilities increased by 170 million.  
(Bangkok Post  30-Nov-1999)

RADANASIN BANK: Transfers ailing assets as UOB takes over
---------------------------------------------------------
Radanasin Bank will transfer ailing assets worth 44.97
billion baht to Radanasin Asset Management Company, after
regulators yesterday concluded the sale of a 75% stake in
the bank to Singapore's United Overseas Bank.

Final contracts between the central bank's Financial
Institutions Development Bank and UOB were signed
yesterday. Chakthip Nitibhon, assistant central bank
governor, said payment had been made by UOB already.
Representatives of the development fund and UOB signed
three contracts.

First was a loan transfer agreement moving bad loans to the
new asset management company. Second was a loan management
agreement setting out the terms and incentives offered to
UOB for overseeing the bad loans. Third was a shareholders'
agreement giving the fund veto power for major future
changes at Radanasin, such as delisting from the market,
closing operations, raising new capital or merging with
other institutions.

Wee Cho Yaw, UOB chairman and chief executive, will become
chairman of the renamed UOB Radanasin Bank. Samuel Poon Hon
Thang, executive vice-president of UOB Singapore, will
become chief executive of UOB Radanasin.  Mr Wee said
Thailand had a strong export base and, once the financial
restructuring was completed, the economy would rebound
rapidly.

"UOB Radanasin intends to play an active role in the
economic revival of Thailand," he said.

In October, the central bank announced that UOB would buy a
75% stake in Radanasin Bank for 15.089 billion baht.
Bad assets would be transferred to an asset management
company and managed under a profit-sharing agreement with
the Singaporean bank.  UOB plans to restructure Radanasin's
capital base to match the reduced asset size. Overall,
total costs to UOB for the takeover will be 6.5 billion
baht.

Radanasin yesterday told the Stock Exchange of Thailand
that the Singaporeans would be paid for the assets with
promissory notes of equivalent value.  The notes will have
maturities of 1-5 years, with the fund providing a
guarantee.  Interest rates will be based on average six-
month fixed deposit rates quoted by Radanasin and the four
largest banks.

Radanasin Asset Management Company was set up in June, and
is 99.99% owned by Radanasin Bank.  Under the profit-
sharing scheme, 95% of the profits from the rehabilitation
of assets will go to the development fund, and the rest to
UOB.  Losses will be borne 85% by the fund and 15% by UOB,
which will also receive a management fee equal to 0.1% of
the gross book value of the bad loans.

Radanasin Bank posted consolidated assets of 53.7 billion
baht at the end of the third quarter, with loans of 44.7
billion.  Bank directors last week also announced the
resignation of Sumate Tanthuwanit from the board, effective
November 23.  Sirichai Sombutsiri will resign as managing
director, effective today.  Arun Chirachavala was named a
director and independent director, with Puntip Surathin
named an independent director.

Radanasin, which took over defunct Laem Thong Bank in
August 1998, is the second bank to be sold by regulators
this year.  Standard Chartered bought a 75% stake in
Nakornthon Bank in September for 12.38 billion baht.
The central bank is expected to sell a majority stake in
Bangkok Metropolitan Bank and Siam City Bank to foreign
investors in the next few months.  UOB Radanasin, with 67
branches, plans to expand its presence in consumer banking,
trade financing and treasury activities.  (Bangkok Post  
30-Nov-1999)

SUN TECH GROUP: Posts annual loss                          
---------------------------------                               
Sun Tech Group announced audited consolidated losses of
2.86 billion baht for the year ending June 30, compared
with losses of 939.43 million last year.  (Bangkok Post  
30-Nov-1999)

THAI NAM PLASTIC: Directors approve rehab plan             
----------------------------------------------                 
Thai Nam Plastic directors last week approved the company's
rehabilitation plan. The rehabilitation plan will include a
writedown of paid-up capital to 63.1 million baht from
252.54 million to write off retained losses. The company
will then raise capital to 293.13 million baht by issuing
23 million new shares of 10 baht par value. The new shares
will be offered to creditors of the firm. Funds will be
used to repay outstanding loans. An extraordinary
shareholders' meeting will be held on Jan 14 to approve the
plan, with the share register to attend the meeting closed
on Dec 24.  

The company also appointed three new directors to the
board: Silpajai Kharuharatana, Singharat Charoenwongsa, and
Natee Saengudomlerd, who was named as an independent
director.  (Bangkok Post  30-Nov-1999)

TUNTEX (Thailand) PLC: Negotiates loan repayment delay
------------------------------------------------------
Tuntex (Thailand) Plc, an affiliate of Taiwan's Tuntex
Distinct Corp, said it had agreed with Bangkok Bank to
delay the repayment of a US$170- million loan by six
months.

With the postponement, Tuntex (Thailand) said the first two
instalments of principle would now be paid in May and
November 2000 respectively, according to its filing to the
Stock Exchange of Thailand.  Executives from both Tuntex
(Thailand) and BBL were not available for comment
yesterday.

Tuntex (Thailand) also said it would pledge 4.41 million or
49 per cent of shares in its real estate subsidiary, Asia
Industrial Park Co with the bank.  The company will also
sell more than Bt530 million worth of common shares of
Tuntex Petrochemicals (Thailand) Plc, another subsidiary,
before May next year.  Tuntex Petrochemicals is a
manufacturer of pure terephthalic acid (PTA) with a
registered capital of Bt5.8 billion, and a paid up capital
of Bt4.925 billion.  Tuntex (Thailand) is a manufacturer of
polyester yarn, filament, chips and pellets.  (The Nation  
30-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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                         *** End of Transmission ***