TCRAP_Public/991203.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

            Friday, December 3, 1999, Vol. 2, No. 236


* I N D O N E S I A *

PT BANK LIPPO: Posts 9-month loss
PT BANK MANDIRI: Posts large losses in only 2 months
PT SEMEN CIBINONG: Posts annual loss
PT WICAKSANA OVERSEAS: Reaches agreement on restrucure  
TEXMACO GROUP: Considers subsidiary sales to cover debts

* K O R E A *

DAEHAN INVESTMENT TRUST: To be declared insolvent today
DAEWOO GROUP: IMF discounts need for gov't guarantee
HAITAI BEVERAGE: Pact for sale to Japanese group signed
KOREA INVESTMENT TRUST: To be declared insolvent today

* M A L A Y S I A *

PARACORP BHD.: Restructure includes acquisition
RENONG: Rehab efforts allow some debt settlement

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

EYCO GROUP: Discussing quick resolution debt-for-asset swap

* T H A I L A N D *

EASTERN STAR REAL ESTATE: 3rd party settles half of debt
PREMIER ENTERPRISES: Needs more debt-rehab negotiation time
SWEDISH MOTORS CORP.: Recapitalizing to reduce debts
TANAYONG PLC: Hong Kong co. may have financed debt payoff


PT BANK LIPPO: Posts 9-month loss
PT Bank Lippo, Indonesia's third-largest publicly traded
private bank, said its nine-month loss widened as interest
income fell faster than interest cost. The bank lost 1.87
trillion rupiah, or 117 rupiah a share, compared to a loss
of 815B rupiah, or 951 rupiah per share, for the first nine
months of last year. The bank has made two rights offer
since last December.

PT BANK MANDIRI: Posts large losses in only 2 months
Bank Mandiri, the state bank combining four other state
banks posted losses totalling Rp6.8 trillion (US$ 942
million) during the first two months of operation.

Bank Mandiri president Robby Djohan told reporters here
yesterday the losses came from interest losses or "negative
spread" totalliong Rp2.4 trillion, exchange rate losses of
Rp4.1 trillion and loan charges of Rp65 billion.  Aside
from this, an additional reserve of productive assets in
the form of "legacy banks" totalling Rp22.2 trillion, thus
creating negative equity amounting Rp24.7 trillion or
capital adequacy ratio (CAR) of negative 15.1%.

The losses were attributed to a delayed recapitalisation
and rupiah depreciation in end of September 1999.  On
recapitalisation cost, Bank Manditri will require funds
totalling Rp164 trillion, but so far the government has
only given Rp103 trillion in the form of government bnonds.
The government itself only agreed to give recapitalisation
funds totalling Rp136 trillion to Bank Mandiri.

Regarding the still unpaid recapitalisation fund as
requested, Robby said if this were not given,
recapitalisation now being carried out would be futile.
The recapitalisation cost of Bank Mandiri presently is
again being subject to "due diligence" scrutiny by the
foreign auditor Arthur and Anderson.

The government stance which so far has not met the request
for recapitalisation funds for Bank Mandiri is in fact not
meant to hamper recapitalisation process. "It is simply a
bureaucratic matter," Robby said.

On the case of credits granted to Texmaco in relation to
export facilities granted by the government in 1997, Robby
admitted Bank Mandiri has also disbursed credits from Bank
Indonesia to Texmaco valued around Rp490 billion or five
percent of a total of Rp9.8 trillion.

Robby further said Bank Mandiri plans to enter the capital
market next year.  Meanwhile, another banker of Bank
Mandiri said total nonperforming credits with the bank has
now reached Rp46 trillion, of which Rp9 trillion has been
restructured and implemented, while Rp7 trillion has not
been implemented, as for the rest these will be settled in
2001.  (Asia Pulse  02-Dec-1999)

PT SEMEN CIBINONG: Posts annual loss
PT Semen Cibinong (JSX: SMCB) announced on Tuesday a net
loss of 2.3 trillion ($US328 million) in 1998, attributed
to huge foreign exchange losses as a result of the rupiah

Company President Hashim S. Djojohadikusumo said that the
crisis has served a severe blow to his company draining it
of cash to repay its debt.  The cement producing company,
therefore, is seeking to secure an agreement from its
creditors to restructure its debt, Hashim said without
giving figure.

Earlier it was reported that the company ran up a total
debt of US$ 1.4 billion mostly or 96% to foreign banks and
4% to local banks. (Asia Pulse  01-Dec-1999)

PT WICAKSANA OVERSEAS: Reaches agreement on restrucure  
Publicly listed trading and distribution company PT
Wicaksana Overseas International has reached an agreement
with its creditors to restructure $ US126 million in debt
through debt buyback, debt-to-equity swaps and rescheduling
deals.  (Asia Pulse  01-Dec-1999)

TEXMACO GROUP: Considers subsidiary sales to cover debts
Textile giant Texmaco Group, beset with a US$ 754 million
and Rp1.9 trillion (US$ 271 milion) in non-performing debt
to a state bank, said it could repay its debt by selling
its subsidiaries listed on the Nasdaq stock exchange in the
United States.

In addition, the company group still has a number of
factories in operation and could turn out a total earning
of US$ 470 million in 1999 from the sales including exports
of textiles, garments and textile machines, company's chief
commissioner G. Manusamy said.

"Boston Consulting Group (BCG) has prepared a strategic
business plan for PT Texmaco Perkasa Engineering to
continue operation and expand," Munusamy told

He said with assets far exceeding its debts the company
should be able to settle its debt obligations and the delay
in the repayment was caused only by economic crisis that
has also hit other companies.  He said Texmaco already
reached a "standstill" agreement for the debts with
the state bank, BNI, and Texmaco has asked for debt equity
swap by continuing to pay interest although delayed.

The Texmaco case has come as a new scandal involving
Indonesian major banks.  The Indonesian govenrment is still
busy trying to resolve a US$ 80 million Bank Bali scandal
believed to involve senior officials including a number
cabinet ministers of former President B.J. Habibie, his
croinies and brother.

The Texmaco case was made public by State Minister for
Investment and State Enterprises Laksamana Sukardi in a
hearing with the parliament late last month.  Sukardi said
the credit was approved by the central bank, Bank
Indonesia, in high level collusion involving former
President Soeharto.  Company President Marimutu Sinivasan,
however, denied the collusion allegation, although he
acknowledged to have sent a letter to Suharto in
connection with his company's request for the credit.

"I have never sought to involve political power in business
and I did not know about Suharto's authorizing signature
telling Bank Indonesia to approve the credit," the ethnic
Indian tycoon said.

He also has told the parliament that his cpmpany could
repay its debts including interest without hair cut in 3 to
5 years.  (Asia Pulse  01-Dec-1999)


DAEHAN INVESTMENT TRUST: To be declared insolvent today
KOREA INVESTMENT TRUST: To be declared insolvent today
A due-diligence audit has revealed that the debts of Korea
and Daehan investment trust companies exceed assets by 2.42
trillion won and 890 billion won, respectively, the
Financial Supervisory Commission (FSC) said yesterday.
The commission will today designate the nation's two
largest asset management firms as insolvent financial
institutions, ordering them to write down their capital
before any injection of public money.

Liabilities of Korea Investment Trust Co. (KITC) totaled
4.48 trillion won, far more than its assets of 2.06
trillion won, while Daehan Investment Trust Co. (DITC) had
a total of 2.66 trillion won in debts and 1.77 trillion won
in assets, the FSC said.  An FSC official said DITC's debts
will increase further when losses are calculated on its
holding of Daewoo bonds.

He said the quality of the two firms' balance sheets was
worse than expected, suggesting that the financial watchdog
will hold incumbent and former managers responsible for
mismanagement. He said new management will be formed for
the two firms within this year.

"A special probe will be conducted into the two companies
early next year and those found responsible for
mismanagement will be made to bear civil and criminal
responsibilities," the official said.

The government will next week nationalize the two ailing
institutions by injecting a total of 3 trillion won. The
government will initially put 600 billion won into KITC and
300 billion won into DITC, not in cash but in equities in
state-owned enterprises.  Then it will have state-run banks
infuse another 1.4 trillion won and 700 billion won in cash
into the respective companies by the year's end.

"To make the two firms clean, some four trillion won will
have to be injected. But the government will limit fund
injection to 3 trillion won," he said.

In probing the two firms, the FSC will focus on their
practice of managing customers' assets. The due diligence
audit showed that moral hazard had been rampant among the
two firms' fund managers, the official said.  The size of
transactions between funds totaled 2.3 trillion won at KITC
and 1.5 trillion won at DITC. Losses from Daewoo bonds
amounted to 904.4 billion won for KITC and 486.8 billion
won for DITC.  (Korea Heald  03-Dec-1999)

DAEWOO GROUP: IMF discounts need for gov't guarantee
Although the Daewoo Group crisis still poses a systemic
risk to Korea, it does not warrant the government's
provision of debt guarantees to foreign creditors, Hubert
Neiss, Asia-Pacific director of the International Monetary
Fund, said yesterday.  Neiss said that "great caution"
should be exercised in the potential use of debt guarantees
by the Korean government in resolving the Daewoo debacle.

"Guarantees have a place only when there is a systemic
threat to the financial system," Neiss said in a statement.
"This is why at the height of the crisis a guarantee of
bank liabilities was provided by Korea, and this was
supported by the IMF in light of prevailing circumstances."

Saying that the magnitude of the risk posed by Daewoo is
"much smaller in relation to that at the height of the 1997
crisis," Neiss said in his view, the government's provision
of guarantees to foreign banks is not needed.  Neiss' view
is basically in line with the position enunciated by the
Seoul government and the fund during the IMF annual meeting
in Washington, D.C. in September.

The Seoul government has repeatedly stressed that it has no
intention of providing any guarantees to Daewoo's foreign
creditors.  In the statement, Neiss noted that some
progress has been made in resolving Daewoo problems.
(Korea Herald  03-Dec-1999)

HAITAI BEVERAGE: Pact for sale to Japanese group signed
Cho Hung Bank yesterday signed a formal contract to sell
Haitai Beverage Co., a soft drink unit of the insolvent
Haitai Group, to a consortium of five Japanese and Korean
firms, a bank official said.

The sale price is set at 308.5 billion, 10 percent of which
the acquiring firms paid to Cho Hung upon signing the
contract, he said. Cho Hung is the main creditor bank of
Haitai Beverage.  Hikari, a printing firm, will take over a
controlling 51 percent stake in the soft drink firm, while
Asahi Beer Group will acquire a 20 percent stake.

Lotte Hotel of Korea will purchase a 19 percent interest,
while Mitsui Corp. and Dentsu Inc. will each have a 5-
percent stake.  Under the contract, all Haitai Beverage
employees will be retained for at least three years and
will also be eligible to receive severance pay should they
choose to leave the firm, the official said.

The contract will become valid after the nation's anti-
trust watchdog, the Fair Trade Commission, accepts a report
of the takeover within the next 10 days.  Since it went
into insolvency in November 1997, Haitai Beverage has been
in serious financial difficulties.  The Cho Hung official
expected the takeover by the Japanese-led consortium will
serve as an opportunity for Haitai Beverage to be reborn as
a new soft drink maker.  (Korea Herald  03-Dec-1999)


PARACORP BHD.: Restructure includes acquisition
Paracorp Bhd has proposed an internal restructuring
involving the acquisition of Lion Electronics Enterprise
(M) Sdn Bhd for a cash consideration of RM7.34mil.

The proposal will see Paracorp taking over 3 million shares
of RM1 each respresenting the entire issued and paid-up
capital of Lion Electronics from Goda (M) Bhd.  Lion
Electronics is currently a wholly-owned subsidiary of Goda
which in turn is a wholly-owned subsidiary of Paracorp.
Lion Electronics was incorporated on Nov 22, 1988 and its
principal activity is in the manufacturing of electronic
circuit components.

Meanwhile, Goda was incorporated as Goda (M) Sdn Bhd on Jan
17, 1989. On April 20, 1994, it changed its status to a
public limited company and assumed its present name of Goda
(M) Bhd.  Goda's principal activity is the manufacturing of
printed graphic overlay, printed electronic circuits and
electroluminescent display.

Goda has an authorised share capital of RM25mil consisting
of 25 million ordinary shares of RM1 each, of which four
million of the ordinary share have been fully issued and
paid-up.  Paracorp said in a statement that the 3 million
shares in Lion Electronics would be acquired free from all
encumbrances, charges and liens with rights attaching
thereto. It said the purchase consideration of RM7.34mil
was arrived based on Goda's original cost of investment in

The proposed internal restructuring would result in a
leaner group structure for Paracorp and would facilitate
any future corporate proposals involving the subsidiary
companies, it said.  Paracorp said the proposed internal
restructuring would not have any effect on its issued and
paid-up share capital and its consolidated net tangible
assets.  It also would not have any material effect on
Paracorp's consolidated earnings for the financial year
ending Dec 31, 1999.  The proposal is conditional upon the
approval of the International Trade and Industry Ministry.
(Star Online  02-Dec-1999)

RENONG: Rehab efforts allow some debt settlement
Renong Bhd said it has settled some of its debts as of Oct
5, after receiving about RM5.38bil under its debt
restructuring exercise.

Renong said in a statement that it received the RM5.38bil
via a loan of RM3.94bil in cash and about RM370mil in
present value PLUS bonds.  It also received about RM1.07bil
in present value PLUS bonds arising from the redemption of
its redeemable cumulative convertible preference shares in

The company settled its US$225mil 10-year unsecured
Euroconvertible 1994/2005 bonds, US$175mil 10-year
unsecured Euroconvertible 1995/2005 bonds, RM200mil
floating rate notes, US$150mil transferable loan
certificates, RM390mil nominal value five-year 1.75%
redeemable secured bonds, US$262mil floating rate notes in
TIME Investments (Cayman) Ltd and US$118mil bank guarantee.
In addition, Renong also redeemed its five-year zero coupon
redeemable secured bonds at a redemption sum of 88.52 sen
for every RM1 nominal value of the bonds.  (Star Online  


EYCO GROUP: Discussing quick resolution debt-for-asset swap
After two years of being in the red, the Eyco Group of
Companies wants a "quick exit" in the rehabilitation case
filed with the Securities and Exchange Commission (SEC) by
agreeing to swap assets with 5.2-billion-peso (US$127.2
million at PhP40.875:US$1) worth of debts.

A company spokesperson, speaking on condition of anonymity,
told BusinessWorld that the group is now discussing with 28
creditor banks for a debt-asset swap agreement to pay off
ballooning obligations.  The company official said through
this "early settlement," it can spare the SEC of one
rehabilitation case, wipe out its debts and, at the same
time, continue operations.

"Right now we're in a lose-lose situation. This case has
been going on for years and it's not doing us nor the banks
any good. So we decided to finally settle everything by
paying our debts, have an early settlement and have a quick
exit from the receivership," the Eyco spokesperson said.

The company source said the management of Eyco, led by
owner Eulegio Yutingco, has selected some of the group's
major properties, particularly those located in Valenzuela,
that will be used as payment in kind.  The value of the
properties, the source said, will be enough to wipe out
Eyco's debts which now stand at PhP5.2 billion from PhP2.08
billion ($50 million) in 1997.

"We're in the middle of discussions now with the banks and
we don't want to preempt them by saying that they might
possibly agree to the proposal. But this was exactly what
they wanted before and now we're willing to give it to
them. If the banks agree then we hope to finally settle the
issue before the end of the year," the company official

The spokesperson added that the management has opted to
settle the group's debts by paying in kind since this setup
will benefit both secured and unsecured creditors rather
than resort to foreclosure which will only be advantageous
to banks who have collateral tied to their loans.

Only a number of the group's 28 creditor banks are holding
collaterals, namely: Philippine National Bank, Far East
Bank and Trust Co., Allied Banking Corp., Traders Royal
Bank and Westmont Bank.

"Pursuing a foreclosure would only make things complicated
for all parties concerned. The best solution to the
situation is an amicable settlement. Both the creditors and
the petitioner are losing time and opportunities. We
believe we have offered something that is fair to both
parties. We hope to agree on a settlement very soon," the
official said.

The spokesperson was responding to earlier reports that
creditor banks are now moving to foreclose some of the
group's properties after the Court of Appeals (CA) failed
to issue a temporary restraining order (TRO) on the SEC's
order to liquidate and dissolve the companies last
September 14.  Allied Bank, for instance, has reportedly
went ahead with the foreclosure of the group's assets
located in Rizal.

"Pending resolution of our appeal with the CA, the SEC
order is considered not final and executory. Any
foreclosure initiatives or proceedings are deemed invalid
or illegal," the company source added.

Meanwhile, the Eyco spokesperson said with the approval of
the banks, the companies under the group are hoping to get
back to business by next year and once again generate
revenues. The Eyco Group is comprised of Nikon Industrial
Corp., Nikolite Industrial Corp., 2000 Industrial Corp.,
Trade Hope Industrial Corp., Thames Philippines, Inc., EYCO
Properties, Inc., Nikon Land House, Inc., Integral Steel
Corp. and First Unibrands Food Corp.  (Business World  


EASTERN STAR REAL ESTATE: 3rd party settles half of debt
More than half of Eastern Star Real Estate Plc's debt is
settled, the company announced yesterday.  The settlement
of the 392 million baht debt, including principal and
interest, with its creditor, Bangkok Capital Alliance, was
concluded through a third party investor which the firm did
not name.

William Cheng, managing director of Eastern Star, said that
by reducing the debt, the company was now ahead of its own
internal schedule to fully restructure its borrowings.
Eastern Star is restructuring another 300 million baht debt
with its creditors, the Asset Management Corporation and
Bangkok Capital Alliance.  Mr Cheng said this process would
be completed by the start of next year. Three investors had
expressed interest in investing in the company, said Mr

"Negotiations have proceeded well and an agreement could be
reached as early as the beginning of next year," Mr Cheng

Sherriff Group, a United Kingdom- and Hong Kong based
research, investment advisory and fund management company,
recently bought 27 million shares issued by Eastern Star.
Chris Harborne, director of Sherriff Group, said that the
company's foreign clients were looking at investing in Thai
property, particularly in the residential housing sector.

"When the market starts to pick up, we will encourage them
to invest in Eastern Star," Mr Harborne said, based on the
developer's prospects.

Eastern Star was established in 1980, and has a registered
capital of 2.054 billion baht. The company focuses on
residential property development as well as recreational
properties such as golf courses and shopping malls.  
(Bangkok Post  02-Dec-1999)

PREMIER ENTERPRISES: Needs more debt-rehab negotiation time
Premier Enterprises Plc, explaining why it had requested
postponing the submission of its rehabilitation plan from
Nov 30, 1999, to March 31, 2000, said that it needs more
time to negotiate a debt restructuring deal with creditors.

In its filing with the Stock Exchange of Thailand, PE said
it is engaged in the debt restructuring process under
supervision of the Corporate Debt Restructuring Advisory
Committee (CDRAC), a process which has to be completed
before it can file the rehabilitation plan.  PE said the
request was approved by the Stock Exchange of Thailand
(SET) on Nov 26.   The company, according to the filing,
expects to conclude its debt restructuring deal with the
steering committee of creditors by Dec 31.  (The Nation  

SWEDISH MOTORS CORP.: Recapitalizing to reduce debts
Sweedish Motors Corporation Plc reported that it has
successfully allocated about 43 per cent of its 463.835
million new ordinary shares which were issued to raise its
registered capital from Bt361.64 million to Bt5 billion.
The capital increase plan is aimed at raising funds to
reduce its existing debts, fulfil its obligations to
convertible debenture holders, and boost its working

In its filing with the Stock Exchange of Thailand, SMC said
199.39 million new shares had been allocated to specific
investors, mostly local and foreign financial institutions.
At the next shareholders meeting, the company will ask
shareholders to consider allocation of the remaining 57 per
cent of the newly-issued ordinary shares.

The board also approved the issuance and allotment of 1.717
million convertible debentures at Bt1,000 par value each,
totalling Bt1.717 billion to a maximum of 35 specific
investors, as well as the allotment of 27.688 million new
ordinary shares to Volvo Car Corporation (VCC) at the price
of Bt10 each. The company's board has approved the
mortgaging of six plots of land with the Bangkok office of
Bank of America NA for Bt1.048 billion. The loan carries an
interest rate of 5.4375 per cent per annum.  (The Nation  

TANAYONG PLC: Hong Kong co. may have financed debt payoff
The New World Group of Hong Kong is understood to have
provided financial assistance in the form of loan and
equity investment to Thailand's Tanayong plc major
shareholder Keeree Kanjanapas for yesterday's settlement of
the Bt3.5 billion debt owed to CS First Boston, according
to industry sources.

CSFB said in a statement yesterday that it had received the
payment from Tanayong of an outstanding debt acquired by
CSFS from Siam Commercial Bank. The collateral against the
debt is 248 million shares of Bangkok Transit System Co
(BTSC) in which Tanayong plc is the major shareholder. CSFB
said the payment will result in cancellation of the Dec 7
auction of the shares.

The loan portion of the money from New World Group, which
previously invested in the Thai property sector, including
an interest in Golden Land Property Development, reportedly
carries a relatively high interest rate, while there are
conditions on the other portion for equity investment, but
details have not been disclosed, according to the sources.
Sources said the collateral from CSFB will first be
returned to Tanayong plc.

The 248 million shares account for 18 per cent of BTSC
ownership. Last month, another 265 million BTSC shares,
also collateral for another US$80 million loan owed by
Tanayong was obtained by CSFB via auction. These 265
million shares account for another 23 per cent of BTSC, if
they are transferred.  Tanayong has refused to transfer
these shares, claiming that they were obtained

Meanwhile, another Hong Kong property giant Cheung Kong
Group of billionaire Li Ka-shing is expected to be offered
a stake in BTSC if Tanayong succeeds in buying back the
first tranche of 265 million BTSC shares from CSFB,
according to sources.  

Dow Jones yesterday quoted Victor Li, the managing director
of Cheung Kong (Holdings) Ltd as saying: "At this stage,
somebody has submitted a proposal to us," but noted that it
is premature to say whether the company would be interested
in making such an investment.

Tanayong president, Keree said earlier that he was willing
to offer Cheung Kong up to 25 per cent stake in the Thai
company.  Tanayong's holding in BTSC will be maintained at
28-29 per cent when it regains the collateral of 248
million shares. Previously, it owned 51 per cent of BTSC,
which will open the skytrain system on Sunday.  CSFB said
yesterday that it will continue to hold the 23 per cent
stake, adding the shares were obtained according to Thai

Yesterday, Siemens and Italian-Thai Development, the
building and equipment contractors, handed over the system
to the Bangkok Metropolitan Administration. Siemens shared
about $650 million while Italian Thai had about $670
million of the total $1.3 billion contracts.  The project
has cost a total of $1.7 billion. One third of the 100 per
cent privately-backed funding is BTSC equity capital. The
remaining two-thirds is provided by a syndicate of about 30
banks led by German Development Loan Corp (KFW), Siam
Commercial Bank and International Finance Corp.  (The
Nation, Bangkok Post  02-Dec-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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