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/raid1/www/Hosts/bankrupt/TCRAP_Public/000201.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, February 1, 2000, Vol. 3, No. 22 Headlines * C H I N A & H O N G K O N G * CA PACIFIC FINANCE: Wong cleared of stealing ETERNAL JOINT (HONG KONG)LTD: Facing winding up petition H.P.ENTERPRISE LTD: Facing winding up petition INTERBUILD CONSTRUCTION CO.LTD.: Facing winding up petition KING OCEAN INDUSTRIAL LTD: Facing winding up petition NEW WORLD TELEPHONE: Selling asset stake to cut debts NORTHEAST ELECTRICAL TRANS.: Reports finances to HKSE POSTHING DEVELOPMENT LTD: Facing winding up petition RICH GARMENT LTD: Facing winding up petition WAH NAM GROUP: Debt woes plague company WAH NAM GROUP: Reports asset seizure to HKSE WIN SUCCESSFUL SECURITIES: Court names PWC liquidator WORLD WIDE ONE LTD: Facing winding up petition * I N D O N E S I A * BANK PUTERA MULTIKARSA: BI closes it down PT BUNAS FINANCE INDONESIA: IBRA refusing 50% write-off * J A P A N * ARABIAN OIL CO.: Projects annual loss instead of gain NISSAN DIESEL MOTOR CO.: Parent, banks near aid pact SAISON GROUP: No debt agreement reached yet YUASA TRADING CO.: Expects 16.3B Yen net loss in FY99 * K O R E A * DAEWOO MOTOR: Union - nationalization,not foreign sale DAEWOO MOTOR: Volkswagen interested in company SAMSUNG MOTORS: Renault takeover hits snag SSANGYONG MOTOR: Union - nationalization,not foreign sale SSANGYONG MOTOR: Gov't rules out separate sale * M A L A Y S I A * TIME ENGINEERING: Restructuring plan unveiled * P H I L I P P I N E S * BW RESOURCES INC.: BW head tagged in insider trading PHILIPPINE NAT.BANK: NPLs rise, loan-loss reserves upped PRIMETOWN PROPERTY GROUP: Creditor banks start asset-taking * S I N G A P O R E * LEWIS & PEAT: Receivers put it up for sale * T H A I L A N D * BANGKOK EXPRESSWAY PLC: Enters debt restructuring BANGKOK MASS TRANSIT AUTHORITY: Takeover coule lay ahead BANGKOK METROPOLITAN BANK: Move to question ex-exec blocked SUBMICRON TECHNOLOGY: Investment funds could be available WONGPAITOON GROUP: Reports debt-rehab with creditors to SET ============================== C H I N A & H O N G K O N G ============================== CA PACIFIC FINANCE: Wong cleared of stealing -------------------------------------------- Former CA Pacific boss Jason Wong But-sit has been cleared of stealing $248 million but guilty of false accounting. After two days of deliberations, a jury unanimously acquitted Wong of stealing the money from CA Pacific Finance to fund the $1.24 billion purchase of Central's Century Square in late 1997. Wong's defence was that the building was being bought for the group as a whole, and that he was fully authorised to do so. The $248 million in loans from CA Pacific Finance were part of the initial deposit. He was cleared of all eight theft charges relating to the money. Although the jury believed Wong was authorised to take the $248 million in loans from CA Pacific, it convicted him of falsifying the loan agreement. He and his wife, Elizabeth Kong Suk-yee, were convicted of false accounting between November and December 1997, and face a maximum jail term of 10 years. The loan agreement was between CA Pacific Finance and China Star Consultants, an offshore company set up to purchase the building on behalf of CA Pacific. It granted a total of $373 million in loans to China Star. Wong and his wife were both granted bail over the weekend. Mr Justice Gareth Lugar-Mawson will sentence them on Monday. The couple must report to Wan Chai police station today and tomorrow in the early evening. The verdict brings to a climax a tense three months for the defendants, and a gruelling two-day wait for the jury's decision. Both remained composed as the verdict was read out to the Court of First Instance, but some family members were clearly distraught - Wong's mother in particular. The case was packed with family drama. Wong's elder brother and then chairman of Capital Asia, Alex Wong Ching-ping, had been the one to inform police of the alleged loan irregularities. He went to the Commercial Crime Bureau at the end of January 1998. Wong and Kong were arrested a week later. Alex Wong was among several clan members to take the witness stand in the trial. Jason Wong's mother Edna, father Martin and younger brother James all testified. All had been involved with running CA Pacific at some point, although Jason was known as "the boss" by staff, despite being employed at the time on a consultancy basis. The verdicts come two years after CA Pacific collapsed under the strain of $423 million in loans. Along with the $248 million, a further $171 million in margin loans became doubtful in early 1998, and CA Pacific sank into a liquidity crisis. The collapse led to emotive protests by investors, and prompted a court battle which effectively pitted clients against each other in a bid to recoup their shares. Provisional liquidators have been forced to trace 8,000 clients' claims of missing shares as a result of a judge's ruling. (South China Morning Post 29-Jan-2000) ETERNAL JOINT (HONG KONG)LTD: Facing winding up petition -------------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for March 15 on the petition of Wu Yiu Sun for the winding up of Eternal Joint (Hong Kong) Limited. A notice of legal appearance must be filed on or before March 14. H.P.ENTERPRISE LTD: Facing winding up petition ---------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for February 23 on the petition of Tai Hing Linings Company Limited for the winding up of H.P. Enterprise Limited. A notice of legal appearance must be filed on or before February 22. INTERBUILD CONSTRUCTION CO.LTD.: Facing winding up petition ----------------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for February 16 on the petition of Right Tack Engineering Limited for the winding up of Interbuild Construction Company Limited. A notice of legal appearance must be filed on or before February 15. KING OCEAN INDUSTRIAL LTD: Facing winding up petition ----------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for February 9 on the petition of Pacific Finance (Hong Kong) Limited for the winding up of King Ocean Industrial Limited. A notice of legal appearance must be filed on or before February 8. NEW WORLD TELEPHONE: Selling asset stake to cut debts ----------------------------------------------------- New World Telephone intends to sell 74 per cent of its fixed-line network and international direct dialling (IDD) business to Davnet Digitel Hong Kong for about HK$1.85 billion. New World Development (NWD), which has an 88 per cent stake in New World Telephone, yesterday said it was in negotiations to sell the assets and relevant licences to Davnet Digitel, a subsidiary of Australia-based telecommunications firm Davnet. A price for the acquisition had yet to be finalised. NWD chairman Cheng Yu-tung said NWD would use all proceeds from the sale of the stake to reduce part of its debt and for working capital. Analysts estimated the company's debt at HK$25 billion. Cheng added that the fixed-line and IDD business was worth HK$2.5 billion, valuing a 74 per cent stake at HK$1.85 billion. At this valuation, NWD would reap about HK$1.62 billion from the transaction. Mr Cheng said the Davnet Digitel partnership would help New World Telephone bolster its business in Hong Kong and Australia. The transaction, to be completed by the end of March, marks the fast-growing Australian company's biggest foray into Hong Kong's telecoms market. It comes as a growing number of overseas companies are targeting SAR's telecoms market through mergers or equity investment. Singapore Telecommunications and Cable & Wireless HKT just this week proposed a merger to form a $435 billion Asian telecoms giant. Hutchison Whampoa in November sold 50 per cent of its fixed-line business to United States-based Global Crossing for US$400 million. NWD's arrangement with Davnet Digitel would effectively cut its indirect holding in fixed-line and IDD business to 19 per cent. NWD and Davnet Digitel also plan to form a new telecommunications company that could be listed later this year, Davnet Digitel executive chairman Stephen Moignard said. The new company would include the injection of Davnet Digitel's telecoms investments in Hong Kong, Mr Moignard said. New World might also inject some related assets into the new entity. As part of the transaction, NWD would receive about 2 per cent of Davnet Digitel's Australia-listed parent, as the company would take up 7.1 million shares at A$2.33 (about HK$11.85) each, Mr Moignard said. Dresdner Kleinwort Benson property analyst Terry Ip said a sale price of HK$1.85 billion for the New World Telephone assets "was not bad". Mr Ip said NWD would this year book an exceptional gain of about HK$800 million from the sale. NWD shares yesterday rose 5.31 per cent to HK$14.85, a two-week high. Analysts said NWD's losses from its investments in New World Telephone should narrow following the arrangement with Davnet Digitel. They said NWD's annual losses in New World Telephone was $700 million in the past few years. Following the sale, New World Telephone's leading telecom asset would be its personal communications services, which have an estimated value of HK$3 billion. (South China Morning Post 29-Jan- 2000) NORTHEAST ELECTRICAL TRANS.: Reports finances to HKSE ----------------------------------------------------- After an initial examination of the operations of the Northeast Electrical Transmission & Transformation Machinery Manufacturing Company Limited for 1999, it is expected that the results of the year will record loss for the first time, owing to decrease in sales income from principal activities and prices of products and decline in other income. Investors should note that details of the audited loss data will be disclosed in the annual report and summary. Dealings in A shares in the People's Republic of China need to be suspended for half a day in the morning of 28th January, 2000. (Stock Exchange of Hong Kong 28- Jan-2000) POSTHING DEVELOPMENT LTD: Facing winding up petition ---------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for March 15 on the petition of Hua Chiao Commerical Bank Limited for the winding up of Posthing Development Limited. A notice of legal appearance must be filed on or before March 14. RICH GARMENT LTD: Facing winding up petition -------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for March 8 on the petition of The Daiwa Bank, Limited for the winding up of Rich Garment Limited. A notice of legal appearance must be filed on or before March 7. WAH NAM GROUP: Debt woes plague company --------------------------------------- Wah Nam Group faces the threat of winding up if it fails to repay A$7.79 million (about HK$39.39 million) owed to two companies by February 12. The troubled consumer-electronics firm has received legal threats from HKC China Investment and Sydney-based Investment Austasia, according to a Wah Nam announcement. The demands are related to eight promissory notes issued by Wah Nam Group to the two companies which were due on December 15. The disputes were a result of an acquisition deal between the three companies in which Wah Nam agreed to buy the entire issued share capital of Wah Nam Infrastructure Investment and IAL HK from Investment Austasia to acquire mainland toll-road assets. At the same time, the company disposed its 50 per cent interest in Investment Austasia to HKC. The promissory notes were issued by Wah Nam Group to the two companies on September 15, 1998, as part of the payment for the acquisition. However, Wah Nam said there were also defaults by one, or a combination of, Investment Austasia, HKC and its director Khoo Ee Lam in relation to a cheque for A$1.08 million issued by Mr Khoo as part of the deal. As a result, Wah Nam said it was disputing its obligations regarding the promissory notes. In April, HKC took court action against Wah Nam for an alleged shortfall in making the initial payment for the acquisitions. Wah Nam admitted in yesterday's announcement that it was in substantial cash-flow difficulties. It has been ordered by a court to pay a total of HK$30 million to two other claimants but has so far paid only HK$1.25 million. One of the court orders was made in December, when Wah Nam was told to pay HK$6 million with accrued interest to Excel Nobel Development, a company in which former Wah Nam executive director Samson Chen has an interest. The company is seeking funds to meet all these outstanding payments, Wah Nam said. If it failed to do so, it would not be able to maintain normal operations, the company said. Two weeks ago, the company said it wanted to dispose of its 60 per cent interest in Hangzhou Huanan Engineering Development to raise HK$85 million. Wah Nam shares resumed trading yesterday after a three-day suspension pending the company's announcement, rising two-tenths of an HK cent to close the day at 5.9 cents. (South China Morning Post 28- Jan-2000) WAH NAM GROUP: Reports asset seizure to HKSE -------------------------------------------- Further to the announcement dated 26th January, 2000, the Directors, through Chan Kwok Choi Matthew, Executive Director, wish to announce that on 27th January, 2000, on application by Excel Noble, the bailiffs from the court seized the office furniture and equipments of the Company at its principal office, in enforcement of the court order granted on 17th December, 1999 against the Company for payment of HK$6 million and interest thereon. The total unaudited net book value of the Seized Chattels as at 31st December, 1999 is approximately HK$1 million. If the HK$6 Million Order is not satisfied within 8 days, the Seized Chattels will be sold by auction, the proceeds will be applied for satisfaction of the HK$6 Million Order and the Company will have to make arrangement for substituting facilities. Save for insignificant interference with the administration, the Enforcement Action has not affected, and the sale of the Seized Chattels will not affect, the normal operation of the Company. As disclosed in the announcements dated 14th January, 2000 and 26th January, 2000, the Company is having substantial cash flow difficulties. The Company is negotiating diligently for additional financial arrangements to satisfy the HK$6 Million Order as well as other needs. Further, the Company intended to dispose of its 60% interests in Hangzhou Huanan Engineering Development Co. Ltd. for a projected net cash proceed of HK$85,000,000, to the extent allowed by the injunction granted by the court against the Company on 17th December, 1999. The Directors believe that the Intended HHED Disposal will provide adequate finance to meet the present needs of the Company and thereafter, the total value of the unencumbered assets of the Company will not be less HK$61 million. (Stock Exchange of Hongkong 28-Jan-2000) WIN SUCCESSFUL SECURITIES: Court names PWC liquidator ----------------------------------------------------- The High Court has appointed PricewaterhouseCoopers' Joanne Oswin and Stephen Caswell as provisional liquidators of collapsed brokerage Win Successful Securities. Meanwhile police yesterday arrested a 42-year-old Win Successful employee who was attempting to leave Hong Kong at Lowu. Police earlier this week arrested brokerage owner Albert Au Wai-man and another staff member in connection with allegations that clients' assets were stolen. The two have been released on bail. Police have received 111 investor complaints against the brokerage, involving about $62 million. Provisional liquidators were appointed after the Securities and Futures Commission applied to the High Court for the winding up of Win Successful Securities. The provisional liquidators would take over the assets and management of the suspended brokerage and be responsible for protecting Win Successful clients. "The priority task of the provisional liquidators is to establish the financial position of the company," the commission said. (South China Morning Post 29-Jan-2000) WORLD WIDE ONE LTD: Facing winding up petition ---------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for March 15 on the petition of The Standard Chartered Bank, Limited for the winding up of World Wide One Limited. A notice of legal appearance must be filed on or before March 14. ================= I N D O N E S I A ================= BANK PUTERA MULTIKARSA: BI closes it down ----------------------------------------- Bank Indonesia (BI) announced on Friday night that it had closed ailing Bank Putera Multikarsa after its owner could not come up with fresh funds to recapitalize the bank. Bank Indonesia deputy governor Subarjo Djojosumarto said in a media conference that Bank Putera had a capital adequacy ratio (CAR) of minus 48.15 percent -- far below the minimum 4 percent requirement. "Based on the result of an independent audit, the bank has a negative CAR of minus 48.15 percent and nonperforming loans of more than 80 percent," Subarjo said. He also said all obligations of the bank would be guaranteed by the government. He said the depositors' money would be paid via Bank Central Asia (BCA). The central bank put Bank Putera under the supervision of the Indonesian Bank Restructuring Agency (IBRA) on Dec. 10 after the bank's owner failed to raise funds to settle the bank's negative account at Bank Indonesia. Bank Putera's clearing activities were suspended by the central bank on Dec. 7 after it suffered a negative balance with Bank Indonesia amounting to Rp 278.5 billion (US$38 million) following a run on the bank. The run amounted to Rp 592.3 billion, which dried up its reserves at the central bank and put its account at Bank Indonesia in negative territory. The run on the bank was prompted by reports that it would be taken over by IBRA in the wake of the revelation of a multimillion dollar loan scandal involving the bank's owner, Texmaco Group. But the central bank allowed the bank to resume clearing activities last week, after IBRA provided a temporary loan to settle its negative account at Bank Indonesia. Bank Putera has total assets of Rp 3 trillion. Its third party funds amounted to Rp 413 billion, while credit to its affiliated group reached 69.33 percent of its total lending of Rp 1.3 trillion. Subarjo said that the central bank was still checking on three other banks which had just recently injected funds to improve their capital level. He said that the central bank was making sure that the money did not come from loans or "money laundering". Under the agreement with the International Monetary Fund, Bank Indonesia asked owners of banks whose CAR falls below 4 percent to raise the capital to that level by Jan. 20, otherwise corrective actions would be taken against those failing to comply with the requirement. (The Jakarta Post 29-Jan-2000) PT BUNAS FINANCE INDONESIA: IBRA refusing 50% write-off ------------------------------------------------------- The Indonesian Bank Restructuring Agency is refusing calls by a group of foreign creditors to write off half the debt of finance company PT Bunas Finance Indonesia. IBRA loan workout head Ronald Sinaga said Thursday that the restructuring of Bunas's 1.867 trillion rupiah ($253.2 million) of debt is being delayed by the disagreement. The banks, which include Royal Bank of Scotland Group PLC, Fuji Bank Ltd. and Bank of Boston, favor writing off Bunas's debt to its parent, Ongko Group, which amounts to half of its total debt. Bunas is 60.8% owned by Ongko. "We have stated to the commercial banks that IBRA won't agree to writing off the company's debt to Ongko Group," Mr. Sinaga said. "It's our principle that there will not be any discount in debt repayment." Mr. Sinaga said Bunas's financial problem was partly caused by its intragroup lending and that IBRA doesn't want to see "Bunas get away so easily." (The Asian Wall Street Journal 28-Jan-2000) ========= J A P A N ========= ARABIAN OIL CO.: Projects annual loss instead of gain ----------------------------------------------------- Arabian Oil Co., based in Japan, said it now expects a net loss of 2.4 billion yen ($227 million) for the year through December 1999, compared with its previous forecast of one billion yen in net profit. The Tokyo-based oil producer ascribed the gloomy outlook to its unsuccessful attempt to persuade Saudi Arabia and Kuwait to revise their taxation systems on profits from the so-called Neutral Zone where Arabian Oil drills. The two sides failed to reach an agreement by the end of 1999. "Our profit before deducting a special loss is expected to be around 150 million yen," the company said. For 1999, the company has forecast a special loss of 2.58 billion yen. An affiliate is likely to withdraw from a uranium development project in Niger, west Africa, due to the sluggish in uranium market. (The Asian Wall Street Journal 28-Jan-2000) NISSAN DIESEL MOTOR CO.: Parent, banks near aid pact ---------------------------------------------------- Nissan Motor Co. (7201), Renault SA and the four biggest lenders to Nissan Diesel Motor Co. (7210) are close to a final agreement on a plan to support an overhaul of the ailing truckmaker, The Nihon Keizai Shimbun learned Friday. The help from Nissan Motor and Renault -- Nissan Diesel's top shareholders -- and the banks is expected to keep Nissan Diesel from falling into negative net worth on a consolidated basis when its books are closed for the fiscal year ending March 31. A formal announcement of a restructuring deal is expected as early as next week. Under the blueprint, Industrial Bank of Japan (8302), Fuji Bank (8317), Asahi Bank (8322) and Yasuda Trust & Banking Co. (8404) will help Nissan Diesel put together securitization deals to sell the land on which several of its domestic assembly plants sit. Nissan Diesel is considering plans to issue some 10 billion yen in convertible securities before April. If it goes through with the financing, Nissan Motor will purchase the bulk of the offering, with the banks taking on some securities as well. On the operations side, Nissan Motor and Renault are drawing up plans for joint parts purchasing and development programs with Nissan Diesel, and will give it backing in production and sales. Nissan Diesel is expected to unveil a medium-term restructuring plan as early as this fiscal year, aiming for a return to profitability in fiscal 2001. The firm has been hit with parent-only pretax losses for two years running, and it also has sales units with large accumulated losses from past unprofitable operations. Nissan Motor and Nissan Diesel injected capital totaling 85 billion yen into the sales companies last year. (Nikkei 29-Jan-2000) SAISON GROUP: No debt agreement reached yet ------------------------------------------- Seibu Department Stores Ltd, a core member of the Saison Group, said the group has "not reached any agreement" with Dai-Ichi Kangyo Bank Ltd on a debt disposal scheme for Saison property unit Seiyo Corp. "We can tell you two things -- one is that no agreement has been reached and second is that we cannot comment on details of the negotiations which are just now underway," a Seibu Department Stores spokesman said. The Nihon Keizai Shimbun reported earlier that under the scheme, Saison will repay a total 140 bln yen to DKB, Seiyo's main creditor, over a 3-5 year period beginning from the year to March 2000, making the financial burden related to the bail-out of Seiyo some 300 bln yen. (AFX News Limited 28-Jan-2000) YUASA TRADING CO.: Expects 16.3B Yen net loss in FY99 ----------------------------------------------------- Yuasa Trading Co. (8074) expects to suffer a net loss of 16.3 billion yen in the year through March, compared with a 582 million yen profit in fiscal 1998, company officials announced Friday. Behind the loss is the lump-sum booking of 22.2 billion yen in loss due to the misappropriation of funds by a former section chief. The trading house will forgo its planned 4 yen dividend for the current year, reduce its work force by more than 20% and halve its overseas units to eight. The company plans to introduce an in-house company system in October and to concentrate its management resources on five areas: electric machinery, distribution, housing building materials, construction machinery and food. It will also slim down its sales staff and consolidate its worldwide units from 52 to 38. The number of directors will be reduced by more than half to 10. The company will also ask executives to return their bonuses in full, and will cut executive remuneration by 15- 40%. The number of rank-and-file employees is to be reduced through natural attrition by 150 during fiscal 2000. In order to restore the company's finances to health, it will record an extraordinary loss of 29.6 billion yen in the current year, including a 7.4 billion yen loss from revaluation of real estate. Pretax loss is forecast at 27.3 billion yen. Interperiod tax allocation (tax-deferred accounting) made the net loss smaller than the pretax loss. Shareholder equity will slip to 16.1 billion yen by the end of the current year, compared with 30.1 billion yen a year earlier. (The Nihon Keizai Shimbun Saturday morning edition; Nikkei 28-Jan-2000) ========= K O R E A ========= DAEWOO MOTOR: Union - nationalization,not foreign sale SSANGYONG MOTOR: Union - nationalization,not foreign sale --------------------------------------------------------- South Korea's metal workers' union said it wants the government to nationalize troubled Daewoo Motor Co. and threatened to strike if the government proceeds with plans to sell Daewoo and sister firm Ssangyong Motor to foreign buyers. "Selling the two motor companies to foreign investors means giving up the nation's automobile industry," the 175,000- member Korean Metal Workers' Federation said. General Motors Corp. and Ford Motor Co. had expressed interest in Daewoo Motor, with which GM has an alliance that ended in 1992. The metal workers said selling the two auto makers to a foreign concern would have a catastrophic impact on auto-part suppliers and spell the loss of thousands of jobs. The federation said it had requested meetings with government officials to discuss the sale of the auto makers, which is in the hands of creditors dominated by state-run banks. The federation's statement said 110,000 members working at the two companies as well as Hyundai Motor and Kia Motors would go on strike in late March or early April if the government doesn't drop its sale plans. (The Asian Wall Street Journal 27-Jan-2000) DAEWOO MOTOR: Volkswagen interested in company ---------------------------------------------- Germany's third largest car manufacturer Volkswagen has expressed interest in purchasing Daewoo Motor, further intensifying competition to take over the ailing Korean automaker. An official at the creditors group said Friday that Volkswagen had communicated its interest in Daewoo Motor through Morgan Stanley, who is the international agent for the sell-off. The German firm had not been expected to take interest in Daewoo Motor, as it already has a plant in China producing 450,000 units a year. Local auto industry observers have pointed out that Volkswagen's move could be an effort to check GM and Ford's penetration of Asian markets or even a revival of its 1998 attempt to take over Ssangyong Motor. The creditors group of Daewoo Motor has already begun working out ways for local firms such as Samsung Motor to participate in the contest. "Samsung is expected to retain a stake in Samsung Motors even when the auto unit is sold to Renault, which means Samsung remains a domestic automaker," the official said. Daewoo Motor's bidding office is planning to send out invitations for bids on the firm to six international auto giants. The world' largest carmakers will be competing against each other, an unprecedented event in the history of the auto industry. The other four that have already announced participation are General Motors, Ford, DaimlerChrysler and Fiat. The only one missing of the top six is Toyota of Japan. Besides these foreign automakers, Hyundai Motor and a consortium of small domestic firms have declared their bids for Daewoo. "We plan to send invitation letters only to firms which have better production facilities than Daewoo and have officially expressed interest in acquiring Daewoo," said the official. "But we have difficulty confirming the exact intention of firms." Industry watchers attributed the delay to the planned establishment of the Daewoo Group Restructuring Committee, which will take charge of the restructuring and overseas sales of Daewoo units, including Daewoo Motor. Observers say creditors' interest in turning Daewoo Motor over to local firms has been spurred by fears that the entry of a foreign car firm into the Korean market could result in a huge setback for the local automobile industry, particularly Korean auto parts makers. The Korea Federation of Small Business, which represents several auto parts firms, made it official yesterday that they were throwing their hat into the ring by forming a consortium to make a bid on Daewoo Motor. (Digital Chosun 28-Jan-2000, Korea Herald 29-Jan-2000) SAMSUNG MOTORS: Renault takeover hits snag ------------------------------------------ Renault's planned takeover of South Korea's Samsung Motors has run into trouble over a price dispute, reports said yesterday. But despite the reported difficulties, the two sides are optimistic they will be able strike a bargain by April, industrial sources said. All major media here reported creditors had evaluated the worth of Samsung Motors, the troubled unit of South Korea's leading Samsung Group, at more than twice Renault's reported offering price. The report, based on an audit by sales manager Banque Paribas and US consulting firm KPMG, said Samsung Motor's value was estimated at one trillion won (US$888 million). The French auto giant has yet to officially present its terms, but reports here said it had indicated it would offer only 400 billion won for a stake of around 70 percent, with Samsung retaining up to 30 percent. A Renault delegation led by Vice President Jean-Marc Lefeu visited South Korea last week to discuss Renault's possible acquisition of Samsung Motor, which was put into liquidation under the weight of 4.3 trillion won in debt. The Samsung Group has promised to clear a considerable portion of the firm's liabilities. But sources familiar with the low-profile negotiations here said talks were progressing well and that Renault's acquisition of the firm stood a chance of succeeding by April. Renault hopes the deal will give the French car giant a foothold in the inaccessible but booming Korean car market which could see it take a 5 to 10 percent market share, reports have said. In addition, Renault may later consider exporting some of the locally produced cars to Japan - where the French firm maintains a 36.8 percent stake in Nissan Motors - to save on labor costs, another source suggested. Samsung, which produced only one saloon model, started up with Nissan's technology in early 1998 at the height of Seouh Korea's economic crisis and has seen sales of only 50,000 units. It has a production capacity of 240,000 units a year, but which now only turns out just 2,000 a month. In a separate deal, Renault VI president Patrick Faure said earlier that the heavy vehicle unit was holding talks with Samsung with a view to taking a stake in Samsung's truck division. Faure told the French newspaper Le Monde: "At the end of 1999 we began talks with Samsung but these discussions are being held independently of those under way between Renault and the car subsidiary of the South Korean group. The situation is different from that of cars: the truck subsidiary is not bankrupt. The interest for us is to penetrate an extremely closed market which has very promising potential," Faure said. (Business Day 27-Jan- 2000) SSANGYONG MOTOR: Gov't rules out separate sale ---------------------------------------------- The Financial Supervisory Commission yesterday ruled out the possibility of separating the sale of Ssangyong Motor from the Daewoo Motor deal. Kim Young-jae, a spokesman of the FSC, said during a meeting with reporters that it is practically not possible to do two separate deals for sales of Daewoo Motor and its affiliated Ssangyong Motor. "It is practically not feasible for creditor banks to pursue two deals. There will be too much complications if the two companies are separated for negotiations," he said, strongly indicating that the government will not allow any independent sale of Ssangyong Motor. The senior FSC official was briefing reporters at the Korea Federation of Banks following a government-creditor bank meeting for the Daewoo Group restructuring. Last week, Lee Hun-jai, the new Minister of Finance and Economy, also offered the same view, saying that dividing the two affiliated companies for sales negotiation is not a preferred option. It has been reported that Ssangyong Motor's technological partner DaimlerChrysler has proposed to the government and creditor banks a plan to take over the local auto manufacturer. But now with the government's firm position, major creditor banks of Daewoo Motor also dismissed the possibility of DaimlerChrysler's participation in the Daewoo Motor deal. "If that is the case, DaimlerChrysler will be the least possible candidate as it only proposed to take over Ssangyong Motor," a senior official of the Korea Development Bank, Daewoo Motor's major creditor, told The Korea Times. "This is a complex issue and nothing so far has been finalized. But if the government is determined in obtaining a package sale of Daewoo Motor and Ssangyong Motor, there is not a whole lot the banks can do about it," he said. However, further complicating the issue was the statement from Wee Sung-bok, president and CEO of Cho Hung Bank, a major creditor of Ssangyong Motor, that the bank is willing to do a separate deal as long as it can secure a higher price. "We have stressed to potential bidders that that price is important. Both DaimlerChrysler and General Motors have expressed keen interests in the deal," he said during an interview with Reuters yesterday, leaving the deal wide open to all involved parties. (Korea Times 28-Jan-2000) =============== M A L A Y S I A =============== TIME ENGINEERING: Restructuring plan unveiled --------------------------------------------- Time Engineering, a Malaysian conglomerate, outlined on Friday a restructuring plan involving the repayment of M$4.8bn (US$1.26bn) in debt by selling shares in its telecommunications operations. The shares could be sold to the public and to a foreign investor, as yet unnamed. The company expects the listing of Time Telecommunications Holdings, which it is renaming Time dotCom as it changes the operation's focus to the internet, to raise about M$3.5bn. It will make up the shortfall by issuing new bonds. The restructuring follows Time Engineer's rejection of three other debt solutions and enables the parent to maintain 53.5 per cent control over its telecommunications business. "Because they [potential creditors] are offering fire-sale prices, that's why we are offering a new scheme," said Halim Saad, Time dotCom managing director and chairman of infrastructure conglomerate Renong, which is its parent and Malaysia's biggest corporate debtor. Some of those owed money by Time Engineering - mainly local bankers - were disappointed at having to wait so long to recover their money. But they noted that attempting to force a liquidation would not only be risky - given the authorities' reluctance to allow politically linked businesses to fail - but time consuming and costly, as the company would be valued at far less. Foreign analysts were disappointed with what they saw as an attempt by Time Engineering, which owns Malaysia's largest fibre-optic network, to cash in on the global craze over internet stocks by changing the company's focus and listing it on the stock exchange. "That is the most flagrant abuse of the dot com phenomenon that I've come across," said the head of Malaysian research at a foreign brokerage. Analysts said the timing of the announcement was unfortunate as foreign investors were rekindling their enthusiasm for the country after fleeing its markets at the onset of the regional crisis. Phang Shyue Ming, Time Engineering managing director, believes that the company's M$5bn in assets and its business potential will prove attractive to investors. "There is really no downside risk," said Chris Lee, a manager at the Corporate Debt Restructuring Committee (CDRC), which helped develop the plan. He fully expects there to be enough interest for creditors to be paid in full when Time dotCom is floated on the stock exchange within 24 months of a deal being struck. Some 18.4 per cent of the shares will be sold to the public and 24.6 per cent to a strategic investor. The Sapura Group will own 2.5 per cent and creditors will own 1 per cent as a result of gains from the share sale. The CDRC is to finalise the plan and present it to creditors within the next five months. (Financial Times 31-Jan-2000) ===================== P H I L I P P I N E S ===================== BW RESOURCES INC.: BW head tagged in insider trading ---------------------------------------------------- Something is very wrong when the seller and buyer of shares is one and the same person. BW Resources Corp. president Eduardo C. Lim Jr. may have engaged in insider trading and stock manipulation when a brokerage house where he sits as a member of the board bought a huge block of BW shares. This was the initial finding of the Senate committee on banks and financial institutions which is looking into the stock manipulation of BW shares. Sen. Raul Roco, chair of the committee, said at the hearing that based on public documents Lim was a director of Belson Securities and president and director of BW Resources. Roco said Belson Securities bought 300,000 BW shares on May 31, 1999, jacking up the price from P4 to P12. After a month, Belson sold the shares at P27 per share. "Just based on this, there could be a direct and classical violation of insider trading laws," Roco said. Roco said Lim, who was represented in the hearing by BW Resources lawyer Jose Salvador Ramos, could be held liable for violating the Securities Act. It prohibits the president of a corporation which issued the shares from sitting as a director of a brokerage firm dealing in the shares of the corporation. At the continuation of the Senate probe yesterday, Securities and Exchange Commission Chair Perfecto Yasay reiterated that he was pressured by President Estrada to stop a probe of the alleged stock manipulation involving Dante Tan, a campaign donor to Mr. Estrada's presidential campaign. "I stand by what I said," Yasay said. "I had sworn to tell the truth when I made those statements . . . and I'm reiterating them again." Also present during the hearing was Philippine Stock Exchange president Jose Luis Yulo, who like Yasay, submitted documents subpoenaed by the committee. Both Yasay and Yulo asked Roco to suspend the Senate probe until after their investigating teams finalized their own probe of BW's alleged stock manipulation. "(It's like) investigating the investigators. We would want to be relieved of (further) political pressure," Yasay told the committee. Roco said an SEC investigation report to Yasay, dated Nov. 15, 1999, noted that Lim, president and director of BWRC is also a director of Belson Securities Inc. "When the buyer and the seller is one and the same, then that's what you call a 'wash sale' and that is illegal because you tend to influence the market to go up," the senator said. Roco also said there also could be "churning" in which a series of sales eventually end up with the issuer of the share. "We make the shares go around. We artificially push the market up. Many transactions (are recorded) but it's the same piece of cake," he said. The SEC and Philippine Stock Exchange late last year launched separate probes of wild swings in BW's share price after complaints from investors, some of whom lost large amounts of money. Results of the probes are expected to be announced in early February. After opening at P2.04 in January 1999, BW shares hit a record high of P107 on Oct. 11 after Macau gambling tycoon Stanley Ho accepted an offer from Tan to become the chair of BW Resources. A day later, the stock plunged to P68, leaving many investors saddled with heavy losses. BW shares yesterday fell 90 centavos, or 9.3 percent, to P8.8. Yasay also stood by his claim that the President pressured him to clear Tan, a leading shareholder of BW Resources and the focus of the SEC probe. On Jan. 19, Yasay testified to the Senate committee that the President ordered the SEC to stop its investigation of the alleged trading irregularities in BW shares. A day later, he clarified that there had been no direct order from the President, but only a series of phone calls from Mr. Estrada regarding the probe which Yasay interpreted as a political pressure. Mr. Estrada has denied Yasay's allegations but acknowledged that he made several calls to Yasay to speak about the investigation. Yasay submitted to the Senate committee a copy of a Nov. 17 memo from Mr. Estrada which reminded the SEC chair that, "pursuant to Executive Order No. 60, which was issued on Jan. 13, 1999, the SEC is under the supervision of the Office of the President." "It has come to the attention of my office that the SEC chairman has been issuing policy statements on issues concerning the equities markets which may have been adversely affecting the integrity and reputation of the PSE and its securities trading and other operations," the memo read in part. The memo directed Yasay "to refrain from issuing public statements and policy declarations affecting the securities market, particularly the trading transactions of the PSE without the prior clearance or approval of the Office of the President." Roco said the document "speaks for itself. What judgment call I would arrive at, I would make when I finalize the report." Roco said the Senate probe was expected to be finished by March. The conclusion of the investigations could help restore confidence in the local equities market following allegations of price manipulation in BW. Roco told reporters that the PSE, SEC and the Senate had each set a deadline for their independent probes. "I'm glad the PSE will finish by Feb. 10, the SEC will finish by March 10 and I hope I finish before March." (Philippinne Daily Inquirer 29-Jan-2000) PHILIPPINE NAT.BANK: NPLs rise, loan-loss reserves upped -------------------------------------------------------- Philippine National Bank said its nonperforming loan ratio as of Dec. 21, 1999 stood at 29%, compared with 26% in the previous quarter. According to the bank's published statement of condition, its total nonperforming loans for the period of reached 34.9 billion pesos and discounts reached 98.33 billion pesos. The bank set aside 9.4 billion pesos as a provision for bad loans. Its total assets reached 216.66 billion pesos. "Among the banks, PNB would undoubtedly have the highest (number of) NPLs and NPL ratio as of December 1999," said Angping & Associates Securities analyst Gladys Villanueva in a report. Ms. Villanueva said further deterioration in PNB's asset quality apparently shows failure of its management to improve the bank's performance. "Given the condition PNB is in, there is very little sense to talk about its income prospects," she said, noting that PNB's priority should be to clean up its balance sheet and look for fresh capital infusion. (The Asian Wall Street Journal 27-Jan-2000) PRIMETOWN PROPERTY GROUP: Creditor banks start asset-taking ----------------------------------------------------------- Creditors of the beleaguered Primetown Property Group have started foreclosing on the company's property to cover part of its P1.16 billion worth of debts, well-placed banking sources said. The sources said the bank syndicate, led by Urban Bank, was initially willing to agree on a loan restructuring but later decided to foreclose on the company's assets. The property foreclosed by the creditors amounted to at least P500 million. "We didn't restructure the debts anymore. We started foreclosing one year ago but we haven't made it public," a source said. The Primetown group, which aimed to compete in the leisure, recreation and tourism segments of the property sector, was among the companies badly hit by the currency crisis. "The others in the syndicate also wanted to foreclose," the source said. Banks usually agree to restructure a company's debts if it believed that it could resume a viable footing. They resort to foreclosure proceedings as a last resort if they believed otherwise. Primetown also earlier considered asset-swap deals with some creditors. The property firm had in fact signed a memorandum of agreement with another creditor, United Coconut Planters Bank, for an asset swap. UCPB, in turn, acquired a significant and valuable stake in Makati Prime City in San Antonio Village, Makati, and Kiener Hills in Mactan, Cebu City--two of the Primetown group's fastest-selling and first-rate urban developments. The agreement also gave UCPB ownership of several parcels of land in prime locations on Boracay Island, Aklan, and in the fast-growing area of Metro Tagaytay. With the foreclosure of more of its property, Primetown was not able to push through with the construction of its resort condominium project in Cebu this year. The Gold Coast project in Mactan, Cebu, was supposed to be the company's flagship project for 1999. The Gold Coast project, a resort condotel near Shangri-La Mactan, initially attracted several investors after its launching but Primetown had to suspend operations due to the real estate slump. (Philippine Daily Inquirer 29-Jan- 2000) ================= S I N G A P O R E ================= LEWIS & PEAT: Receivers put it up for sale ------------------------------------------ Rubber dealer Lewis & Peat (Singapore) Pte, Ltd, has been put up for sale by its receivers, according to a document obtained by Dow Jones Newswires. One of the leading rubber trading operations in Singapore, Lewis & Peat (Singapore) had been expected to shut down after it ran into financial difficulties. The firm is part of the Lewis & Peat group, a subsidiary of Indonesia's PT Bakri Sumatera Plantations. The group also has operations in the U.S. and the U.K. and specializes in the popular grades of natural rubber used for tire-making, particularly the standard Indonesian rubber 20 grade. The Lewis & Peat group has been profitable for the past three to four years, according to an individual close to the group, but ran aground late last year after an audit revealed the use of short-term credit to finance long-term projects. Hariwidono, president director of Bakri Sumatera Plantations, said on Jan. 14 that Rabobank, a key creditor of the Lewis & Peat group, refused to roll over its $60 million short-term trading facility after an audit showed that the funds had been misused. The group's directors petitioned for the Singapore division to be put under the interim judicial managementt in December. ON Jan. 11, after the petition was rescinded, the Singapore branch of Rabobank appointed Ho Ai Lian, Nagaraj Sivaram and Ong Yew Huat, partners at Ernst & Young, as receivers. The document from Ernst & Young shows the rubber dealer had unrealized losses of $468,135 on its outstanding contracts as of Jan. 18. Of this amount, $439,068 was from unmatched sales of 20,502 metric tons of natural rubber, and $29,0657 from 29,770 tons of rubber that was unshipped on matched sales and purchases. It has an unrealized profit of $13.751 from its purchses of 23,073 tons of rubber that haven't been sold. Market valuation of the unmatched contracts are derived from the Singapore Commodity Exchange's prices on Jan. 13. Lewis & Peat (Singapore)'s unaudited balance sheet as of Nov. 25 last year shows it owed its short-term creditors $4.58 million. Short-term creditors $4.58 million. Short- term creditors $4.58 million. Short-term credit usually involves that have to be repaid within a year. In this case, the period was 180 days, according to an individual close to the company. Its total assets, excluding current liabilities, total $6.33 million. Money owed to the firm as of Dec. 26 to totaled $3.6 million, from buyers in South America and Singapore. The document also shows that Lewis & Peat (Singapore) holds a total of 35.6 tons of rubber in South Africa, 16.4 tons of which are latex, and 241.92 tons of rubber in Singapore. The Ernst & Young receivers are in preliminary discussions with the exchange to match the contracts in order to pave the way for a third party to take over the transactions. The receivers aren't seeking buyers for the other two Singapore-registered companies -Lewis & Peat (Rubber) Holdings Pte. Ltd. and Lewis & Peat Distribution Pte. Ltd. - because the former is a holding company and the latter a funding vehicle. The three receivers were unavailable for comment, and an Ernst & Young Director involved in the case declined to comment when contacted. (The Asian Wall Street Journal 28- Jan-2000) =============== T H A I L A N D =============== BANGKOK EXPRESSWAY PLC: Enters debt restructuring ------------------------------------------------- Bangkok Expressway Public Company Limited, through Mr. Supong Chayutsahakij, Managing Director, reported to the Stock Exchange of Thailand that due to a decline in traffic volume and higher interest cost since the recession in 1997, the company's cash status had significantly less than its expectation. The Company and subsidiary, therefore, had negotiated with our Lenders for a Debt Restructuring altogether totaling 40,403.17 Million Baht by rescheduling repayment amount and extending repayment period from 9 years to be 12 years. The new repayment schedule had been set up by matching with our expected cash flow in stead of the equally semiannual repayment as required in the old agreement. The Company, hereby, informs the Stock Exchange of Thailand that on the date 27th January 2000, the Company and subsidiary sign the above mentioned Debt Restructuring Term Sheet with the Lenders. As a result of this restructuring, the Company and subsidiary will have higher liquidity and could continuously operate the expressway concession. (Stock Exchange Of Thailand 28-Jan-2000) BANGKOK MASS TRANSIT AUTHORITY: Takeover coule lay ahead -------------------------------------------------------- The city's administration could take over Bangkok's bus service in the next three-to-five months following a decision by the government to nationalise the state enterprises' huge debt. The move is regarded as fair to taxpayers outside Bangkok in the long term, but raises questions about the service's employees and whether the millions of city residents who use the system will see any actual benefits. The long delayed plan was finally given the green light after the national government agreed to assume the Bt20 billion debt of the Bangkok Mass Transit Authority (BMTA). "The Ministry of Finance has agreed in principal to take the BMTA's debt onto the state account," said Transport and Communication Minister Suthep Thaugsuban. His ministry is responsible for the transit authority. "The plan can be completed within the next 3-5 months." The Bangkok Metropolitan Administration (BMA) had balked at taking over the transit authority and its Bt20 billion debt at the same time. The Finance Ministry's agreement to nationalise the debt would mark the last time taxes paid by non-city residents would be used to support a service that benefits only Bangkok residents. However, the plan will likely face tough resistance from the bus system's 3,700 workers, because the city's modernisation plan is expected to affect them adversely. Once the city controls the bus service manpower restructuring is imminent, confirmed deputy Bangkok governor, Thirachon Manomaipibul, yesterday. "According to a study by Thammasat University, 45 per cent of the operational costs involve salaries, some of which are redundant," he explained. The city's restructuring plan will include, for example, a smart card system, which could affect the job of conductor, he added. The city, which plans to set up a company to operate the bus service, wants the restructuring completed within 2-3 years, Thirachon said. However, the Thammasat University study pointed out that it would take five years to implement a smooth restructuring that minimised labour problems. But the question remains for bus users -- what difference will the transfer make? Bangkok residents have long had to endure indifferent service, poorly maintained buses as well as rude drivers and conductors, who are paid up to Bt19,000 and Bt16,000, respectively, in salaries and perks. Since the BMA will operate the bus service, there will be no problem concerning fare increases, Thirachon said. The transit authority and the city's administration have begun discussing the implementation plan for transferring the assets and employees of the public bus agency to a new entity that will be under the supervision of city administrators, Suthep said. A restructuring and privatisation plan for the loss-making State Railway of Thailand (SRT) could also succeed if the state would assume the railway's debt of Bt30 billion, Suthep said at a seminar held by Nation Multimedia Group and the National Energy Policy Office yesterday. "If the government agrees, I would hold talks with SRT employees asking them to accept the change. The SRT incurs more debts every day since it cannot increase the ticket price," he said. However, Deputy Finance Minister Pisit Lee-artham who was on the same panel as Suthep, made no comment concerning nationalising the debt of either the railway or the bus system. Rather, he said the government was in no hurry to privatise its state enterprises considering the present state of its finances and liquidity. "We would sell the shares (of state enterprises) when it is deemed appropriate and provides the most benefit," he added. However, Prime Minister's Office Minister Abhisit Vejjachiva reiterated that the government would adhere to its plan to sell shares of three state enterprises this year -- Thai Airways International Plc, Bangchak Petroleum Plc and Ratchaburi Power Plant. The SRT's privatisation plan looks very similar to the British model, which led to the successful privatisation of everything but the British railway agency, said Ammar Siamwala, president of Thailand Development Research Institute, at the seminar. Ammar said he did not trust the Thai private sector and was afraid that the privatisation would merely be the transfer of a monopoly from the state to the private sector. (The Nation 29-Jan-2000) BANGKOK METROPOLITAN BANK: Move to question ex-exec blocked ----------------------------------------------------------- The Senate yesterday spurned police requests to have Senator Vichien Tejapaibul interrogated for alleged banking violations. The former president of the Bangkok Metropolitan Bank and another top executive, Panya Tantiyavarong, were charged by the Bank of Thailand last year with defying the central bank's orders when they approved guarantees worth 67 million baht for two promissory notes issued by Bangkok Metropolitan Trust Plc, a subsidiary of BMB. The police request to question Mr Vichien was debated in the Senate yesterday. Several senators voiced disapproval of the police handling of the case. Both the police and the central bank have insisted that they are proceeding correctly with the criminal investigations. The police claim they need to question the ex-banker because the statute of limitations on the case will expire on Feb 24. Senator Vichai Thosuwannachinda said the case would have been submitted to the court by now had the police not been too slow in proceeding. He suspected that the ex-banker might be a victim of persecution because the central bank had frozen about one-billion-baht worth of property belonging to the senator and his family against a case involving only 67 million baht. Mr Vichai said that the Senate might agree to remove the immunity and allow Mr Vichien to be questioned if the police had invited the ex-banker for interrogation instead of issuing a summons. Some senators even suggested that the police summons might be part of a political ploy to discredit Mr Vichien as the senator is contesting a Senate seat in Bangkok constituency. After the debate, the Senate voted 129-4 to reject the police request for interrogation. Speaking to reporters after the debate, Senate Speaker Meechai Ruchuphan slammed the central bank for abuse of power by having Vichien family property frozen and banning him from travel abroad. He said Mr Vichien would have no trouble settling the 67 million baht extended as guarantee. Not only Mr Vichien, but also another senator, Narongchai Akkaraseranee, has been prohibited from travelling abroad on the instructions of the central bank, said Mr Meechai. The case, he noted, should serve as a reminder to candidates for the Senate election about the laws they are to write in the future, should they get elected in order that they cannot be abused by law enforcement officers. Rathakorn Nimwatana, assistant governor of the Bank of Thailand, denied the central bank had exceeded its authority in the case. He said if the senators under investigation exercised their right to immunity, resulting in the statute of limitations expiring, it would be "unfair to the judicial process." "If the senators believe they are innocent, then they should defend themselves with the police investigators," Mr Rathakorn said. Pol Maj-Gen Wanchai Srinuannat, deputy commissioner of the Central Investigation Bureau in charge of economic crime cases, said police would have to press ahead with the case with the public prosecutors before the expiry of the state of limitations. As for Mr Vichien, he said police would wait until the Senate was in recess and issue a warrant for his arrest later on. He defended the police, saying that they did not drag their feet on the case. He claimed that police had only recently obtained some substantial evidence to prove the former banker's alleged wrongdoings. (Bangkok Post 29- Jan-2000) SUBMICRON TECHNOLOGY: Investment funds could be available --------------------------------------------------------- Charn Uswachoke wants his creditors to give him one more chance as his talks with potential strategic partners have reached the final stage. If talks succeeded, he said yesterday, new partners would inject US$800 million into Submicron Technology Plc, Mr Charn's ambitious silicon wafer fabrication venture. The new equity would be shared among partners from Asia, Europe and the United States, and Bank of America, the company's adviser, was also willing to take a stake, he said. The US bank yesterday presented a preliminary recapitalisation plan to a meeting of Submicron creditors at Bangkok Bank. Mr Charn said afterwards that he was confident the creditors were satisfied with the plan. A complete plan would be presented in the next two weeks. He said that if he and Submicron were declared bankrupt and their assets auctioned, nobody would gain. Submicron's factory in Chachoengsao, which cost several billion baht to build, was suited for no other purpose but wafer fabrication, he said. The factory's "clean room", the most important element for production, must be maintained constantly, he said. "If it is left idle, then the factory would be worth nothing."The maintenance cost was about two million baht a month, he noted. On Thursday, the Central Bankruptcy Court ordered the assets of Mr Charn and Submicron to be turned over to a receiver as they lost a bankruptcy suit filed by Siam City Bank. Mr Charn and Submicron were given two months to negotiate with creditors to settle 19 billion baht in debts owed to 23 financial institutions. The loans were borrowed, most of them without collateral, by Submicron with Mr Charn as the guarantor. If the creditors agreed to the settlement plan, they could ask the court to reverse its ruling. Otherwise, they would ask the court to declare Mr Charn and Submicron bankrupt. Mr Charn said a loan restructuring plan was taking shape and would be completed soon if the company was not put into receivership. Chatri Sophonpanich, chairman of Bangkok Bank, one of Submicron's major creditors, said earlier that the company would survive only if Mr Charn agreed to enter a formal business rehabilitation programme. But Mr Charn said he had refused to enter the programme under the supervision of the Bank of Thailand, as there were many errors in a draft of the debt restructuring agreement. "For example, the draft stated that Submicron had been operating, when in fact it was not yet operational." He said Submicron's lawyer had tried unsuccessfully to have the central bank's Corporate Debt Restructuring Advisory Committee correct the errors. He also claimed that the committee had urged Siam City Bank to file the bankruptcy suit. Lieut Yodchai Chusri, director of the central bank's Corporate Debt Restructuring Advisory Group, said receivership was one step to encourage restructuring. "This is because the only way for Submicron to disclose its actual financial position to creditors is when it is put into receivership," he said, since in the past it had not disclosed its true position to creditors. Shortly after the court ruling on Thursday, Mr Charn said he would appeal. However, he said yesterday that he had changed his mind. "I think it would be better if I spent my time holding talks with the creditors, instead of fighting the court case, and I am confident that my creditors would accept my plan." (Bangkok Post 29-Jan- 2000) WONGPAITOON GROUP: Reports debt-rehab with creditors to SET ----------------------------------------------------------- Wongpaitoon Group Public Company limited has reported to the Stock Exchange of Thailand that Daiwa Financial Corporation has exercised put option on securitization deal which worth USD 15 million to the Company. As a result, the Company will face tight financial liquidity especially on its working capital. The Company needs to re-negotiate with all creditors in order to re-scheduling debt payment plans. Furthermore, the Company has already signed in for CDRAC under the guidelines of Bank of Thailand. Additionally, the Company reported, Mr. Vijak Sirising, Managing Director, informed the Board on January 27, 2000 that pursuant to its appointment of the sub-committee constituting of Mr. Vijak Sirising, Mr. Amporn Pornvarakorn, Mr.Pompetch Kaewkanchanaroj and Mr. Subhash Bhargava for the purpose of negotiating with the creditors once again to restructure their debts; the sub-committee has held two meetings with the creditors on January 14, 2000 and on January 21, 2000. The outcome so far has been quite encouraging. Some creditors have expressed their willingness to provide the support to the company; others are still considering. Meanwhile the company has already signed in for CDRAC under the guidelines of Bank of Thailand. (Stock Exchange Of Thailand 28-Jan-2000) 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 newsletter co-published by Bankruptcy Creditors' Service, 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR -- Asia Pacific subscription rate is $575 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. *** End of Transmission ***