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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

                Tuesday, January 4, 2000, Vol. 3, No. 2

                                           Headlines


* J A P A N *

CHISSO CORP.: To cut pay, workers to reduce 200B Yen Debt


* K O R E A *

DAEWOO CORP.: New conservative business plan for new year
DAEWOO MOTOR: Hyundai Motor to launch acquisition effort
DAEWOO MOTOR: Ford to do due diligence on acquisition


* M A L A Y S I A *

ALUMINUM CO. OF MALAYSIA: Initiating restructuring effort
CLOB INT'L: Issues remain despite accounts extension


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

CAPITOL WIRELESS, INC: Creditors agree on rehab plan
FIRST WOMEN'S CREDIT CORP.: Defies SEC on records turnover
NATIONAL STEEL CORP.: Seeks SEC approval for rehab proposal


* S I N G A P O R E *

L&M GROUP INVESTMENTS: Creditor banks still supportive
LIM KAH NGAM: Restructuring plan wins support
THAKRAL CORP.: Debt revamp plan drawn up


* T H A I L A N D *

THAILAND AIRWAYS INTERNATIONAL: May sell more shares


=========
J A P A N
=========

CHISSO CORP.: To cut pay, workers to reduce 200B Yen Debt
---------------------------------------------------------
Chisso Corp. (4006) has drawn up a restructuring program
running through the year ending March 2005 to reduce debts
of over 200 billion yen, The Nihon Keizai Shimbun learned
Sunday.

The debt is largely because of compensation payments made
to people poisoned by the company's industrial pollution.
The plan calls for a 13% reduction in the work force and
cuts of up to 20% in annual executive pay.

A total of 47 banks which deal with Chisso, including
Industrial Bank of Japan (8302) and Sanwa Bank (8320), say
they will offer financial assistance on the condition of
the company's efforts to turn itself around.

The plan calls for trimming payrolls at group companies to
1,900 over the next five years, down from some 2,200 as of
April 1999. Executive pay will be cut by 10-20% from fiscal
1999 levels, after which managers will temporarily forgo
annual wage increases. The series of cost-cutting measures
will result in annual savings of an estimated 4 billion
yen, according to company sources.

Chisso plans capital spending of some 40 billion yen over
the next five years, of which more than 20 billion yen will
be spent on its electronics materials and fine chemicals
businesses. Money-losing polyvinyl chloride operations will
be scaled down.  The government decided in June 1999 to pay
some of the damages to the victims of Chisso's pollution.
(Nikkei  02-Jan-2000)


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

DAEWOO CORP.: New conservative business plan for new year
---------------------------------------------------------
Daewoo Corp. yesterday announced a business plan for this
year, which puts top priority on moneymaking businesses in
a move to increase liquidity. The company said that it will
attain more than 9.3 trillion won in sales revenue, with
exports projected to reach $5.47 billion and operating
profits to top 120 billion won.

The sales target represents a 38.4 percent decrease from
last year's target of 15.1 trillion won.  Daewoo expected
exports to drop this year because several business units of
the Daewoo Group, including Daewoo Motor Co., Daewoo
Electronics Co. and Daewoo Heavy Industries Ltd., stopped
using it as an export window.

A spokesman said the company will ensure that the plan,
designed to enlarge the export margin and withdraw
uncollected credits, meets the company goal of maximizing
profits and increasing liquidity.  In particular, Daewoo
Corp. will focus efforts on letter of credit (L/C)-based
exports as well as minimization of transactions on credit
to drastically expand cash liquidity. It will also cut all
exports of unprofitable products. n an effort to improve
its financial status, Daewoo Corp. downsized its corporate
setups last month from 77 teams under 17 divisions to 54
teams under seven divisions and shut down 16 of 95 overseas
offices.  (Korea Herald  04-Jan-2000)

DAEWOO MOTOR: Hyundai Motor to launch acquisition effort
--------------------------------------------------------
Following the appointment of ace executive Park Se-yong as
its head, Hyundai Motor is expected to launch a major push
in a bidding "war" to capture the ailing Daewoo Motor.

In a surprise move, the Hyundai Group put Park in charge of
its flagship, Hyundai Motor. Park was lauded for his role
in the conglomerate's restructuring last year.  Although
Park, the former chairman of the Hyundai Merchant Marine
and the group's trading arm, Hyundai Corp., has no real
experience with the motor business, many industry watchers
see that his new job has everything to do with a looming
battle Hyundai will not be able to avoid with the world's
major auto powers this year.

"Park, a close aide of group founder Chung Ju-yung, is the
cream of Hyundai's top management talent," one industry
source said. "There should be adequate reasons for Park's
appointment, with the most compelling concerning Daewoo
Motor."

Daewoo Motor is Korea's No. 2 automaker that is the
flagship of the ailing conglomerate being dissected under
the creditors-initiated debt workout.  Hyundai's potential
adversaries include the all-mighty General Motors and Ford
Motors of the United States, while DaimlerChrysler is seen
biding its time to jump in.

Should one of the world's majors take over Daewoo Motor,
Hyundai would stand to lose a large chunk of its share in
the domestic market.  After its acquisition of Kia Motors
in an international tender last year, Hyundai Motor has
seen its domestic market share rise to three thirds of the
total, making Daewoo Motor a distant second. But according
to an unconfirmed internal study, Hyundai believes that it
would have to see its domestic market share reduced by half
a couple of years after whatever foreign major company
takes over Daewoo Motor and consolidates its position.

"Hyundai is feeling a sense of insecurity about the future
in which it will have to compete with a global player," one
industry watcher said.

But Hyundai has more than foreign adversaries to worry
about.  First of all, with its domestic market share
reaching close to three thirds, it may have to field
accusations of monopoly should it take over Daewoo Motor.
A consensus by both Korean and global standards is that
monopoly doesn't comply with market economic principles.
Even if the Korean public sympathizes with Hyundai Motor,
this situation could change very quickly.

Therefore, Park's appointment is Hyundai's trump card to
thread itself through a very tricky road toward the
acquisition of Daewoo Motor, on one hand warding off the
challenges of the world's top automakers, while on the
other hand, appeasing a potential antipathy against Hyundai
Motor's monopoly.

Park's appointment comes at a cost, however.  Industry
experts expect that Chung Mong-koo, the eldest son of the
Hyundai founder and erstwhile chief of Hyundai Motor, will
see his status weakened as the result of Park's
appointment. Hyundai officials state that Mong-koo will
take charge of both Hyundai Motor and its sister firm Kia
Motors but few would disagree that Park would wield real
power as far as Hyundai Motor is concerned.

Meanwhile, although Hyundai Motor officially maintains that
it is not interested in Daewoo Motor, some of its senior
officials are taking opposition to the takeover of Daewoo
Motor by any foreign company.  According to industry
sources, Hyundai is expected to enter into negotiations
with Ford Motor when the world's No. 2 automaker sends a
delegation to Seoul Wednesday.  The first test for Park in
his new job comes during Ford's upcoming visit to Seoul,
they agreed. (Korea Times  02-Jan-2000)

DAEWOO MOTOR: Ford to do due diligence on acquisition
-----------------------------------------------------
The Ford Motor Company of the US is planning to dispatch a
delegation to explore the possibility of purchasing the
ailing Daewoo Motor Company.

According to Daewoo Motor's main creditor Monday, the Ford
delegation is due to arrive in Korea on Wednesday and is
planning to go through a brief evaluation on Daewoo Motor
through documented information, which will be provided by
the leading Daewoo Motor creditor, Korea Development Bank.
Ford is also scheduled to offer a rough draft of terms and
conditions for taking over Daewoo Motor following the
evaluation.

Ford Motor Co., which has openly challenged rival General
Motors Corp. in bidding for Daewoo Motor, recently
recruited a former senior executive of Daewoo Motor, an
informed source here said yesterday.  Ulrich Bez, former
senior manager at Porsche who served as Daewoo Motor vice
president between September 1993 and July 1998, was
recently hired by Ford, the source said.

Bez is expected to arrive with a Ford delegation here early
tomorrow to hand in an official bid for the country's
second largest auto maker.  Ford Motor Korea said this was
the first it has heard of the news and declined comment.

"Bez is very familiar with Daewoo Motor operations and if
Ford recruited him, it shows that the auto maker is very
serious about taking over Daewoo," a Daewoo Motor spokesman
said.

Industry observers suspect that Ford is only bidding for
Daewoo to keep in check its rival GM, which hopes to use
the Korean auto maker as a base for greater access to the
Asian market.

The government and creditors of Daewoo Motor had set up a
plan last year to accept letters of intent from
participants in the international bid to take over Daewoo
Motor by the end of January. They are also planning to
select a number of preferred negotiation partners by the
end of March with a final takeover contract to be signed by
the end of June.  (Digital ChosunIlbo, Korea Times  03-Jan-
2000)


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

ALUMINUM CO. OF MALAYSIA: Initiating restructuring effort
---------------------------------------------------------
Aluminum Company of Malaysia Bhd (Alcom) will raise its
level of efficiency with the restructuring of its
operations that will see the separation of its extrusion
division and sheet and foil division.

Managing director Pierre Arseneault said the exercise,
which would separate the divisions into two different
entities, would also cater to Alcom's future expansion and
diversification programmes.  This involves the transfer of
the group's manufacturing operations, business and
undertakings comprising assets and liabilities to a wholly-
owned subsidiary known as Alcom Extrusion Sdn Bhd.

The restructuring, which is also expected to strengthen the
group's market share for aluminium products, followed
Alcom's substantial investments to raise capacity and
improve its operating environment.  In the middle of this
year, the company announced its plan to invest RM10mil this
year to enhance its environmental standards and improve the
production capacity of its plants.

"More than half of the allocation will be used to upgrade
the safety requirements such as solid waste and waste water
treatment," Arseneault said, adding that the rest would be
used to upgrade the machinery to generate higher capacity.

The upgrading exercise will increase Alcom's capacity by
20% to 30% for its extrusion and sheet foil plants, which
have a combined capacity over 50,000 tonnes per year.
According to Arseneault, the higher capacity was in line
with Alcom's objective of increasing export of its
aluminium products. Some of the new export markets are
China, the Middle East, India, Japan and Singapore. Alcom
chairman Tunku Tan Sri Imran Tuanku Ja'afar said as a
result of an export drive initiated in 1997 in preparation
for an eventual tariff reduction, the company's exports
increased by 13% in 1998.

"This clearly underlines Alcom's ability to produce quality
products that meet stringent international standards and
compete in a tariff-free environment," said Tunku Imran.

For the half-year ended June 30, 1999, the group posted a
pre-tax profit of RM5.1mil, significantly higher than the
RM261,000 profit posted in the previous corresponding
period.  Turnover for the first half was RM134mil, about
the same as reported in the comparable period in 1998. At
company level, Alcom registered a pre-tax profit of RM4mil
against a net loss of RM1mil before.  (Star Online  03-Jan-
2000)

CLOB INT'L: Issues remain despite accounts extension
----------------------------------------------------
Several questions still remain over the fate of the
Malaysian shares owned by Clob investors, even though the
Kuala Lumpur Stock Exchange (KLSE) last Friday extended
their joint nominee accounts by another six months to June
30.

Observers, while welcoming the extension, noted that the
KLSE had not officially endorsed any of the private sector
proposals. "The KLSE should indicate offers that are
palatable to Malaysia. What if the Clob investors accept an
offer that breaches Malaysian securities laws?" said an
analyst.

For instance, Akbar Khan's Effective Capital and Negri
Sembilan prince Tunku Abdullah's Bintang Melewar are the
front-runners with their offers but they, too, have not
obtained written approvals from regulatory bodies in
Malaysia.

Furthermore, the KLSE has not officially rejected proposals
from the Singapore Exchange (SGX) and the Securities
Investors Association of Singapore (SIAS), although their
proposals might actually have been put on the backburner by
the Malaysian authorities, some market watchers say.

The KLSE, on its part, has said that it is not its role to
consider the merits of any proposals put forward by private
sector parties to solve the Clob problem. On the table now
are proposals from Effective Capital, Bintang Melewar, the
SIAS, United Engineers Malaysia, Malaysian lawyer Tai Sim
Yew, the SGX, and Collective Custodial Services.

"As previously explained, it is up to the SGX, CDP and the
Clob investors to accept or reject proposals put forward by
the private sectors," it said in its statement on Saturday
announcing the extension. "KLSE and its subsidiaries' role
is to ensure that the implementation procedures for any
proposals are in full compliance with their rules and
regulations."

As some market watchers see it, it is crucial that this
circle of wait-and-see be broken if a solution is to be
found in the next six months.  Another uncertainty is the
concern over the transfer of the shares to the Ministry of
Finance (MOF) if no deal is reached by the new deadline. If
the shares do revert to the MOF, the ministry is empowered
to dispose of any unclaimed shares after a period, thought
to be six to nine months.

But an analyst said there is still no indication of the
procedure by which Clob investors who reject all the
proposals could reclaim their shares or the proceeds from
the Accountant-General's office. This is because the
exercise would be quite unprecedented.

An additional thorny issue is the status of the agreement
signed by the KLSE's Securities Clearing Automated Network
Services (Scans) and the SGX's Central Depository (Pte) Ltd
(CDP) in September last year.  CDP's lawyers -- Shook Lin &
Bok and Queen's Counsel Charles Flint -- have said that the
shares should migrate to the individual owners' accounts as
agreed upon by the two stock exchanges, and that there is
no question of the shares reverting to the MOF.

But the Malaysian exchange takes the view that the
agreement was merely to assist the Singapore exchange in
finding a solution to the Clob problem, and was not
intended to assume responsibility towards Clob investors.
On Friday, the KLSE issued a statement saying that the
third extension was a "final opportunity" for the CDP to
resolve the issue and to facilitate the completion of
proposals already put forward to it.

The frozen Malaysian shares of the estimated 172,000 Clob
investors worth about 17 billion Malaysian ringgit (S$7.5
billion) are held under the CDP's omnibus nominee account
with the Malaysian share depository.  The authorised
nominee status was first given by the Malaysian exchange to
CDP on Dec 1, 1998. This was shortly after trading in the
Malaysian shares previously traded on Clob International,
Singapore's over-the-counter market, was halted in
September following the imposition of capital controls by
Malaysia.  CDP's nominee status was to have expired on Jan
1, 1999, but was extended to Dec 31, 1999.

"With this extension, Clob securities presently held by CDP
will remain status quo, until the resolution of the issue
or the expiry of the authorised nominee status, whichever
is earlier," the KLSE said in its statement.

By the provisions of the Securities Industry (Central
Depository) Act 1991, all Malaysian securities must be held
in the account of a beneficial owner or an authorised
nominee.

"Any securities not held in the account of a beneficial
owner or an authorised nominee shall be transferred to the
Minister of Finance, and all claims thereafter shall be
made through the Accountant-General's office," the KLSE
statement added. "This will also apply to the shares
previously traded on Central Limit Order Book International
(Clob) should the matter not be resolved by June 30, 2000."
(Singapore Business Times  03-Jan-2000)


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

CAPITOL WIRELESS, INC: Creditors agree on rehab plan
----------------------------------------------------
Ending the past year on a good note, international gateway
operator Capitol Wireless, Inc. (Capwire) finally signed
last December 28 the final terms and conditions with
creditor-banks leading to the restructuring of its 736-
million-peso (US$18.3 million at PhP40.298:US$1) debt.

In a telephone interview, Capwire senior vice president and
chief financial officer Joel C. Aguilar said except for the
amortization schedule, they have already concluded debt
restructuring negotiations with the banks.  "(Signing of
the final terms with the banks) is one of the yearend
agreements we ensured will happen," Mr. Aguilar told
BusinessWorld.

He added the terms of the restructuring plan were already
laid out for the final draft which, in turn, will form the
debt restructuring's legal document. On the amortization
schedule, Capwire and the banks will sit down this week to
work for an "affordable" repayment schedule. Mr. Aguilar
admitted the company finds it hard to follow the proposed
amortization schedule of the banks. The banks want the
company to pay the principal and interest within eight to
nine years. Capwire, for its part, claims it can only repay
in 10 to 11 years.

"We are actually looking at a compromise. (The amortization
proposal) of the banks is heavy that we may not be able to
support our operations. It is just a matter of pushing back
the schedule of the payments," Mr. Aguilar explained.

Capwire will be relying on internally generated funds to
repay their debt to creditor-banks. (Business World  03-
Jan-2000)

FIRST WOMEN'S CREDIT CORP.: Defies SEC on records turnover
----------------------------------------------------------
The First Women's Credit Corp. (FWCC) defied the order of
the Securities and Exchange Commission to surrender the
company's books and records by padlocking its offices last
Dec. 29.

This developed the day after the SEC sought police
assistance for the interim management committee (IMC) it
created to be able to gain entry in the company's premises
and seize records and documents.

IMC chairman Fortunato B. Cruz informed SEC hearing officer
George P. Palmares that he and his deputy Augusto S. San
Pedro tried again to enter the office of FWCC at around
10:20 a.m. accompanied by three members of the Philippine
National Police in Makati City. They found out that the
front doors of the office were padlocked.  

Posted prominently on both door panels and the adjacent
walls were regular-sized white bond paper which read: "The
office will be closed for the remainder of the year pending
the negotiation of a new lease contract with the building
lessor. In the meantime, employees are considered to be
on forced leave up to Dec. 29, 1999" which was the last
working day of the year.

Cruz said that in contrast to his first visit to the FWCC
last Dec. 3 when only one guard was manning the entrance,
the visit last Dec. 27 was marked by the presence of three
security guards with long arms assigned to secure the
entrance.  The guards told Cruz they did not have the key
to the front door padlock and added the installation of the
padlock and increase in the number of guards all took place
late in the afternoon of Dec. 23, shortly after release of
the SEC order of Dec. 22, 1999.  The SEC earlier directed
the PNP to assist the IMC.

"The interim management committee deserves the assistance
it asks from appropriate governmental agencies in the
performance of its power and duties, that Philippine
National Police assistance should be given to it, to enter
FWCC's office and take custody and control of all
properties, funds, assets, documents and records of the
corporation," the order stated.

The evaluation of the company's finances will provide the
IMC with information to be used to determine possible
options for FWCC.  The FWCC management, however, said the
move is unnecessary. They said the firm, despite its
difficulties, has been on track with the collection of
its loan receivables.

The FWCC appealed earlier to the SEC to issue a gag order
on all parties not to release to the press any news
relative to the proceedings being conducted by SEC and to
reconsider its order and abolish the IMC "which will just
promote animosity among stockholders and make our jobs more
difficult." (The Philippine Star  02-Jan-2000)

NATIONAL STEEL CORP.: Seeks SEC approval for rehab proposal
-----------------------------------------------------------
Expecting to resume operations by mid-January this year,
after closing shop two months ago, cash-strapped National
Steel Corp. (NSC) has sought the corporate overseer's go
signal for a rehabilitation plan designed to put the steel-
maker back to work.

Under the rehab plan filed with the Securities and Exchange
Commission (SEC) last week, NSC proposed to convert its
outstanding bank loans of over 13.2 billion Philippine
pesos (US$327.5 million at PhP40.298:US$1) into non-
participating, non-voting and non-cumulative preferred
shares.

The commission's newly approved rules on corporate
recovery, however, would require creditors approval of
NSC's proposal before the latter can implement the same.
While waiting for the SEC's okay for twin petitions on
suspension of debt payment and rehabilitation, the debt-
laden steel maker is on the lookout for potential investors
or strategic partners, to infuse an additional capital of
over $130 million within the next two years.

In exchange for the capital infusion, NSC will issue
additional common shares.  Apart from the capital infusion,
the strategic partner should provide NSC with a $50-million
supplier's credit line to be used for the importation of
the slabs.

Under its proposed debt repayment scheme, 20% or PhP84.6
million ($2.1 million) of NSC's outstanding trade payables
of PhP423 million ($10.5 million) will be condoned and the
balance to be paid without interest within a period of
three years.  The beleaguered steel maker has also proposed
to scrap 50% or PhP408 million ($10 million) of its PhP816
million ($20.2 million) outstanding payables to the
government and pay the balance without interest, in five
years.

NSC filed for debt suspension last December 21 for
obligations amounting to over PhP16 billion ($397 million).
NSC asked the SEC for the debt relief when its secured
creditors foreclosed on its mortgaged assets after it
failed to meet debt payments.

In its petition for debt relief, NSC said the currency
crisis increased its operating costs at a time when the
liberalization of world trade dampened demand for its
products.  NSC said it needs two years to fully revive its
operations with the help of a new investor.  NSC's list of
creditors is led by Philippine National Bank, with an
exposure of PhP5.6 billion ($138.9 million), followed by
Indosuez with claims amounting to PhP1.62 billion ($40.2
million), and Land Bank of the Philippines with claims of
PhP1.01 billion ($25 million).

The steel firm is majority-owned by Hong Kong-based Hottick
Investments Ltd. The Philippine government, through the
National Development Co., has a 12.5% stake while Japan's
Marubeni Corp. holds a 5% share. Hottick had earlier
planned to divest but it was reported that no deal was
closed with potential investors.

The Hong Kong-based firm bought out former NSC owner Wing
Tiek Holdings Bhd. of Malaysia in February 1997 using
borrowings of $800 million from four Malaysian banks and
$32 million from a local bank syndicate which include
Westmont Bank. (Business World  03-Jan-2000)


=================
S I N G A P O R E
=================

L&M GROUP INVESTMENTS: Creditor banks still supportive
------------------------------------------------------
L&M Group Investments said last Friday that its creditor
banks remain supportive of it and are currently considering
a revised financial restructuring proposal presented by the
group's special accountants, Ernst & Young. For this
reason, L&M believes that there are reasonable grounds for
it to continue as a going concern. (Business Times  03-Jan-
2000)

LIM KAH NGAM: Restructuring plan wins support
---------------------------------------------
Lim Kah Ngam announced last Friday that it has received in-
principle support from all its creditor banks for its
proposed restructuring scheme.  Based on this, the group
said there are reasonable grounds for it to continue as a
going concern. (Business Times  03-Jan-2000)

THAKRAL CORP.: Debt revamp plan drawn up
----------------------------------------
Thakral Corp said last Friday that it has, together with
its financial adviser Arthur Andersen Associates,
established an action plan to restructure its debts.

The group said it will trim its debt by disposing of non-
core assets and reduce its working capital needs through
more efficient management of inventories and receivables.
It will appoint management consultants to help it improve
manufacturing capabilities and raise additional equity.
(Business Times  03-Jan-2000)


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

THAILAND AIRWAYS INTERNATIONAL: May sell more shares
----------------------------------------------------
Thai Airways International (THAI) said it may increase the
size of its planned share sale by almost a third to 445
million shares in a move to reduce debt more quickly.

The potential addition of 100 million new shares to a share
sale planned for next year would enable the airline to
reduce debt faster, Thai Airways president Thamnoon Wanglee
said, citing advice from financial adviser Credit Suisse
First Boston. Asia's sixth-largest carrier had originally
planned to sell 335 million shares, comprising 235 existing
shares now held by the finance ministry and 100 million new
shares. THAI has not decided on the share price and
portions to be sold to Thais or foreign investors.
(Business Day  30-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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Inc., Trenton, NJ USA, and Beard Group, Inc., Washington,
DC USA. Darryl Henning, Managing Editor, Feliz Ordona and
Cristina Pernites, Editors.

Copyright 2000.  All rights reserved.  ISSN: 1520-9482.

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