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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, February 15, 2000, Vol. 3, No. 32

                                   Headlines


* C H I N A  &  H O N G  K O N G *

CHUNG HWA DEVELOPMENT: Star Telecom to the rescue
CHUN TAI HOLDINGS LTD: Facing winding up petition
CHUN TAI INDUSTRIES LTD: Facing winding up petition
COSMOS ENGINEERING LTD: Facing winding up petition
GUANGDONG ENTERPRISES: Boss falls ill, deputy takes over
KING PACIFIC INT'L HOLDINGS: 14.9% sold off by banks
MODERN INT'L TRADING LTD: Facing winding up petition
SILVERWELL INT'L LIMITED: Facing winding up petition
SUREWIN MARKETING AND PROMOTION: Facing winding up petition
TOP KEY ENGINEERING LTD: Facing winding up petition
WINTON HOLDINGS: To reduce its loan defaults


* I N D O N E S I A *

KODEL GROUP: IBRA having trouble restructuring
PT ASTRA INT'L: IRC-led investor group in bidding hunt
PT BANK BALI: Suharto a suspect as probe grows
PT BANK NEGARA INDONESIA: NPLs transferred to IBRA
PT BANK NIAGA: Ibra plans recapitalization, sale
PT INDAH KIAT PULP AND PAPER CORP.: Seeks US$400M loan
TEXMACO GROUP: NPLs transferred to IBRA


* J A P A N *

JAPAN SOLIDARITY COMMITTEE: Declared bankrupt
TOMEN CORP.: To ask Toyota Tsusho to buy new shares


* K O R E A *

CHO HUNG BANK: Bank president reprimanded
DAEGU BANK: Bank president reprimanded
DAEWOO GROUP: Restructuring committee to launch next week
DAEWOO MOTOR: KFSB to tie up with foreigners in bid
HANJIN ENG.AND CONSTR.CO.: Order to pay ex-workers P72M
KOOKMIN BANK: Bank president reprimanded
SAMMI STEEL CO.: Full-blown sale deal due


* M A L A Y S I A *

INTRIA BHD: Debt woes have taken its toll
PSC INDUSTRIES: Proposes debt restructure measures
TELEKOM MALAYSIA: Call to look into telecom graft report


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

PHILIPPINE AIRLINES: PAL asked to pay P29.9M debt
PHILIPPINE NAT.BANK: Bad Loans 41% - not 29% - of total
RURAL BANK OF SAN MIGUEL: President faces Y2K criminal rap


* S I N G A P O R E *

CLOB INT'L: SIAS setting up legal fund for action vs. KLSE


* T H A I L A N D *

BANGKOK METRO.BANK: Privatization hold-up on price
SIAM CITY BANK: Privatization hold-up on price
THAI PETROCHEMICAL INDUS.: Creditors weigh taking control
TOTAL ACCESS COMM.: Mulling debt plan, foreign partner


==============================
C H I N A  &  H O N G  K O N G
==============================

CHUNG HWA DEVELOPMENT: Star Telecom to the rescue
-------------------------------------------------
Star Telecom chairman Nelson Wong Kam-fu has agreed to
rescue debt-troubled Chung Hwa Development, sending the
food and beverage distributors' share price up nearly
fourfold yesterday.

Chung Hwa, to be renamed Star Cyberpower, rose by 19.2
cents to 24.3 cents on turnover of $84.04 million. The
share price rise was despite the possibility the deal may
yet fall through should the Securities and Futures
Commission decide not to grant Mr Wong a waiver from having
to make a general offer.

Mr Wong has agreed to buy 5.5 billion new Chung Hwa shares
for $55 million, which could give him control of more than
35 per cent of the firm's enlarged capital.  Under exchange
regulations, he will have to make a general offer to other
Chung Hwa shareholders, but he has indicated he will apply
for a waiver.

The agreement stipulated that should the SFC not grant the
waiver, Mr Wong will not proceed with the transaction.
Brokers said investors were betting on possible injections
of Internet-related assets by Mr Wong.

"Investors should be cautious amid the market craze on the
so-called shell companies which have risen on technology
backdoor-listing news," said Tung Tai Securities research
manager Kenny Tang Sing-hing.

He said regulators would strike a balance between the
interests of small shareholders, creditors and the acquirer
when deciding whether to grant the waiver.  Star Telecom
was one of Hong Kong's first Internet service providers.

Mr Wong bought a mobile-network company for $97.5 million
and a Shenzhen telecom business for $12 million in July
from Star Telecom - now known as China Online.  Chung Hwa's
unaudited net asset deficit is $122.8 million. It will be
renamed if the agreement is completed. (South China Morning
Post  12-Feb-2000)

CHUN TAI HOLDINGS LTD: Facing winding up petition
---------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for March 29 on the petition of
Bright Trend Limited for the winding up of Chun Tai
Holdings Limited.  A notice of legal appearance must be
filed on or before March 28.

CHUN TAI INDUSTRIES 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
Golden Electrical Trading Company Limited for the winding
up of Chun Tai Industries Limited.  A notice of legal
appearance must be filed on or before February 22.

COSMOS ENGINEERING 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
Helen Law, on behalf of Director of Legal Aid for the
winding up of Cosmos Engineering Limited.  A notice of
legal appearance must be filed on or before March 14.

FAITH EPOCH INT'L 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 Yi
F. Trading Company Limited (in liquidation) for the winding
up of Faith Epoch International Limited.  A notice of legal
appearance must be filed on or before March 14.

GUANGDONG ENTERPRISES: Boss falls ill, deputy takes over
--------------------------------------------------------
The chief of insolvent Guangdong Enterprises (Holdings)
(GDE) has had a stroke and is in hospital.  Zhong
Guangchao, chairman of GDE and its Hong Kong listed arm
Guangdong Investment (GDI) was admitted to hospital on
Monday in Foshan city and his chances of recovery are slim,
according to a senior GDE official.

His illness would have no impact on GDE's US$5.59 billion
debt-restructuring plan, but could have some effect on
company morale, the source said. Shares in GDI dipped after
the company announced Mr Zhong was in hospital.  The dip
eased later, lifting the counter to last trade at $1.30
yesterday.

Kang Dian, the vice-president of GDE and deputy chairman of
GDI, will oversee management of the business group, GDI
said in an announcement.  "Whatever assets the Guangdong
provincial government has promised to inject, the
government will remain committed," he said.

Mr Zhong's inability to direct GDE again will have a
profound impact on GDE's future development.  Mr Zhong, who
has played an important role in negotiating with the
provincial government to bail out GDE during the past two
years, was "irreplaceable", as he was well-respected by the
Guangdong provincial government and GDE internal
management, the source said.

"GDE's development in the next two to three years will
definitely be affected," the source said.  "It's very
difficult to find someone who is both well-connected with
the Guangdong government and knows GDE's operation well."

Mr Zhong was appointed to the top posts in GDE and GDI in
late 1997, during the group's management reshuffle after
GDE ran into liquidity problems.  Prior to the GDE
appointments, Mr Zhong was the secretary general of Foshan
Committee and the mayor of Foshan city.  He has worked
closely with Mr Kang during the past two years on GDE's
debt-restructuring. (South China Morning Post  12-Feb-2000)

KING PACIFIC INT'L HOLDINGS: 14.9% sold off by banks
----------------------------------------------------
King Pacific International Holdings Ltd said shares
equivalent to a 14.9 pct stake have been sold by banks
since the start of the year, having been pledged by
directors who defaulted on personal loans.

It added a resolution was passed at its Feb 8 board meeting
for chairman Cheung Yiu Wing to be replaced by Cheng Chao
Ming.  The company said Cheung would remain an executive
director and continue to be responsible for the day-to-day
mangement of King Pacific. (AFX News Limited  11-Feb-2000)

MODERN INT'L TRADING LTD: Facing winding up petition
----------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for March 22on the petition of Fuva
Construction Engineering Company Limited for the winding up
of Modern International Trading Limited.  A notice of legal
appearance must be filed on or before March 21

SILVERWELL INT'L LIMITED: Facing winding up petition
----------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for March 22 on the petition of
Wong Mei Yee for the winding up of Silverwell International
Limited.  A notice of legal appearance must be filed on or
before March 21

SUREWIN MARKETING AND PROMOTION: Facing winding up petition
-----------------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for March 29 on the petition of
Chung Kwok Leung for the winding up of Surewin Marketing
and Promotion Limited.  A notice of legal appearance must
be filed on or before March 22.

TOP KEY ENGINEERING LTD: Facing winding up petition
---------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for March 22 on the petition of
Ching Hing Wah for the winding up of Top Key Engineering
Limited.  A notice of legal appearance must be filed on or
before March 21.

WINTON HOLDINGS: To reduce its loan defaults
--------------------------------------------
Winton Holdings expects its core business of financing
purchases of taxi licences to be more stable this year as
drivers' income continues to improve due to rebounding
tourist arrivals and economic recovery.

Director Tan Yoke-kong said the better outlook also came
from an expectation that loan losses would be greatly
reduced, as the company had made efforts to restructure
repayment schedules with borrowers to minimise defaults.

The company - with a 20 per cent share in the taxi licence
finance market - had been operating under very tough
conditions during the past two years.  It lost $30.22
million in the first six months of last year, after losing
a more severe $154.12 million during the whole of the
previous year.

Chief financial officer Tam Sin-kei said the net average
monthly income of taxi drivers was about $9,000, down from
$13,000 during the first half of 1997.  The income, coupled
with the relatively stable price of $2.21 million for a
taxi licence has made licences an attractive investment, he
said.  

"Our business outlook improved since prices of licences
stabilised," he said. (South China Morning Post  11-Feb-
2000)


=================
I N D O N E S I A
=================

KODEL GROUP: IBRA having trouble restructuring
----------------------------------------------
The Indonesian Bank Restructuring Agency said it is facing
some problems in restructuring Kodel Group's 1.282 trln
rupiah debt.

IBRA said in a statement, Kodel Group's debt includes 135
mln usd owed by unit PT Permadani Khatulistiwa Nusantara to
a bank syndicate led by PT Bank Dagang Negara.  It said the
group also owes 266.620 bln rupiah to closed Kodel unit PT
Bank Susila Bakti.

It added since Permadani did not paid any principal or
interest charges to the syndicate, BDN and the other
participating banks took a 52 pct stake in the company.

"However, the 52 pct stake was not transferred to IBRA," it
said.

It said that the creditor banks as Permadani majority
shareholders have so far declined to agree to restructure
the debt.  IBRA said two indebted companies in the Kodel
Group also have pledged the same collateral against debt in
the form of 3 hectare land in Ubud, Bali and 1 .1 hectare
land in South Jakarta.  (AFX News Limited  10-Feb-2000)

PT ASTRA INT'L: IRC-led investor group in bidding hunt
------------------------------------------------------
Hong Kong-based fund management company Indonesian Recovery
Company Co. (IRC) has placed a bid with the Indonesian
Banking Restructuring Agency (IBRA) to acquire IBRA's 45
percent stake in PT Astra International.

IRC director Robert Appelby said on Friday that IRC
represented a consortium of investors interested in the
country's largest automaker. He declined to name the other
investors.

"We're looking for an interest from the sale by IBRA, which
is about 45 percent of Astra's shares," Appelby, also a
commissioner at PT Transindo Multi Prima, said after
announcing Transindo's bid to acquire ailing cigarettemaker
PT Bentoel Prima.

Appelby said IRC was offering between Rp 3,500 to Rp 4,500
per Astra share, but said it could be increased if other
investors placed a higher bid.  "It will depend largely on
the due diligence process, we're currently looking at
Astra's business," Appleby said.

IRC was founded last year by Hong Kong-based debt
investment manager Asia Debt Management and Indonesia's
investment bank PT Bhakti Investama to buy corporate debt
and tradable assets in Indonesia.  Bhakti Investama is one
of three listed investment banking firms in Indonesia
offering services in merger and acquisition activities,
financial/debt restructuring and investment services.

Bhakti Investama has cooperated with the Quantum Fund of
U.S. financier George Soros and often represents the
company's interests in Indonesia.  Asia Debt Management,
with fund assets of US$450 million, offers investors the
opportunity to participate in distressed and high-yielding
Asian debt.

Appleby, also a director at Asia Debt Management, said that
IRC was established specifically to facilitate investors
interested in betting their money in Indonesian assets.
"So far we have invested some $100 million in Indonesia,"
he said.

Asked about IRC's chance of winning IBRA's Astra stake,
Appleby expressed confidence.  "We're carefully studying
the competition, but we have a good chance in winning the
process," he said.

A number of other investor group have expressed their
interest in acquiring IBRA's 45 percent stake in Astra
after IBRA's preliminary agreement with a U.S. investor
group, led by Gilbert Global Equity Partners and Newbridge
Capital Ltd, fell through.

Among other parties reportedly interested in Astra are
Lazard Asia Fund together with Credit Lyonnais Securities
Asia (CLSA) and Philippine businessman John Gokongwei with
his financial adviser, Goldman Sachs Group Inc.

JG Summit Holdings Inc., Gokongwei's flagship company,
denied on Wednesday it was planning to buy the Astra
shareholding.  Lazard Asia Fund, a unit of Lazard Freres
and Co., confirmed on Thursday it was preparing to bid for
IBRA's Astra stake.  Lazard Asia denies that the group will
include ousted Astra chief executive Rini Soewandi. Market
talk in Jakarta has linked Rini, who was unseated Tuesday
at a shareholders meeting called by IBRA, with Lazard and
CLSA.

"We are interested in Indonesia strictly as an investor,"
Patrick Cheung, chief executive officer of Lazard Asia, was
quoted by Dow Jones Newswires as saying.

Rini is not financially involved in the Lazard bidding
group, which is keeping an open mind on Astra's future
management if it were to buy IBRA's stake, he said.
In a letter sent last month to IBRA chairman Cacuk
Sudarijanto, CLSA said it was advising an investment group
that was able to quickly conduct due diligence on Astra,
because of the "substantial work that has already been
completed".

CLSA's emphasis on a fast turnaround in its bid came as a
rival consortium selected as preferred bidder found itself
at loggerheads with Rini's management team.  The
Gilbert/Newbridge consortium complained that Astra had
blocked its bid by refusing to open its books, a claim
denied by Rini.

An executive close to the Newbridge investor group said
earlier this week it had yet to decide whether to renew its
proposal or submit a new one.  IBRA has said it will accept
bids from interested investors up until Feb. 23, when the
agency will publish a shortlist of bidders.

A week after Feb. 23, those on the shortlist will have the
opportunity to conduct due diligence on the company, and
place final bids by March 20.  IBRA's Cacuk said Monday
that five bids have already been filed for the Astra stake,
adding that he expected more.  (Jakarta Post  12-Feb-2000)

PT BANK BALI: Suharto a suspect as probe grows
----------------------------------------------
The government named former Indonesian President Suharto
for the first time as an official suspect in a widening
corruption investigation, the latest move by President
Abdurrahman Wahid to try and cleean up the alleged abuses
committed by previous regimes.

Mr. Wahid's predecessor, former President B.J. Habibe,
launched an investigation into Mr. Suaharto's purported
ill-gotten wealth in 1998, but law-enforcement officals
dropped the case last year saying they hadn't gathered
enough evidence.

On Thursday, a senior Indonesianlaw enforcement official
said "new evidence" had been uncovered in relation to mr.
Suharto's chairmanship of scores of foundations that
ostensibly funded everything from mosque building to the
care of war veterans.

Chairul Imam, a director at the attorney general's office,
wouldn't specify what this evidence was but said Mr.
Suharto would be called in for questioning next Monday as
there were "sufficient grounds" to develop a corruption
case. Mr. Suharto also will be questioned about monopolies
and business licenses extended to his children, the
attorney general's office said.

Mr. Suharto transferred control of seven foundations with
asstes reported at $530 million to the Indonesian
government in late 1998. These foundations were exempt from
paying taxes and making financial disclosures and little
was known about their true activities. Indeed, in some
cases their funds were diverted into purely commercial
ventures such as the purchases of major Indonesian mining
and automotive businesses.

In 1990, in a transaction showing their clout and access to
huge funds, three Suharto-led foundations said they had
pumped $420 million into a listed bank they controlled to
cover a loss of that size from foreign exchange trading.

Mr. Suharto has rarely been seen in public since a stroke
and stomach ailments forced him into the hospital in mid-
1999. A lawyer for the 78-year-old leader, Juan Felix
Tampubolon, said Thursday his client hadn't yet received
notice from the attorney general regarding this case and
that ill health might preclude him from testifying. The
lawyer described Mr. Suharto as at 75% of his normal health
and suffered difficulties "understanding what people are
telling him," Mr. Suharto has denied all charges of
corruption levied against him.

The reopening of the Suharto case marks the latest effort
by Mr. Wahid's government to tackle a litany of cases
involving corruption and human rights abuses. Earlier this
month, the president called for the resignation of
Indonesia's top military man, Gen. Wiranto, following a
report that implicated him in the wave of mass violence
that descended upon East Timor after it voted to secede
from Indonesia last year. Gen Wiranto has denied the
allegations and defied Mr. Wahid's order, setting off a
tense standoff between Indonesia's military and executive
branches.

Mr. Wahid has also pressed his attorney general to complete
an investigation into alleged malfeasance at Indonesia's
central bank and PT Bank Bali, where funds were illegally
channelled into Mr. Habibe's political party.
Investigations into human rights abuses in the province of
Aceh have also ensued.

Separately Thursday, the chairman opf the Indonesian Bank
Restructuring Agency, Cacuk Sudarijanto, said he would
pressure a number of the Suharto era's top businessmen to
hand over personal assets to cover debts owed to the
government. These bank owners had reached agreements with
IBRA in 1998 to pledge assets and cash to cover more than
110 trillion rupiah ($15.04) in emergency loans and banking
fines owed by them to IBRA. Mr Sudarijanto said that the
value of these assets have depreciated significantly since
that time, however, meaning more cash more cash would be
needed to be offered to make the government whole. (The
Asian Wall Street Journal  11-Feb-2000)

PT BANK NEGARA INDONESIA: NPLs transferred to IBRA
TEXMACO GROUP: NPLs transferred to IBRA
--------------------------------------------------
Listed state-owned PT Bank Negara Indonesia said it
transferred 19.11 trillion rupiah ($2.58 billion) of
nonperforming loans to the Indonesian Bank Restructuring
Agency. BNI said the amount included loan principal,
interest and penalties.

The bank said the debts included loans to the Texmaco
Group, although it didn't put a value on those loans.
Texmaco owes an estimated 9.6 trillion rupiah to BNI.
Texmaco allegedly received the loans from the bank under
orders from former President Suharto.  BNI and Texmaco are
seeking to restructure the loans. (The Asian Wall Street
Journal  10-Feb-2000)

PT BANK NIAGA: Ibra plans recapitalization, sale
------------------------------------------------
PT Bank Niaga, a private bank taken over by the Indonesian
Bank Restructuring Agency last year, will be recapitalised
in March and then sold, said Ibra chairman Cacuk
Sudarijanto. In Bank Niaga's case, the agency has lined up
four potential buyers, three of which are foreign banks, Mr
Cacuk said. (Singapore Business Times  11-Feb-2000)

PT INDAH KIAT PULP AND PAPER CORP.: Seeks US$400M loan
------------------------------------------------------
PT Indah Kiat Pulp & Paper Corp Tbk, a unit of Asia Pulp &
Paper Co Ltd, is seeking to raise as much as US$400 million
(S$676.4 million) from banks in one of the first and
biggest loans to an Indonesian company since Asia's 1997
financial slump.

BA Asia Ltd, a unit of Bank of America Corp, is manager in
charge of the loan facility, which is a refinancing of
US$400 million five-year loans from early 1997. It will
allow investors to return the bonds to the company after
three years by using a put option this April.

While Indah Kiat hopes to raise US$400 million,
participating banks expect to raise about US$250 million to
replace an undisclosed portion of the original loan that
some banks are planning to return to Indah Kiat in return
for cash.

"We would like to raise that amount," said Jessie Ko, vice-
president, syndicated finance at BA Asia Ltd in Hongkong.
"The overall situation is not that stable, but compared to
one year ago, things are better" in Indonesia, she said.

So far, BA Asia and other participating banks have raised
US$105 million and they hope that other banks will join in
to help them raise at least US$150 million more in what
could serve as the pricing benchmark for all new Indonesian
loans for some time to come.

Citibank NA (Jakarta Branch), PT Bank Danamon Indonesia
Tbk, Credit Industriel et Commercial (Singapore Branch),
and Fuji Bank, Ltd (Singapore Branch) have decided to
participate in the borrowing, BA Asia said.  

"This is the first deal to test the market," Ms Ko said.
The APP group, Asia's largest pulp and paper company
outside of Japan, has been one of the few Indonesian
companies that has been able to borrow internationally
using either loans or bonds since the financial crisis hit
the country.

Banks were invited to participate in the new financings,
which can be denominated in rupiah, yen or dollars, on Feb
2. Those that decide to participate in the new one-year and
two-year loans must respond by March 3.  Banks that decide
to participate can receive an all-in yield of 450 basis
points more than benchmark rates for one-year loans and 550
basis points more than the benchmark rates for the two-year
loan, said BA Asia. APP, Indah Kiat's Singapore-
incorporated parent, will guarantee repayment of the
loans.

According to basispoint, a weekly Asian debt capital
markets magazine, this is one of the most expensive
borrowing costs that any Asian company has had to pay --
among the few companies that could raise funds -- since the
Asia crisis began.

Indonesia is not rated investment grade by any major credit
rating company, and lenders have steered clear of companies
there unless the debt was wrapped -- or enhanced by credit
guarantees from foreign banks or multilateral agencies --
or had collateral attached.  With many companies struggling
to repay their international debts, international banks and
other creditors and investors demand higher returns to
compensate for the country's high repayment risk.
(Singapore Business Times  11-Feb-2000)


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

JAPAN SOLIDARITY COMMITTEE: Declared bankrupt
---------------------------------------------
The Tokyo District Court has declared the Japan Solidarity
Committee for Asian Alumni (JASCAA) bankrupt after its
permit to operate the foundation was revoked last month in
the wake of scandals involving the institution, it was
learned Thursday.

In September, the Foreign Ministry filed a criminal
complaint against a JASCAA director on suspicion of
transferring about 15 million yen from the foundation's
bank account into his personal account. In addition, assets
of the foundation worth about 690 million yen have
disappeared.

JASCCA was under the control of the Foreign and Education
ministries.  (The Daily Yomiuri (Tokyo)  11-Feb-2000)

TOMEN CORP.: To ask Toyota Tsusho to buy new shares
---------------------------------------------------
Tomen Corp. (8003) decided Friday to ask Toyota Tsusho
Corp. (8015) to purchase new Tomen shares through a private
placement, The Nihon Keizai Shimbun has learned.

But the ailing trading house is expected to ensure that
Tokai Bank (8321), its 5% owner, will remain its top
shareholder.  Tomen plans to issue a total of 30 billion
yen in new shares through private placements to financial
institutions and business partners.

Earlier this week, it asked Tokai Bank and other creditors
to waive a total of 200 billion yen in loans.  The purchase
of the new shares by the Toyota Motor Corp. (7203) group
company is expected to boost Tomen's credit standing.
Tomen is forecast to book some 400 billion yen in
extraordinary losses and incur a considerable amount of red
ink in the fiscal year ending March 31.

As a result, the firm will seek permission at its
shareholders meeting at the end of June to reduce capital
by 33 billion yen. It will then issue 30 billion yen in new
shares to recapitalize, issuing half to financial
institutions while asking more than 100 of its business
partners to buy the rest.  Tomen has already worked out a
plan with Toyota Tsusho to tie up in the information
industry. (Nikkei  12-Feb-2000)


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

CHO HUNG BANK: Bank president reprimanded
DAEGU BANK: Bank president reprimanded
KOOKMIN BANK: Bank president reprimanded
-----------------------------------------
The Financial Supervisory Commission (FSC) yesterday
reprimanded presidents of Cho Hung, Kookmin and Daegu Banks
for lax supervision of lending to insolvent corporations,
which caused losses to the banks.

The commission said that it warned and reprimanded 86
former and incumbent officials of Cho Hung, holding them
accountable for 675.9 billion won in non-performing loans.
They incurred a combined loss of 498.1 billion won by
offering loans to 39 insolvent firms. The officials were
also found to have violated regulations concerning
investment in commercial paper (CP) and foreign currency-
denominated securities.

The commission said it expects Cho Hung to post a narrower
net loss of 698.1 billion won in 1999 from a net loss of
1.97 trillion won in 1998. The bank's capital adequacy
ratio stood at 9.72 percent at the end of December.

For Kookmin, the FSC warned and reprimanded 49 former and
incumbent officials for similar reasons. It expected the
bank to post a wider 1999 net profit of 107.9 billion won
from a net profit of 73.4 billion won in 1998. At the end
of September, Kookmin's capital adequacy ratio stood at
11.18 percent.

The FSC also reprimanded 31 officials of Daegu Bank for
causing losses of 77.7 billion won. Daegu Bank was expected
to post a net profit of 52.2 billion won this year,
compared with a net loss of 482.82 billion won in 1998. The
bank's capital adequacy ratio stood at 12.07 percent at the
end of September. (The Korea Herald  12-Feb-2000)

DAEWOO GROUP: Restructuring committee to launch next week
---------------------------------------------------------
The government and domestic creditors yesterday decided to
launch a "Daewoo Group Restructuring Committee" next week,
chaired by Oh Ho-keun who successfully resolved the group's
foreign debt dispute last month.

The top officials of Daewoo's major creditor banks came to
an agreement during a meeting at the Korea Federation of
Banks that Oh will run the organization, supervising the
second phase of the group's recovery.  

Oh said upon accepting the position, "The committee will
execute workout plans prepared by creditor banks. We will
set up a major framework for recovery of Daewoo. Still the
committee will not dictate the policies but to link the
companies with creditor banks in implementing workout
packages," he added.

Oh, presently head of the government's Corporate
Restructuring Coordination Committee  ended successfully
the six-month controversy surrounding Daewoo's $5 billion
foreign debt rescheduling in January.  The new organization
is also expected to monitor the planned sale of Daewoo
Motor and other major operations to foreign investors.

"The sale of Daewoo Motor involves many complex issues.
There are things to be worked out before conducting
negotiations. It is going to be a long process," he said.

The government, creditor banks and Daewoo will supply the
manpower for the committee which will provide guidance
toward the debt-equity swaps for Daewoo units as well as
overseeing other workout-related issues. (Korea Times  11-
Feb-2000)

DAEWOO MOTOR: KFSB to tie up with foreigners in bid
---------------------------------------------------
The Korea Federation of Small Business (KFSB) will push to
form a strategic alliance with DaimlerChrysler, Volkswagen
or Fiat to jointly bid for Daewoo Motor Co., its chairman
said yesterday.

Park Sang-hee, chairman of the KFSB, said that the KFSB-led
consortium will tie up with a major foreign automaker,
excluding General Motors and Ford Motor, to overcome its
financial weakness.

"The small-business consortium is faced with enormous fund-
raising difficulties. So an alliance with the foreign giant
will be inevitable," said Park in a meeting with reporters.
"Concrete results have yet to emerge from negotiations with
foreign firms," he said, ruling out GM or Ford among
potential partners.

But he stressed that talks on a possible tie-up with
foreigners will be pushed on conditions that the KFSB-led
consortium would take control of Daewoo Motor's management
rights. The KFSB, an interest group for small- and medium-
sized firms, and local auto parts makers last month
announced plans to form a consortium to jointly take over
Daewoo Motor.

Daewoo's creditors plan to send bidding invitations to all
aspiring candidates, including Hyundai Motor and Samsung
Group, this and next week. The creditors will screen
letters of intent from all bidders and single out one by
the end of March for exclusive negotiations. The deal will
then be concluded by the end of June.

Meanwhile, French giant Renault revealed plans to produce
about 500,000 units of passenger cars and RVs annually from
Samsung Motors' plant in Pusan, after its takeover deal is
completed.

Renault executives, meeting with Pusan municipal officials
and Samsung's parts suppliers in the port city Thursday,
said that Renault will build SM5 cars for two years after
its merger of Samsung Motors before introducing an upgraded
sedan and RV models. (The Korea Herald  12-Feb-2000)

HANJIN ENG.AND CONSTR.CO.: Order to pay ex-workers P72M
-------------------------------------------------------
The National Labor Relations Commission yesterday handed
down the biggest package of dismissed workers of a Korean-
based engineering company.

The NLRC ordered Hanjin Engineering and Construction Co.
Ltd and its owner Nam Hyum Kim to pay over 400 dismissed
workers P72 million in salary differentials and backwages.

Hanjin was part of a dam and irrigation project in Bohol
that was part of the flagship projects of them president
Fidel Ramos.  Hanjin has been engaged in the construction
of government infrastructure. It was in November 1991 when
the company started working on the Bohol Irrigation Project
and Malinao Dam, both in Pilar, Bohol.

In a 127-page decision, commissioners Irenea E. Ceniza and
Bernabe S. Batuhan said the workers were illegally
dismissed and entitled to holiday pay from 1993 to 1996.
Aside from this, the dismissed workers were also awarded
13th month pay and full backwages from the time they were
dismissed up to the promulgation of the decision.  The
total amount intended for the workers would reach
P66,690,691.28 while P6,676,921.32 was earned as attorney's
fees.

The commission said the workers were not project employees.
"I think this is the biggest so far in Central Visayas when
we talked on salary differentials. At last, after almost
five years, there is finally justice for the workers,"
Ervin Estardante, lawyer for the workers, said.

Hanjin still has 15 days to seek reconsideration of the
NLRC decision.  If the Commission denies reconsideration,
the company can still appeal before a higher court.
Records show that in April 1995, the complainants were
allegedly dismissed by Hanjin without valid cause and filed
labor cases for illegal dismissal and money claims.

Labor arbiter Jose G. Gutierrez favored the complainants
and awarded them their separation pay.  Hanjin filed an
appeal citing grounds that the labor arbiter committed
serious errors in handling its decision.  (The Freeman  11-
Feb-2000)

SAMMI STEEL CO.: Full-blown sale deal due
-----------------------------------------
Negotations on the sale of the bankrupt Sammi Steel Co.
will start in earnest next week.  Inchon Iron & Steel will
negotiate with Sammi creditors on a formal contract to buy
Sammi Steel, based on the results of an inspection into the
financial state of Sammi, to be completed today, and will
finalize the provisional contract by the end of this month,
industry sources said.

Inchon Iron & Steel and Sammi signed a memorandum of
understanding (MOU) on the transfer of Sammi shares on Dec.
30. They agreed to sign the formal contract within 60 days
of the signing of the MOU.

Once the formal contract is signed, Inchon Iron & Steel
will have to report the merger to the Fair Trade Commission
for approval. The FTC is obligated to decide whether to
approve it or not within 60 days.  As a result, the deal is
expected to be finalized by the end of April at the
earliest, sources said. (Korea Times  11-Feb-2000)


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

INTRIA BHD: Debt woes have taken its toll
-----------------------------------------
The road ahead looks bumpy for debt-saddled toll-road
operator Intria Bhd.  After coming close to picking a
winning bid to take over its 45% Intria stake and the
company's debt a few months ago, the company's debt-
restructuring agency has decided to throw open the bidding
agin. Offers are due by the ned of business Friday,
government officials say.

While Danaharta says it only wants to get the best possible
deal for Intria, the company's creditors - owed 655 million
ringgit ($174.5 million) - are crying foul. "Thi latest
move doesn't offer us any comfort," says a banker who
represents one of Intria's local creditors. "It helps
Danaharta, but what guarantee is there that the new owners
will be able to settle our debts in full?" he asks.

The latest twist in this takeover saga shows how Malaysian
corporations, their creditors and the restructuring agency
are still at odds over how to pare debt since the regional
crisis struck in mid-1997. Worse, as the malaysian stock
market rebounds, companies with stakes in debt-ridden
concerns are even more reluctant to give up control of
their assets.

Intria's main source of revenue is a 25-year concession to
collect tolls on the bridge linking norhtern Penang island
with peninsular Malaysia. While the operations generate
strong cash flows, Intria,like mny Malaysian companies that
expanded at breakneck speed in the 1990s, is still saddled
with debt more than two years after the crisis hit.

In mid-1998, its controlling shareholder, privately held
Mekar Idaman Sdn. Bhd., defaulted on a 550-million-ringgit
loan, sending it into receivership. Danaharta, busy
scooping up bad debts held by financial institutions,
snapped up loans owed by insolvent Mekar Idaman. Along with
those obligations came a 45% equity interest in Intria -
recently valued at 155 million ringgit - which Mekar Idaman
had pledged as collateral.

After several months of negotiations, Danaharta and
Intria's creditors agreed to invite bids for the 45% stake,
triggering a four-way scramble for the company. Danaharta
called on the bidders to submit plans that would relieve it
of its equity interest and offer a complete restructuring
plan for Intria's debt.

The two key bidders were MTD Capital Bhd., another toll-
road operator, and construction giant United Engineers
Malaysia Bhd. UEM was Intria's former controlling
shareholder by virtue of its 45% interest in Mekar Idaman
before the company went into receivership. The other two
were listed property company Kejora Harta and Teratai
Sanjung Sdn. Bhd., a little-known private company. All four
were unavailable to comment for this article.

According to bankers close to the bidding, Danaharta
informed bankers in late September that if favored the UEM
proposal because it offered the UEM proposal because it
offered the best deal for the agency. But Intria's
creditors weren't happy with UEM because of the group's
previous ties to Mekar Idaman. "We felt that a company
which controlled Intria before shouldn't be given a second
change at the company. You needed stronger management,"
says on banker involved in the Intrial restructuring.

What's more, UEM and its debt-laden associate company,
conglomerate Renong Bhd., were already fighting numerous
other brushfires with creditors. UEM and Renong badly
needed to restructure their holdings and cut the group's
debt. Today, Renong group's debt load stands at 25 billion
ringgit. The company recently completed a plan to settle
about 8.4 billion ringgit of debt through the issue of
seven-year bonds. No coupon payment will be made on those
bonds, but Renong and its affiliates will have to pay out
16 billion ringgit to bondholders when those issues expire
in 2006.

"The group has so many problems," say s a local banker. "We
will be way down in their list of priorities as Intria
creditors," he says. Bankers also note that, unlike the
proposal offered by MTD Capital, UEM's plan to restructure
Intria's debt didn't involve a full cash settlement.

To break the impasse over the four bids, Intria's creditor
banks decided last November to appoint a financial adviser
to submit recommendations on each offer. Bankers say
Danharta agreed to go along with the creditors on one
condition: that the agency got full compensation for its
interest in Intria.

In late December, RHB Sakura Merchant Bankers Bankers Ltd.,
which was appointed to evaluate the offers, picked MTD
Capital over the other creditors, saying the company's
proposal was the only plan that involved a "100% cash
payment up-front" on Intria's debt. Under that proposal,
MTD would meet Danaharta's demand of 155 million ringgit
for its 45% interest, before settling Intria's entire debt
burden in cash within one year.

That's when the whole process came to a standstill.
Danaharta officials declined to comment on why the MTD
Capital bid didn't proceed, but government officials and
financial executives close to the deal say the creditor
banks missed a Dec. 20 deadline to inform Danaharta that
they woud back MTD Capital.

These officials add that Danaharta was advised by Arthur
Andersen - appointed as receiver for Intria parent Mekar
Idaman - that an open-tender plan would ensure that the
agency got the best value for its Intria stake. Intria
shares currently trade at just about one ringgit each,
valuing Danaharta's 45% interest at 355 million ringgit.

Government officials and financial executives say that
Intria shares are overvalued, largely because of the run-up
in stocks over the past month. "No one will pay a premium
for such a large stake, but Danaharta can surely get more
than 155 million," says one government official close to
the Intria restructuring.

On Jan. 24, Arthur Andersen told the four bidders that an
open tender would be applied to dispose of Danaharta's
Intria holdings. Arthur Andersen is expected to announce
the successful bid next week.

"All Danaharta is looking for is to recover its holdings in
the company," says a senior government official familiar
with the restructuring. "Whoever the new owners, creditors
will surely be able to restructure the debts because Intria
is a viable concern," he says. (The Asian Wall Street
Journal  11-Feb-2000)

PSC INDUSTRIES: Proposes debt restructure measures
--------------------------------------------------
PSC Industries has proposed a debt restructuring exercise,
a bonus issue, and a private placement of new shares.

In a statement to the KLSE, it announced a proposed one-
for-one bonus issue of 79.129 million new RM1 shares and a
propopsed private placement of up to 15.825 million new
shares, representing not more than 10% of the enlarged
paid-up capital.

It also proposed conversion of RM73.722mil of secured bank
borrowings owing to OCBC Bank (M) Bhd into new redeemable
convertible secured loan stocks (RCSLS) at an indicative
price of RM8.50 debt to RM1 nominal value of RCSLS.

Moreover, it proposed conversion of RM480.288mil of bank
borrowings owing to a consortium of creditor banks other
than OCBC into new redeemable convertible preference shares
(RCPS) at an indicative price of RM8.50 debt to RM1 nominal
value of RCPS. (The Star  14-Feb-2000)

TELEKOM MALAYSIA: Call to look into telecom graft report
--------------------------------------------------------
Malaysia's Anti-Corruption Agency should investigate a
report that Japan's Mitsui and Co paid about 300 million
yen (S$4.6 million) in kickbacks to Telekom Malaysia,
rights group Aliran urged yesterday.

Last Friday's Asahi Shimbun said the sum was paid through a
consultancy firm in Malaysia, which turned out to be a
dummy company, in return for the purchase of telephone
switchboards.  The Japanese newspaper said Mitsui -- in a
syndicate with NEC Corp -- won the deal worth more than 10
billion yen.  (Singapore Business Times  14-Feb-2000)


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

PHILIPPINE AIRLINES: PAL asked to pay P29.9M debt
-------------------------------------------------
The Mactan Cebu International Airport Authority is asking
Philippine Airlines to hasten the payment of its debts
amounting to P29.9 million.

The MCIAA board and PAL will meet next week to come with a
compromise on settling the unpaid accounts.  MCIAA finance
department records show that PAL has unpaid accounts
amounting to P29.9 million as of January 31, 2000 including
an old account of P15.38 million (P9.4 million as principal
and P5.91 million as EVAT).

But MCIAA finance officer Crestita Truya said the authority
cannot demand full payment of PAL's debts since half of the
amount is covered by provisions of a crecivership agreement
attested by the Securities and Exchange Commission.

Truya said settlement of the P15.38 million has been placed
under the PAL rehabilitation program. This will be paid
through the SEC be paid through the SEC over five years
with a surcharge of six percent per year. Only then can the
payment be turned over to MCIAA.

According to Truya, what MCIAA is asking from PAL is
payment of its current account amounting to P14.53 million
( P10.46 million principal and P 4.06 million EVAT). The
amount covers rentals and charges on space, lot and
aeronautical facilities for landing, takeoff, parking and
lighting, passenger boarding bridge and weighing scales.

Truya said PAL is willing to pay the back accounts but
refuses to pay the EVAT charges, saying the airlines is
exempted from paying the expanded value added tax by virtue
of President Decree 1590 or the PAL Charter. But Truya said
Republic Act 7616 or the EVAT Law has removed the exemption
granted to PAL as far as value added taxes are concerned.

"The airline company is no longer a government corporation.
The exemption ceased after PAL was privatized," Truya said.

What the MCIAA can do in case PAL insists it will not pay
the EVAT is to refer the matter to the Bureau of Internal
Revenue.  MCIAA general manager Alfonso Alerre said PAL has
begun paying its back accounts on a weekly basis. Alerre,
however, said the MCIAA needs to discuss with PAL the
settlement of its current back accounts.  Last Wednesday,
PAL paid MCIAA P2.5 million for space and lot rentals. (The
Freeman  11-Feb-2000)

PHILIPPINE NAT.BANK: Bad Loans 41% - not 29% - of total
-------------------------------------------------------
A Philippine National Bank official said the bank's
nonperforming loan ratio in December was 41% -not the 29%
it earlier reported - more than three times the average of
the country's banking industry.

The highly place official, who asked not to be named, told
Dow Jones Newswires of to be named, told Dow Jones
Newswires of the higher bad-loan ratio in addressing a
Business World newspaper report. The report quoted industry
sources as saying a discrepancy over loan levels was
recently uncovered in a government-commissioned audit on
the bank's finances by PriceWater-houseCoopers and Lehman
Brothers.

The audit, which hasn't been completed, is a prerequisite
for PNB's privatization. The government holds a 30% stake,
which it must sell by June under the terms of a loan from
the World Bank.

PNB's share price was unchanged Thursday at 89 pesos
($2.20). Analysts said indications of a higher-than-
reported bad loan ratio for PNB aren't surprising given the
bank's large exposure to several companies badly hurt by
the Asian financial crisis that started in 1997, and given
that it had lent large amounts to unprofitable government
companies, such as National Steel Corp. PNB is also the
biggest domestic creditor of debt-laden Philippine Airlines
Inc., whose controlling shareholder, Lucio Tan, owns close
to 50% of PNB.

The PNB official said the bank will need to set aside 23
billion pesos in provisions to cover a bad-loan ratio of
41%. The official said PNB is considering a stock rights
offering to provide sufficient financial cover for the bad
loans.

PNB raised 9.47 billion pesos in September with a rights
offering of 68.7 million new shares to offset erosion of
the bank's capital base due to provisions for bad loans.
The official didn't say how much new equity PNB needs to
raise to strengthen its capital base, but analysts estimate
at least 10 billion pesos is needed.

A higher bad-loan ratio and the prospect of further
dilution of earnings from the issuance of new stock is
ultimately expected to weigh on PNB's share price. (The
Asian Wall Street Journal  11-Feb-2000)

RURAL BANK OF SAN MIGUEL: President faces Y2K criminal rap
----------------------------------------------------------
The owner of a Philippine rural bank faces criminal charges
for drawing down huge loans and later trying to blame the
bank's problems on a cash flow crisis related to the Y2K
glitch, according to official documents obtained Wednesday.

Hilario Soriano, president of the Rural Bank of San Miguel
based in Bulacan province just outside the capital Manila,
has been charged along with a bank director over P15
million ($366,000) borrowed under the director's name.

Central bank of the Philippines documents said Soriano had
declared a bank holiday on Jan. 4, saying, he was forced to
do so because of too massive withdrawals late last year by
depositors fearing New Year disruption. (Sun Star  11-Feb-
2000)


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

CLOB INT'L: SIAS setting up legal fund for action vs. KLSE
----------------------------------------------------------
The Securities Investors Association here (SIAS) is setting
up a legal fund to support Central Limit Order Book (CLOB)
investors who plan to take legal action against the KLSE as
an effort to break the CLOB impasse.

SIAS president David Gerald said in a statement released
yesterday that the association needed to prepare to support
CLOB investors to enforce their rights to have their shares
migrated.

"SIAS has always accepted that a comprehensive solution may
involve some compromise. We have waited long. The KLSE has
not been willing to come to a reasonable solution and gives
no indication that its position will change," he said.

SIAS has appointed Allen & Gledhill to handle the case,
which is aimed at making the Malaysian authorities transfer
frozen Clob shares into the accounts of investors.  The
firm's senior partner, Mr K. Shanmugam, who is also a
Member of Parliament, will oversee it. The firm will
appoint Malaysian lawyers to help fight the case.

Mr Gerald said: "The Kuala Lumpur Stock Exchange has not
been willing to come to a reasonable solution and gives no
indication that its position will change. Sias must
therefore prepare to support investors who want to take
legal action to enforce their rights."

These Sias members would be asked to contribute nominal
amounts to a fund to pay for legal fees.  It could be $150
or $200 per person, depending on the number of investors
who were interested. The number could be high going by a
show of hands at a Sias dialogue yesterday with 1,200
investors.  Mr Gerald told them that details on the course
of action would be available at a meeting with investors in
two or three weeks.

This is, he said, "a turning point" in the saga over some
RM19 billion (S$8.5 billion) worth of Clob shares which
have been frozen by Malaysian authorities since September
1998.  The shares are mostly held by about 170,000
Singapore-based investors, a third of whom are members of
Sias.  Several private Malaysian companies have made offers
to buy or transfer the shares to Clob investors, but the
offers have fallen short of their expectations.  Mr Gerald
reiterated that investors were free to take up any of the
offers.

On the legal suit, he said he was confident that Malaysian
courts would mete out justice fairly. "We know we have a
strong case. The Malaysian Central Depository has a legal
obligation to transfer the shares to Clob investors."  

The suit could take up to two years to be resolved though,
he said.  In a legal course, Sias will represent its
members only. Mr Gerald urged non-members to join the
association so the legal costs could be spread out.  

However, SIAS regarded legal action as a last resort and
was still hoping the KLSE would commit to a reasonable
solution to avoiding the need for legal action in the
Malaysian courts, he said.

SIAS represents 50,000 of the 172,000 CLOB investors who
held Malaysian shares formerly traded on Singapore's CLOB
or over the counter market.  These shares were frozen as
the CLOB market ceased operation following the imposition
of foreign exchange controls by Malaysia in September 1998.

"The CLOB issue could have been resolved expeditiously if
the KLSE had carried out its obligations under the Central
Depository Pte Ltd of Singapore (CDP) and KLSE's subsidiary
Securities Clearing Automated Network Services Sdn Bhd
(SCANS) agreement," Gerald said.

He said the KLSE had insisted instead on private offers as
the only solution with Effective Capital Sdn Bhd (ECSB) and
Bintang Melewar Sdn Bhd as the only offerors.  Only ECSB
has met with the KLSE's requirements. However, it had not
met the CLOB investors' requirements to date, Gerald said.
In addition, neither offer holds binding assurance from
KLSE that it would effect the release of securities from
trading, he added.

"There is no reason why investors should accept private
offers if they do not find them reasonable," he said.
"There is also no legal obligation for CLOB investors to
accept any private offers."

Gerald said SIAS had called on the Singapore Government to
refer the issue to the World Trade Organisation "if there
is no amicable solution."  (Star Online, Straits Times  13-
Feb-2000)


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

BANGKOK METRO.BANK: Privatization hold-up on price
SIAM CITY BANK: Privatization hold-up on price
--------------------------------------------------
Privatisation of Bangkok Metropolitan Bank and Siam City
Bank is expected to drag on a few more months, as bank
regulators stretch negotiations to maximise bid prices with
foreign investors.

Sources said the Bank of Thailand was looking for a minimum
of 30 billion baht per bank. United Kingdom-based HSBC
Holdings is tipped to win Bangkok Metropolitan Bank.
For Siam City, regulators are focusing on two bidding
consortiums: one led by Development Bank of Singapore and
Ankar Capital, and another led by Newbridge Capital and
Singapore-based Capital Tatlee Bank.

While sources close to the talks say the Bangkok
Metropolitan Bank deal is "nearly complete, with no major
obstacles left", talks for Siam City have been bogged down
since both investor groups presented bids below central
bank expectations.  "Both Newbridge and DBS submitted low
prices, using valuation methods different from the central
bank," one executive said.

The key is determining value for performing assets.
Regulators are using local standards, while the bidders are
using stricter methods, such as looking at future viability
of borrowers to service debt.  The result is that final
closing for both deals could be delayed for several more
months. The central bank recently said that both deals
would be announced simultaneously, probably before June.

A delay on the sales could help boost final returns for the
state. "If we can't reach a conclusion on pricing, then
delay is inevitable," said one source. "But on the other
hand, a delay could help prices, as the economy improves
and debt restructuring moves ahead.

"But Somchai Sakulsurarat, president of Bangkok
Metropolitan Bank, said he did not believe any further
delay was necessary, and it would only cause confusion in
the market. "It's up to the Bank of Thailand. If no
announcement is made next month, then we will just move
ahead with our business plan," Mr Somchai said.

Bangkok Metropolitan Bank plans to boost loan growth to 8%
this year, while also targeting debt restructuring of 40
billion baht.  Non-performing loans stand at 150 billion
baht, or 64% of its total loans. The bank believes it can
reduce its bad loans to just 44% by the end of this year.

Improved economic prospects and reduced bad-loan levels
have helped boost the central bank's bargaining power from
when original due diligence was performed a year ago, Mr
Somchai said.  Paitoon Kijsamrej, president of Siam City
Bank, agreed that the bank would continue to focus on
restructuring if the sale was delayed. But he said loan
growth and expansion was difficult under current market
conditions. (Bangkok Post  12-Feb-2000)

THAI PETROCHEMICAL INDUS.: Creditors weigh taking control
---------------------------------------------------------
Creditors of Thailand's biggest corporate defaulter, Thai
Petrochemical Industry PCL, said they are considering
taking control of the company. The move came after TPI had
mounted a last-ditch attempt to block plans for
restructuring its debt.

This development came after the TPI filed an objection in
Thailand's bankruptcy court accusing creditors of acting in
bad faith in a plan submitted for court approval for
restructuring $3.5 billion in debt.

Although TPI later withdrew its objection, creditors
expressed outrage over an action that they said flouted
agreements TPI had signed less than a month earlier.
Creditors may now file a hostile petition that would take
control away from TPI's chief executive, founder and a
substantial shareholder, Prachai Leophairatana, a person
close to the negotiations said.

TPI's management "has yet again misbehaved and the
creditors are not feeling tolerant," the person said. Mr.
Prachai and other senior management couldn't be reached for
comment.

In a conference call late Thursday, the 10-member steering
committee of creditors didn't decide whether to proceed
with a hostile petition. "They are waiting to see what the
company does (Friday)," a participant in the discussions
said.  TPI, Southeast Asia's biggest integrated
petrochemical complex, has become a landmark restructuring
case - highly visible both by the size of its debt and the
list of 148 creditors, including the International Finance
Corp., the U.S. Export-Import Bank, Bank of America Corp.
and Citigroup Inc. unit Citibank.

This new confrontation between creditors and management may
not halt the accelerating pace of debt restructuring in
Thailand, but it still may set back the country's effort to
build confidence in its progress in clearing the heavy
burden of banks, nonperforming loans.

Bank shares suffered as news of TPI's action spread
Thursday. Worst hit were shares of Bangkok Bank PCL, one of
TPI's biggest creditors, which fell 7.1% to 54 baht ($1.44)
on the Stock Exchange of Thailand local board, and by 8.5%
to 86 baht on the foreign board, leading the SET banking
index down 2.2%.

After more than two years of often rancorous negotiation
with TPI on a debt restructuring, creditors' appear to have
nearly exhausted their patience. The two sides had signed a
term sheet in February 1999, agreeing to a five-year debt-
reduction plan under which creditors would swap some
interest payments that were delinquent for 30% of its
equity, and Mr. Prachai would act as plan administrator.
But after half a year of negotiations on the text of a
final agreement, TPI declined to sign and said it should
include plans for raising up to $1 billion in new equity.

Creditors said they would consider capital raising only
after TPI had signed the agreement and set a Jan. 17
deadline. After further intense negotiations, TPI accepted
the agreement on the morning of the deadline, exchanging
letters with creditors clarifying details. Among other
points, TPI agreed not to object to the plan.

TPI and its financial advisers quickly embarked on
discussions for raising new capital, keen to catch an
upturn in the world petrochemical market. Senior executives
expressed the view that relations with creditors had
sharply improved since the agreement on the debt
restructuring. But Mr. Prachai appears to have pushed
creditors for an agreement on his proposal for raising
capital before the bankruptcy court stated its hearing on
the restructuring petition.

On Wednesday, five days before the court hearing, TPI filed
an objection to the plan, challenging the statement that
the company was insolvent, asserting instead that TPI's
assets exceeded its liabilities, and accusing creditors of
acting in bad faith in the controls of the company built
into the plan.

Creditors reacted equally sharply. "From our standpoint,
it's an outrage," a participant in the negotiations said.
The creditors' steering committee issued a prompt ultimatum
to TPI to withdraw the objection by the close of business
on Wednesday or it would cancel their undertakings under
the consensual petition already filed. That would clear the
way for creditors to file a hostile petition under which
they would call for the appointment of a new plan
administrator in place of Mr. Prachai.

TPI moved to withdraw its objection Thursday morning,
creditor says, "Since our objection has significant errors,
we ask the court'' permission to withdraw the objection we
submitted,""TPI said in a statement to the court obtained
by Dow Jones Newswires, a part of Dow Jones & Co., which
published this newspaper. Creditors, however, are taking
little comfort from the withdrawal. "The fact is he (Mr.
Prachai) is in breach of the agreement," a person close to
the talks said of TPI's objection. "If he does it now, how
can the creditors be comfortable that it won't happen
again?" (The Asian Wall Street Journal  11-Feb-2000)

TOTAL ACCESS COMM.: Mulling debt plan, foreign partner
------------------------------------------------------
Thailand's second largest mobile phone operator Total
Access Communication Plc (TAC) is mulling over a plan to
restructure debts of US$300 million to improve its share
price before concluding a strategic partnership deal.

The move is in accordance with the recommendation of its
foreign financial advisers.  TAC's debts of $300 million
are due in 2001, and therefore the advisers have urged the
company to give it priority.

According to an informed investment banker, if TAC
concludes the debt-restructuring deal, its share value is
bound to jump and thus is bound to get a better share price
from a future strategic partner.

Currently TAC's share price on the Singapore bourse is
around S$3.80. The price is expected to surge twofold after
TAC restructures its debts.  TAC's financial advisers had
mooted the debt-restructuring recommendation last year, but
then the company was controlled by several factions, and
thus such an important decision could not be arrived at.
But now the situation has changed after founding member
Boonchai Benjarongkul assumed total control of the company.

Credit Suisse First Boston (CSFB), one of the creditors and
a partner, has played an influential role in urging TAC to
go slow on seeking a strategic partner.  CSFB holds a stake
in TAC through Somers, a UK-based investment firm which
holds 36 per cent stake in United Communication Industry.
The latter is a major shareholder of TAC.

At present TAC is negotiating with Norway's largest telecom
firm, Telenor, along with Australia's largest telecom
company Telstra, for forging a strategic partnership deal.
The deal was to be concluded this month. However, according
to the source, it will be put off by another three months
if TAC shifts its focus on restructuring its debts.

TAC has been known to have solicited several foreign
companies for a strategic deal in the past.  During the
last two years, TAC has approached British Telecom and
Singapore Telecom, but the company failed to strike any
worthwhile deal.  Last year, it initiated talks with Bell
Canada, but later approached Telenor for a deal.

Recently, in a surprise move, it brought Telstra to sit
alongside Telenor on the negotiating table for the same
deal.  Yesterday, a Telstra spokesman confirmed that TAC
and Telstra are in talks for a deal.

"It's still a competitive type of situation. We cannot be
too certain of the way it will proceed," the spokesman
said.

The source said that TAC's last move would be to pressure
Telenor to offer it a good share price. If the deal goes
through, Telenor will gain around 25 per cent stake in TAC.

"They cannot agree on the appropriate share price regarding
the acquisition terms, as also on the management position,"
the source pointed out.  "Apart from Telstra and Telenor,
there is a possibility that TAC still has other overseas
telecom companies in its list of prospective future
strategic partners," the source added. (The Nation  12-Feb-
2000)


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