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/raid1/www/Hosts/bankrupt/TCRAP_Public/000404.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, April 4, 2000, Vol. 3, No. 66 Headlines * A U S T R A L I A * MITSUBISHI: Gov't gets reassurances about Adelaide plant * C H I N A & H O N G K O N G * B.FONDA MARKETING COMMO.LTD: Facing winding up petition BMC DECORATION LTD: Facing winding up petition CIL HOLDINGS LTD: Facing winding up petition DONG-JUN HOLDINGS LTD: Reports debt extension pact to HKSE GUANGDONG INVESTMENT LTD: Reports on stock purchase efforts WAH LEE RESOURCES HLDGS: Reports delay in financial stmt * I N D O N E S I A * PT BERAU COAL: Restructures US$40 million in debt PT CHANDRA ASRI PETROCHEM.CTR: New agency to oversee rehab * J A P A N * ARABIAN OIL CO.: Tough Kuwait drilling rights talks ahead HIKARI TSUSHIN: Unnerves market with loss forecast KANEMATSU CORP.: To sell 30B Yen in bad loans KANEMATSU CORP.: Expects to post 16B Yen group net loss MITSUI ENG.& SHIPBLDG CO.: To post 11.8B Yen net loss NICHIBOSHIN LTD.: To be delisted from TSE TAIHEIYO CEMENT CORP.: To shed plants TOKYU LAND CORP.: To wipe out real estate appraisal loss TOMEN CORP.: Five banks to drop 219B Yen in claims TSUMURA & CO.: Reduces debt to less than 100B Yen * K O R E A * DAEWOO CORP.: Business taxes hindering workout DAEWOO HEAVY INDUSTRIES: Business taxes hindering workout DAEWOO MOTORS: DaimlerChrysler drops bid DAEWOO MOTORS: DaimlerChrysler may joint-bid with Hyundai HANVIT BANK: Suffers huge valuation loss KOREA EXCHANGE BANK: Suffers huge valuation loss SAMSUNG MOTORS: Renault talks extended again SEOUL BANK: Suffers huge valuation loss SSANGYONG MOTORS: To be spun off from Daewoo * P H I L I P P I N E S * PHILIPPINE NAT.BANK: Tan agrees to sell PNB stake UNIWIDE GROUP: BPI plan opposition may stall Casino entry * T H A I L A N D * BANGKOK METROPOL.BANK: Movement to halt foreign sale BUMRUNGRAD HOSPITAL PLC: Reports on rehab plan to SET GSS ARRAY TECHNOL.: Expects shareholder delisting support MEDIA OF MEDIAS PLC: Units revamp debts ROBINSON DEPT.STORE: Clarifies rehab petition submission SIAM CITY BANK: Movement to halt foreign sale SIAM YAMAHA CO.: Thai banks to forgive some loan credits THAI MILITARY BANK: Thaksin plans bid for large stake TOTAL ACCESS COMM.: Partner by June or rating threatened ================= A U S T R A L I A ================= MITSUBISHI: Gov't gets reassurances about Adelaide plant -------------------------------------------------------- Industry Minister Nick Minchin says he has had a letter from the head of Mitsubishi assuring him that the company will remain autonomous despite a take over by Daimler Chrysler. Daimler Chrysler now has a controlling 34 per cent of the company and will have members on the board. Senator Minchin has told the Senate he does not believe this is a threat to the South Australian Mitsubishi plant. "They have made the point and repeated the point that Mitsubishi in South Australia is undergoing a restructuring operation to ensure that it reaches world's best practice," he said. "But the commitments made by Mitsubishi over recent times, I believe, will continue and are based on the government's very strong support for automotive manufacturing in this country," Senator Minchin said. (ABC News Online 03-April-2000) ============================== C H I N A & H O N G K O N G ============================== B.FONDA MARKETING COMMO.LTD: Facing winding up petition ------------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for May 3 on the petition of Precise Management Limited for the winding up of B.Fonda Marketing Communications Limited. A notice of legal appearance must be filed on or before May 2. BMC DECORATION LTD: Facing winding up petition ---------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for May 17 on the petition of Ha Tsz Chung for the winding up of BMC Decoration Limited. A notice of legal appearance must be filed on or before May 16. CIL HOLDINGS LTD: Facing winding up petition -------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for April 12 on the petition of Lo Sing Pan for the winding up of Cil Holdings Limited. A notice of legal appearance must be filed on or before April 11. DONG-JUN HOLDINGS LTD: Reports debt extension pact to HKSE ---------------------------------------------------------- On 29th March, 2000, the Company and Mr. Peng entered into the Supplemental Agreement pursuant to which, amongst other things, the date of payment for the balance consideration of HK$7.8 million under the Agreement shall be extended to 30th April, 2000. In addition, since two conditions precedent to the Agreement (as stated below) have not been fulfilled by Mr. Peng, the deadline for fulfilling such conditions shall be extended to 30th June, 2000 in accordance with the terms of the Agreement. Reference is made to the announcement of the Company dated 18th January, 2000 (the "Announcement") relating to the proposed disposal of property interests in the PRC (the "Disposal") which constitutes a major and connected transaction of the Company. Capitalised terms used in this announcement have the same meanings as those defined in the Announcement. As set out in the Announcement, the balance consideration of HK$7.8 million payable by Mr. Peng to the Company under the Agreement is due to be paid in cash on the earlier of (i) the date of Completion and (ii) 31st March, 2000 or such later date(s) as the parties may agree in writing. On 29th March, 2000, at the request of Mr. Peng, the Company and Mr. Peng entered into an agreement (the "Supplemental Agreement") supplemental to the Agreement, pursuant to which (i) the date of payment for the aforesaid balance consideration of HK$7.8 million shall be extended to 30th April, 2000; (ii) if Mr. Peng fails to pay the aforesaid balance consideration of HK$7.8 million by 30th April, 2000 (or such later date as may be agreed by the parties thereto), the Company shall forefeit the deposit in the amount of HK$2 million previously paid by Mr. Peng absolutely as liquidated damages, and the Agreement shall forthwith be terminated and each party shall have no right and obligation against the other under the Agreement; and (iii) Mr. Peng agreed to bear all the costs in relation to this announcement. As set out in the Announcement, the Disposal was intended to relieve the substantial level of debt burden of the Group and place the Group in a better financial position for its long-term growth and development. To this end, the Directors consider that it is in the better interest of the Company to extend the deadline for the payment date of the aforesaid balance consideration of HK$7.8 million (as compared with the lapse of the Disposal), but at the same time expressly reserve the Company's absolute right to forefeit the deposit in the amount of HK$2 million previously paid by Mr. Peng as aforesaid. In order to safeguard the Company's interest, the Company has demanded a post-dated cheque in the amount of HK$7.8 million from Mr. Peng. In addition, pursuant to the Supplemental Agreement, the Company has requested Mr. Peng to bear all the costs in relation to this announcement. In addition, since two conditions precedent to the Agreement, namely (i) Mr. Peng procuring the respective agreements of (a) two bank creditors of the Chamberside Group, (b) Guangzhou Dong-Jun Development Company Limited and (c) the purchasers of 13 units in Dong-Jun Excelsior Towers (as the case may be) to the Disposal and the release of all guarantees executed by, inter alia, the Company; and (ii) Mr. Peng procuring the completion of transfer of title in respect of certain units in Dong-Jun Plaza to the Company at RMB1, have not been fulfilled, the deadline for fulfilling such conditions shall be extended to 30th June, 2000 in accordance with the terms of the Agreement. The Directors, reports Wong Chun Hung, Vincent, Chairman, were informed by Mr. Peng in writing that due to the complexity involved in negotiating with the bank creditors and other relevant parties, it takes more time to fulfill the aforesaid conditions precedent. (Hong Kong Stock Exchange 03-April-2000) GUANGDONG INVESTMENT LTD: Reports on stock purchase efforts ----------------------------------------------------------- On 16 December 1999, the Company announced that it had entered into the Acquisition Agreement agreeing conditionally to acquire 8,100 shares in, and representing 81 per cent of, the share capital of GH Water Supply (Holdings) Limited. The Acquisition constitutes a very substantial acquisition and connected transaction of the Company under the Listing Rules and is subject to certain disclosure and shareholders' approval requirements. Under Rules 14.08(2) and 14.29(2) of the Listing Rules and Rule 8.2 of the Takeovers Code, the Company is required to despatch a circular containing, amongst other things, additional details of the Acquisition, the Whitewash Waiver and the notice convening the Extraordinary General Meeting (the "Circular") to its shareholders within 21 days after publication of the December Announcement. The Company applied to and obtained from the Stock Exchange and the SFC an extension of time to despatch the Circular to no later than 31 March 2000 subject to the Company making a further announcement in the event there should be any change to the schedule. Details of this extension are set out in the January Announcement. As a result of the scale and complexity of the Acquisition, there are a number of issues which still need to be resolved, including the obtaining of all PRC approval required for the corporatisation of the Dongshen Water Supply Project. Therefore, it will necessarily take additional time to have all the required information ready for inclusion in the Circular. Although the Company is working to achieve an earlier despatch of the Circular, the Company has applied for a further extension of time up to 30 June 2000 for the despatch of the Circular. In the event there should be any change to the schedule as aforesaid, the Company will make a further announcement. (Hong Kong Stock Exchange 03-April-2000) WAH LEE RESOURCES HLDGS: Reports delay in financial stmt -------------------------------------------------------- The Directors announce that there will be a further delay in the publication of the audited results of the Group for the year ended 30 June 1999 as the senior management of the Group are spending a lot of time on the negotiation with the Group's creditors and bankers for the purpose of restructuring the Group's debts, the Company does not have the extra resources to assist the Auditors to complete their audit. Therefore, the Directors have been informed by the Auditors that they have not yet obtained all the information they consider necessary for the purpose of finalising their audit. Moreover, the senior management of the Group are spending a lot of time to assist the financial adviser to conduct negotiations with the three short listed parties (among the six interested investors referred to in the announcement of the Company dated 23 March 2000). It is expected that the results of the Group for the year ended 30 June 1999 and the unaudited interim results of the Group for the six months ended 31 December 1999 respectively will be published on or before 28 April 2000. The 1999 annual report and the interim report for the six months ended 31 December 1999 of the Company will be sent to shareholders and for information only, to warrantholders on or before 5 May 2000 and the 1999 annual general meeting of the Company will be held on or before 31 May 2000. The Company acknowledges that the delay in the despatch of the 1999 annual report and the interim report for the six months ended 31 December 1999 of the Company to its shareholders constitutes a breach of the listing agreement and hence, the Rules Governing the Listing of Securities on the Stock Exchange on the part of the Company. The Stock Exchange has indicated that the extension of the time will not be granted and has reserved the rights to take further action against the Company and/or the Directors for such breach. The delay in the publication of the annual results of the Group for the year ended 30 June 1999 and the unaudited interim results of the Group for the six months ended 31 December 1999 will not constitute a breach of the memorandum of association and bye-laws of the Company and the applicable laws of Bermuda. The 1999 annual general meeting of the Company will be held on or before 31 May 2000. The Group's legal advisers on Bermuda laws have advised that the convening and holding of the 1999 annual general meeting of the Company on or after 31 March 2000 will require the sanction of the Registrar of Companies in Bermuda. The Group has instructed its legal advisers on Bermuda laws to obtain such sanction. Details of the unaudited consolidated results of the Group for the year ended 30 June 1999 were announced in the announcement of the Company dated 14 December 1999. Based on the unaudited consolidated management accounts of the Group for the year ended 30 June 1999, the Group recorded a loss of approximately HK$58.6 million. The results as shown in the unaudited consolidated management accounts of the Group for the year ended 30 June 1999 may be subject to further changes upon the finalisation of the audit by the Auditors. The auditors' report may or may not contain a qualified opinion in respect of the audited financial statements of the Group for the year ended 30 June 1999. Shareholders and warrantholders of the Company and investors are reminded to exercise caution in interpreting the unaudited results as they are unaudited figures only and may be different from the audited results. The Directors have not dealt in any shares and warrants of the Company since 30 October 1999. The Directors have undertaken to the Stock Exchange that they will not deal in the shares of the Company until the later of audited consolidated results of the Group for the year ended 30 June 1999 and the unaudited consolidated results of the Group for the six months ended 31 December 1999 are published. Reference is made to the announcements of the Company dated 14 and 23 March 2000, the Company and its financial advisers are in discussions with three short listed parties for the possible placement. Neither legally binding agreement nor legally binding agreement in respect of the possible placement has been reached yet. In the meantime, shareholders, warrantholders and public investors are urged to exercise extreme caution in dealing in the shares and warrants of the Company. (Hong Kong Stock Exchange 03-April-2000) ================= I N D O N E S I A ================= PT BERAU COAL: Restructures US$40 million in debt ------------------------------------------------- Publicly listed heavy equipment distributor PT United Tractors said its coal mining subsidiary, PT Berau Coal, had signed an agreement with its creditors on the restructuring of a debt worth US$40 million. "The event is undoubtedly the first step in realizing the debt restructuring program of United Tractors and all of its subsidiaries," the company said in a statement. It said the agreement was signed in a ceremony last Wednesday in Singapore, attended by representatives of United Tractors and Berau Coal and the representatives of the bank consortium which provided the loan in 1996. The consortium includes the Singapore branches of Sakura Bank Ltd., Dai Ichi Kang Yo Bank, Fuji Bank, Sanwa Bank, Nippon Credit and the Tokyo branch of Bank of Taiwan. Berau Coal had been involved in talks with the creditors since October 1998 to restructure the loan which expires in 2001. The loan had been used by Berau Coal to build facilities and infrastructure at its coal mines in Lati and Binungan in Kalimantan. Under the agreement, the repayment of the loan will be extended to 2004, but Berau Coal will pay the interest on the loans every three months and the loan's principal every six months. Berau Coal also agreed to delay the repayment of its debt owed to shareholders until it paid back all its debts to the creditors. Berau Coal president Jeffrey Mulyono said both the company's management and the creditors were optimistic about the company's ability to settle the debt, citing that the confidence of investors in Indonesia had returned in tandem with the improvement in the country's social, political and economic status. "The creditors believe that the debt restructuring is necessary given that Berau Coal has performed well. But the economic crisis has led to a decrease in coal prices, thus making the company need more time to recover from the crisis," Jeffrey said. He projected coal prices to pick up in the second half of the year in line with the improvement in the market's demand and the economic recovery. Berau Coal expected to increase its coal output to 4 million tons this year, from 3.3 million tons last year. The output was expected to further increase to 5 million tons in 2001. Aside from the domestic market, the company sells its products to export markets including Thailand, Japan, Chile, Taiwan and other European and Asian countries. Mulyono said the company planned to open a new mine in Sambarata, also in Kalimantan, which is believed to contain high quality coal. Mulyono also said the company was currently conducting corporate restructuring to make it a more efficient organization. The company has been implementing community development programs to promote the welfare of the villagers living around its coal mines and to raise their sense of belonging towards the company. (The Jakarta Post 03-April-2000) PT CHANDRA ASRI PETROCHEM.CTR: New agency to oversee rehab ---------------------------------------------------------- The Indonesian Bank Restructuring Agency (IBRA) said another government agency would take over the task of restructuring the debts of PT Chandra Asri Petrochemical Center (CAPC). IBRA chief Cacuk Sudarijanto gave no reason for the take over by Financial Sector Policy Commitee (KKSK). "There is no problem," he said after attending a KKSK meeting Thursday. The giant petrochemical company, owned by a number of Indonesian tycoons is now under control of IBRA for its large debt to state banks. Sources at IBRA told the newspaper Bisnis Indonesia the task was handed over to KKSK after disagreement with Marubeni, one of CAPC's creditors disagreed with IBRA over the way to restructure CAPC's debts. IBRA earlier said that the debts that could not be repaid by CAPC should be converted into shares of the creditors. Marubeni said CAPC's debt to IBRA could be converted into shares but the government should take over CAPC's debt to Marubeni. CAPC's factory in Cilegon, some 30 km west of Jakarta was built at a cost of US$ 2.04 billion incluidng US$0.14 billion in debt. (Asia Pulse 31-March-2000) ========= J A P A N ========= ARABIAN OIL CO.: Tough Kuwait drilling rights talks ahead --------------------------------------------------------- Keiichi Konaga, president of struggling Arabian Oil Co. (1603), has retained his job despite a vocal chorus accusing him of responsibility for the recent loss of drilling rights to the Khafji oil field on the Saudi Arabian side of the border with Kuwait. Konaga is set to negotiate with Kuwait over renewal of Arabian Oil's concession, due to expire in 2003, in the Kuwaiti sector of the field. Arabian Oil, which is undergoing drastic restructuring, reduced the number of Japanese directors as of March 30 to seven from 12, including the position of Vice President Sozaburo Okamatsu. Both Konaga and Okamatsu were former top bureaucrats at the Ministry of International Trade and Industry. Konaga was expected to name Okamatsu, who joined Arabian Oil in 1997, as his successor after he succeeded in renewing the Saudi rights. Arabian Oil's future now hinges on whether the firm can secure the Kuwaiti drilling rights. Negotiations with Kuwait, however, are expected to be tougher than the Saudi Arabia talks. Arabian Oil has few staff with strong connections to the Kuwait government and business community, and the firm has been unable to find an outside talent willing to take on the difficult task of bargaining with the Gulf state. MITI, where Konaga and Okamatsu once served, offered no help either. Giving Konaga the job was a last resort for Arabian Oil. At a general shareholders meeting held on Thursday, Konaga, admitted responsibility for the lost Saudi concessions, while resolving to tackle the discussions with Kuwait as a priority. "I want to hear about the prospects for the company, not about the president's past responsibility," a shareholder at the meeting said. Konaga has cut off any path for retreat and faces a formidable task ahead. (Nikkei 31- March-2000) HIKARI TSUSHIN: Unnerves market with loss forecast -------------------------------------------------- Japan's Net stocks, already beset by fears of funding problems at Softbank Corp, suffered another blow yesterday when fellow market heavyweight Hikari Tsushin Inc issued an interim profits warning. Hikari Tsushin, the largest mobile phone subscription agency in Japan, said its Web investments combined with poor marketing would lead to a 13 billion yen (S$212 million) operating loss in the half-year to Feb 29. The performance would be Hikari Tsushin's worst since the company, one of Japan's highest-profile Internet investors, went public four years ago and was far off the mark of an earlier company forecast for a six billion yen operating profit. The news caught the market off guard, batting down Japan's Web-related stocks and adding to a growing climate of uncertainty and volatility that has emerged since late February in a sector that represents the promise of Japan's "new economy". "It severely dents people's trust in that company and worries investors that there are similar companies out there equally lacking in transparency," said Garry Evans, strategist at HSBC Securities in Tokyo. News of the loss triggered a sharp slide in the shares of other Japanese Internet-related companies. Softbank Corp fell by its daily limit of 5,000 yen or 5.18 per cent to 91,500 yen. Internet portal Yahoo Japan Corp also slid by its daily limit of seven million yen or 10.1 per cent to 62.3 million. Hikari Tsushin ended ask-only at 73,800 yen, down by its daily limit of 5,000 yen from Thursday's close of 78,800 yen. Mr Evans said Hikari Tsushin still remained highly valued on a price-earnings basis, trading at 100 times' August 2002 earnings, against about 47 times for the broader market. As a result, it looked vulnerable to selling on any whiff of bad news. The loss estimate indicates Hikari Tsushin's main operations may be in trouble but it was still attractive as a holder of massive stakes in Web companies, analysts said. A company spokeswoman blamed the slip into the red on initial costs at Internet-related services including renting servers, launched in 1998, along with lower-than- expected incentive commissions from telecommunications carriers. But analysts said the company had taken pains to assure investors in mid-March that its performance was running smoothly, and as a result yesterday's announcement of a half-year loss caught the market by surprise. "This does not do much for confidence in the sector," a foreign Tokyo-based equities analyst said. Another analyst said the loss put a question mark over its disclosure practice, especially because yesterday's warning came a day after an upward revision to its parent earnings forecasts. On Thursday, it said the sale of part of its shareholdings would generate a 23.9 billion yen profit in the half-year period and the profit would push up parent earnings on a net basis. "That's a very 'old Japan' practice -- to sell shareholdings for window dressing, and this is supposed to be a 'new Japan' company," said the foreign analyst (The Business Times 01-April-2000) KANEMATSU CORP.: To sell 30B Yen in bad loans --------------------------------------------- Kanematsu Corp. (8020) will sell a package of bad loans with a book value of 30 billion yen to foreign financial institutions on Friday, The Nihon Keizai Shimbun learned Thursday. The Tokyo-based trading company, now undertaking aggressive restructuring steps, will sell a package of 140 bad loans, a process known as a bulk sale, to reduce the financial cost of recovering the soured debt. Foreign institutional investors with excess funds are increasingly purchasing bad loans held by Japanese companies. Kanematsu is expected to sell accounts receivable, notes receivable and other business credits for around 2 billion yen. Most debtors have already gone bankrupt and purchasers of the bad loans package will be entitled to receive proceeds after liquidating the bankrupt firms. Bulk sales of bad loans have been popular in the U.S. and Europe since around 1990. In Japan, some financial institutions began similar sales in 1997, when the economy failed to pick up following the collapse of the bubble economy. The Japanese market is estimated at about 10 trillion yen. (Nikkei 30-March-2000) KANEMATSU CORP.: Expects to post 16B Yen group net loss ------------------------------------------------------- Kanematsu Corp. (8020), a Japanese trading company currently undergoing drastic business restructuring, said Friday it now expects to post a group net loss of Y16 billion for the fiscal year ending Friday. Kanematsu had previously projected a group net loss of Y1.3 billion for the year. Group sales are now estimated at Y1.450 trillion, while pretax profit is seen at Y2.20 billion. While the trading company posted a total of Y161.5 billion in special losses on restructuring, it also received Y145 billion in debt waivers from financial institutions this fiscal year, Kanematsu said. During the year, Kanematsu sold and liquidated loss-making subsidiaries, wrote off non-performing debts and sold off country-risk loans. It also span off its textile division, withdrew from housing businesses, sold paper and pulp operations and integrated steel trading subsidiaries. As a result, Kanematsu said its group interest-bearing debt shrank by Y259.2 billion over a year to an outstanding Y640 billion. Kanematsu also said it now expects to post a parent net loss of Y16 billion for this fiscal year, worse than a Y1.3 billion net loss previously projected. Parent sales and pretax estimates are unchanged at Y900 billion and Y1.2 billion respectively. (Nikkei 31-March-2000) MITSUI ENG.& SHIPBLDG CO.: To post 11.8B Yen net loss ----------------------------------------------------- Mitsui Engineering & Shipbuilding Co. (7003) expects to post a consolidated net loss of 11.8 billion yen for the year ending this month, compared with a 4.2 billion yen loss the previous year, the company announced Thursday. The firm previously projected a group net loss of 2 billion yen. The blowout in the revised projection reflects an estimated parent-only net loss of 23.7 billion yen, against profit of 600 million yen a year earlier. The loss is mainly due to the firm's decision to book a 22.1 billion yen extraordinary loss to cover about 43% of a shortfall in funding for retirement allowances. Group pretax profit is likely to jump 48-fold to 4.4 billion yen, thanks to strong performances at a marine development subsidiary and a U.K. boiler-making unit. Parent-only sales will dip 6% to 322 billion yen, but pretax profit will rise 80% to 2.9 billion yen on sales of stockholdings. (Nikkei 30-March-2000) NICHIBOSHIN LTD.: To be delisted from TSE ----------------------------------------- Nonbank financial institution Nichiboshin Ltd. (8582) announced Friday that its liabilities will outstrip its assets for a third straight year in fiscal 1999, making it inevitable that the firm will be delisted from the Tokyo Stock Exchange. Nichiboshin has asked 84 of its financial institutions to forgive 238.7 billion yen in loans, but finds itself facing a third consecutive year of negative net worth because Yasuda Trust & Banking Co. (8404) and four other main banks turned down the request. The TSE delists firms that fail to pay a dividend for five straight years and that suffer negative net worth for three consecutive years. The last time a company was delisted because of those criteria was in 1997. Nichiboshin, which made its TSE debut in 1981, endured losses on real estate investments from Japan's economic bubble period, and its balance sheet began to deteriorate in the early 1990s. The company's creditor banks agreed to support it by forgiving nearly 400 billion yen in debt in a period from fiscal 1995 through fiscal 1998. At the Sept. 30 end of the fiscal half, Nichiboshin had about 216 billion yen of liabilities in excess of assets. The firm was unable to obtain further assistance because "our main banks had concerns about our new rehabilitation plan," said Nichiboshin President Akira Mizuguchi. (Nikkei 01-April-2000) TAIHEIYO CEMENT CORP.: To shed plants ------------------------------------- Taiheiyo Cement Corp. has decided to spin off production operations in Fukuoka and Saitama prefectures next month, company sources told The Nihon Keizai Shimbun. Labor costs and output capacity will both be cut by at least 50% as operations are scaled back to focus on local areas. The restructuring is expected to reduce the leading cement maker's annual fixed costs by more than 5 billion yen. The move is the company's first reorganization affecting production since it was created through the 1998 merger of Nihon Cement Co. and Chichibu Onoda Cement Corp. Some 20- 30 of the 100 employees at each plant affected by the move are likely to lose their jobs. Both the Fukuoka and Saitama facilities are located near other company plants that are highly efficient. Taiheiyo sees the move as enabling it to reduce overcapacity by significantly cutting annual output at both plants. Parts of the plants will also be retooled to handle processing of industrial waste and sewage sludge. The Tokyo-based company earlier announced plans to suspend operations at six group furnaces and is forging ahead with a program to reduce group capacity by 5 million metric tons to 30 million. Taiheiyo hopes reductions realized following the spinoffs will result in further capacity cutbacks totaling 1.5 million tons. The cement market has been shrinking in recent years as Japan's prolonged economic downturn dampened demand from the construction sector. The industry is estimated by analysts to be suffering from overcapacity of about 20 million tons. (Nikkei 03-April-2000) TOKYU LAND CORP.: To wipe out real estate appraisal loss -------------------------------------------------------- Tokyu Land Corp. (8815) will dispose of nearly all its appraisal loss on land holdings in its book closing for the term ended March 31, it was learned Sunday. The major real estate developer will take a charge of well over 20 billion yen to cover paper loss on land held for resale. The move means the firm will record a net loss of 13-15 billion yen for fiscal 1999. The company will post appraisal loss on land purchased during the bubble economy whose value has skidded by close to 50% or more from the book value. Tokyu Land will, however, be able to cover most of the appraisal loss on land it holds as fixed assets with appraisal profit from some property. The company will report an extraordinary profit of 16 billion yen from the securitization of its head office building in Shibuya and sale of another property, but that will not be enough to cover appraisal loss on real estate bought for resale. (Nikkei 02-April-2000) TOMEN CORP.: Five banks to drop 219B Yen in claims -------------------------------------------------- Five financial institutions, including Tokai Bank (8321), have agreed to waive a combined 219 billion yen in loan claims on Tomen Corp. (8003) on Friday, the firms involved said Thursday. The general trading firm is undergoing restructuring due to losses from failed real estate operations in the bubble era. It asked the banks in February to forgive debt of 200 billion yen. Tokai Bank will forgive 169.5 billion yen, Sakura Bank (8314) 16.9 billion yen, Bank of Tokyo-Mitsubishi (8315) 15.4 billion yen, Chuo Trust & Banking Co. (8408) 10.3 billion yen and Norinchukin Bank 6.9 billion yen. Meanwhile, 12 financial institutions have agreed to provide 15 billion yen of the some 30 billion yen in capital Tomen has sought to raise. Tomen will also liquidate and sell 37 related companies by Friday. (Nikkei 31-March-2000) TSUMURA & CO.: Reduces debt to less than 100B Yen ------------------------------------------------- Tsumura & Co. (4540) expects to report interest-bearing liabilities of 96 billion yen at the end of this fiscal year, a reduction of more than 12 billion yen from March 1999 and the first time the figure has been below 100 billion yen in four years. The company is shrinking debt by boosting free cash flow and reducing inventories of its Chinese medicines. This fiscal year, it expects pretax profit to jump 66% to 4.5 billion yen due to measures such as payroll reductions. It also expects net profit to return to the black. Tsumura expects to generate positive free cash flow of more than 10 billion yen in the year ending March 31, compared with 2.7 billion yen a year ago. (Nikkei 31-March-2000) ========= K O R E A ========= DAEWOO CORP.: Business taxes hindering workout DAEWOO HEAVY INDUSTRIES: Business taxes hindering workout --------------------------------------------------------- Subsidiaries of Daewoo have been facing a challenge to their workouts due to heavy taxes on company spin-offs and on the conversion of debt to equity. According to the Financial Supervisory Commission (FSC) and the government-run Corporate Restructuring Coordination Committee (CRCC), eight Daewoo subsidiaries undergoing workouts are subject to W133.39 billion in taxes for their creditors' conversion of debt into equity. In addition, the proposed spin off of Daewoo Heavy Industries from Daewoo Corp. is subject to W33.94 billion in taxes. Observers say the total corporate tax bill for Daewoo's workouts is expected to come in at more than W200 billion, as the firms will also be required to purchase government bonds as a part of their workout regimens. Daewoo subsidiaries have requested that they be exempted from paying business taxes on workout programs, but government authorities claim that they cannot show preferential treatment to the group in levying taxes. The CRCC, however, plans to recommend a revision of current tax laws to the Ministry of Finance and Economy so that taxes arising from the execution of workouts can been dealt with differently. (Digital Chosun 02-April-2000) DAEWOO MOTORS: DaimlerChrysler drops bid ---------------------------------------- DaimlerChrysler is going to give up its bid to acquire Daewoo Motors Co. DaimlerChrysler chairman Jurgen E. Schrempp said in an interview with the Wall Street Journal that the company is no longer interested in acquiring Daewoo Motors. DaimlerChrysler now has a production line in Asia since recently acquiring a 34% share of Japan's Mitsubishi. As a result, there will be less competition for Daewoo Motor, leaving three competitors, Ford, Hyundai and GM in the running. Schrempp added that the company is in negotiations with Hyundai Motor for a minor alliance, which could be made possible by expanding Mitsubishi's existing share in Hyundai. The alliance between two companies is believed be aimed at developing a next-generation driving gear or promoting sales through cross-selling of car models, but auto industry observers are cautious in expecting support from DaimlerChrysler for Hyundai's attempt to acquire Daewoo Motor. (Digital Chosun 31-March-2000) DAEWOO MOTORS: DaimlerChrysler may joint-bid with Hyundai --------------------------------------------------------- DaimlerChrysler, which dropped out of the bidding for control of Daewoo Motor, may reenter the race by tieing up with Hyundai Motor in a joint bid for the troubled automaker, industry sources said yesterday. DaimlerChrysler Chairman Juergen Schrempp said in a press interview Thursday that the German-U.S. auto giant, though not interested in acquiring Daewoo Motor on its own, is interested in an alliance with Hyundai Motor. "I'm interested in working with Hyundai on certain projects," Schrempp was quoted as saying. Mitsubishi Motors, recently acquired by DaimlerChrysler, holds a 2 percent stake in Hyundai Motor. A Hyundai Motor spokesman refused to confirm the rumored alliance with DaimlerChrysler, but said an announcement on a tie-up with foreign automakers is imminent. DaimlerChrysler's withdrawal has turned the bidding into a three-way battle among GM-Fiat, Ford and Hyundai. Daewoo Motor President Chung Ju-ho, however, said the company's overseas sale is the only realistic option for now, raising objections to Hyundai Motor's bid. Meanwhile, Daewoo Motor's trade union went on strike at the automaker's headquarters in Pupyong yesterday in protest at the company's planned sale to a foreign firm. On Thursday, Daewoo said its Lanos model plant and Magnus and Leganzas plant will both close for two days from Friday. "Operations will be suspended for two days in the hopes of alleviating the union strike," a company spokesman said. "It will not sustain big losses as the plants as the three models have stock sufficient for one month." A decision to close down after Monday will be reached depending on the number of workers going on strike, the spokesman said. (The Korea Herald 01-April-2000) HANVIT BANK: Suffers huge valuation loss KOREA EXCHANGE BANK: Suffers huge valuation loss SEOUL BANK: Suffers huge valuation loss ------------------------------------------------ With the local stock markets in the doldrums, several commercial banks suffered huge valuation losses in the first quarter from their stock investments, while a number of more fortunate banks have seen their tech-stock investments shooting up in value. According to bank industry watchers Sunday, Hanvit Bank's investment in firms listed on the Korea Stock Exchange saw a W95-billion valuation loss in the first quarter. The Korea Exchange Bank also incurred W50 billion in stock valuation losses as the value of their shares that had been converted from loans to workout firms dropped. Seoul Bank also reported a W10 billion stock valuation loss due to the market slump. (Digital ChosunIlbo 02-April-2000) SAMSUNG MOTORS: Renault talks extended again -------------------------------------------- Renault and Samsung Motors' creditors have decided to continue talks after failing on Monday to reach agreement on the terms of a takeover by the French vehicle group of the ailing South Korean carmaker. Renault's exclusive negotiating rights expired on Friday, following weeks of talks in Seoul and Paris. Negotiators for both sides have agreed to continue further talks on Tuesday. A dispute over the purchase price of Samsung Motors is the main stumbling block to a deal. Samsung's creditors have agreed to accept Won900bn ($800m), reduced from an initial demand of Won1,100bn ($1bn) in a "goodwill gesture" to Renault, but the French carmaker is sticking to its original offer of $450m. Renault has proposed acquiring a 70 per cent stake in Samsung Motors for $450m, with an immediate cash payment of $50m and the rest coming from future profits. Hanvit Bank, the main creditor for Samsung Motors, said it wanted a full cash payment. Renault has also proposed that Samsung group, the parent of Samsung Motors, should keep a 30 per cent stake, but the group wants to cut its shareholding to 20 per cent to reduce its financial exposure. Samsung Motors has debts estimated at Won4,200bn against assets of Won3,500bn. The Samsung group has offered to pay Won 2,400bn of the debts at Samsung Motors by the end of the year. Samsung Motors, the smallest of South Korea's three carmakers, was in operation for only a year before being placed in court receivership in June 1999. The purchase would give Renault a way into South Korea's car market, the second largest in Asia, which is closed to foreign car imports. (Financial Times 03-April-2000) SSANGYONG MOTORS: To be spun off from Daewoo -------------------------------------------- Daewoo Motor is likely to spin off Ssangyong Motors at the end of April. The car firm, which makes the popular Musso SUV, was taken over by the automobile unit of Daewoo in January 1998. Ssangyong filed an application for the spin off with the Korea Fair Trade Commission, after creditors converted W130 billion in loans into equity in March, increasing their stake in the car company to 60.92%. As a result, Daewoo chair Kim Woo-choong's stake in Ssangyong Motors shrank from 25% to 9.77%, while Daewoo Motor's stake dropped from 26.98% to 10.54%. Ssangyong Motor said, however, that its separation from the Daewoo group would not rule out the possibility of it being sold off jointly with Daewoo Motor as was planned. (The Digital Chosun Illbu 02-April-2000) ===================== P H I L I P P I N E S ===================== PHILIPPINE NAT.BANK: Tan agrees to sell PNB stake ------------------------------------------------- Taipan Lucio Tan is set to sign today or tomorrow in Malaca�ang a revised memorandum of agreement with the Philippine government spelling out his intention to sell his 46-percent stake in Philippine National Bank together with the government's 30-percent interest. Finance Secretary Jose T. Pardo said Friday the government has sent a revised MOA to Tan "and we hope he does not have any more objections." Pardo said he has also asked President Estrada to witness the signing of the MOA and that the finance secretary be granted "full powers" in conducting the block sale of about 76 percent in the bank. "I want the President to authorize me to get the bidding process started out. We still want to bid out the bank in or before June," he noted. Pardo admitted that the taipan had rejected a draft MOA presented to his lawyers last Monday. "We have changed the MOA and we have indicated a floor price of P160," Pardo said. In the draft MOA sent to Tan's lawyers, the finance department only indicated that PNB shares would be sold at market price or a still-to-be-set floor price, whichever is higher. The DOF was looking for a window to bring down the floor price from P160 per share, which some analysts considered "really huge" for a bank that has a ratio of nonperforming loans of at least 30 percent and with an earning asset of less than 50 percent. "Lucio (Tan) told us not to make the deal any more difficult than it is so we put there a floor price of P160 per share which he claimed was the price at which he bought his stake in PNB," Pardo said. With Tan's 46 percent and the government's 30 percent, the block is expected to fetch a premium over prevailing market price of a little over P80 per share. Hong Kong-based fund manager Templeton Asset Management and the PNB Retirement Fund have also indicated their intention to sell their respective 12.9 percent and 4.5 percent holdings in PNB. Pardo said there were three foreign groups interested in acquiring PNB, but he declined to name these firms. Finance Undersecretary Cornelio Gison, who drafted the terms of the MOA, said the floor price was "something that must be negotiated by both parties." Pardo clarified that Tan's agreement to sell with the government was really anchored on the floor price of P160 per share. "That was the condition he had set," he noted. Bangko Sentral Governor Rafael Buenaventura earlier said the government could give P160 per share to Tan if he would only agree to sell together with the State. He said Tan acquired his stake in PNB at about P140 per share on the average. The taipan only has 10 shares to his name while about 19.22 percent is held by his relatives and associates. Three investment firms said to be related to Tan also have 10.59 percent of PNB. (The Philippine Daily Inquirer 03-April-2000) UNIWIDE GROUP: BPI plan opposition may stall Casino entry --------------------------------------------------------- Over $100 million in investments will go up in smoke if the Bank of the Philippine Islands' (BPI) continues to oppose the revised rehabilitation plan of cash-strapped Uniwide Group of Companies. BusinessWorld learned that BPI remains the lone creditor bank of the cash-strapped retail group which has not given its nod on the amended rehab plan. Approval of all the creditors is required by Uniwide white knight, French retail giant Casino Guichard-Perrachon SA, before it makes its entry in the company this June. Former Securities and Exchange Commission (SEC) commissioner Monico V. Jacob, chairman of the interim receivership committee (IRC) for Uniwide, said in a recent interview that Casino will walk away, along with its planned four-billion-peso (US$97.4 million at PhP41.086:US$1) investment in the local group -- if Uniwide will not be turned over debt-free. "They (BPI) constitute 10% of the total (debt). If they will not approve the revised rehabilitation plan, then Casino, in accordance with our memorandum of agreement, will walk away. But it's going to be a big waste. It is an investment that is substantial. I think it a boon to the Philippines that Casino would like to come in. We will be saving around 3,500 to 4,000 jobs. "In addition to that, they have landbanked five areas and chances are when they put up the stores in the next two years, there will be additional investments that's going to come in. Well, at least even if they don't bring in the money, they'll probably source it locally. In addition to that, they need to store up on the inventory. They need to refurbish the stores. So we're looking at a fairly large amount of money that's going to be invested by Casino outside of the $100 million," he said. Casino's planned entry in Uniwide will be the first major investment in the local retail sector after the passage of the retail trade liberalization law. The two parties signed a memorandum of understanding early February where Casino has offered an enterprise value for the Uniwide's business, which includes the listed holding company, the retail business and selected real estate assets used or to be used for operations, of approximately PhP4 billion. Casino is also planning to put in at least another PhP1 billion ($24.3 million) to replenish stocks for at least 10 stores. The French group is also looking at putting up five more stores in the next five years to be located in Cebu, Baguio, Mandaue, Iloilo and Cubao. Among Uniwide's secured and unsecured creditors, BPI is the lone creditor bank which has remained firm on its decision not to approve the revised rehabilitation plan. Exposure in Uniwide amounts to PhP720.08 million ($17.5 million). Land Bank of the Philippines, with an exposure of PhP676.92 million ($16.5 million), and East West Banking Corp., with PhP134.28 million ($3.5 million), have also opposed the plan but sources said the two banks will likely give their approval before June. BPI is opposing one of the provisions in the amended rehab package which involves a huge cut in the payment of Uniwide's debts. The group is asking for a 20% discount on cash payment to banks and 40% and 50% discount to contractors and trade suppliers, respectively. "It has to be uniform to all banks. It has to be fair to everybody. We'll just have to continue talking to them, I guess. Worse comes to worst, Uniwide's operations -- where net sales is less than operating income -- eventually would have to fold up. And I believe we should go with it. Otherwise, I don't think we can continue," Mr. Jacob said. But despite the opposition, the IRC has once again asked the SEC to immediately approve the amended rehab plan after a majority of both the secured and unsecured creditors has agreed on the terms of the plan. (The Business World 03- April-2000) =============== T H A I L A N D =============== BANGKOK METROPOL.BANK: Movement to halt foreign sale SIAM CITY BANK: Movement to halt foreign sale ---------------------------------------------------- A movement to block the sale of Bangkok Metropolitan Bank (BMB) and the Siam City Bank (SCIB) to foreign investors is gaining momentum with a group of former politicians, academics, business people and those working under the umbrella of non-government organizations (NGO) who have recently started campaigns. Boontiam Khemapirath, a former Bangkok MP, disclosed over the weekend that the group, labeling themselves "Ruam Jai Thai Koo Chart" (United Thai National Salvation), will present a letter to His Majesty the King seeking royal support against the sale. Boontiam said all 100 founding members of the "Ruam Jai Thai Koo Chart" will sign the letter which is to be submitted to HM the King today. Members of the group have donated cash amounting to one million baht to open a savings account with one of the Thai banks being placed on sale. The account is to serve as "seed money," with plans to accumulate more funds through vigorous campaigning to the public. The eventual aim being to buy the ailing BMB and SCIB, Boontiam added. Suchart Thadathamrongvej, a lecturer at Ramkamhaeng University, disclosed that the group will also send letters to Prime Minister Chuan Leekpai and Finance Minister Tarin Nimmanahaeminda to halt the sale of the two banks. Especially BMB, for which final negotiations with the UK- based Hongkong and Shanghai Banking Corporation (HSBC) are underway. Meanwhile in a separate interview, Chaisith Sooksomboon, president of Bangkok Bank Workers Union, said that his union, together with 10 other banking unions, have unanimously agreed to support the campaign. "We will not cooperate with foreign financial institutions which win the sales of Thai banks," Chaisith said. (Business Day 03- April-2000) BUMRUNGRAD HOSPITAL PLC: Reports on rehab plan to SET ----------------------------------------------------- Bumrungrad Hospital Plc, through Linda Lisahapanya, Managing Director, has reported to the Stock Exchange of Thailand that at the company's Board meeting No. 4/2000 dated March 31,2000, resolutions were passed to prepare a rehabilitation plan to be proposed to the company's shareholders. The company will also appoint an independent financial advisor and prepare the rehabilitation plan by May 2000, due to the company's current involvement in debt restructuring processes which will be completed in May. (Stock Exchange of Thailand 03-April-2000) GSS ARRAY TECHNOL.: Expects shareholder delisting support --------------------------------------------------------- GSS Array Technology Plc, which was recently taken over by US-based ACT Manufacturing Inc, says it is confident that its majority shareholders will vote in favour of delisting from the Stock Exchange of Thailand. James Menges, GSS president and chief operating officer, said his confidence derived from the good deal offered to the shareholders-a premium of 91% over the stock market price, based on the market price of 85 baht at the time of the announcement. He said the initial share price GSS and ACT had negotiated was only 40 baht. An extraordinary shareholders' meeting will be held on April 28. Mr Menges said there were about 850 shareholders in GSS, of which 82% are foreign and institutional partners with the remaining 18% being individuals. No GSS shareholder has more than a 10% holding. "If more than 10% of total shareholders abstain from voting, the proposal will be terminated abruptly," he said. In the event of the delisting being approved, the matter will be submitted to the SET board for approval in May. Delisting of GSS shares would be completed in early August. After that, ACT Manufacturing Inc can make a tender offer to GSS shareholders, who will receive 163 baht per share. Mr Menges said GSS had earmarked an investment plan along with ACT's support programme, recruiting over 1,000 employees within the next few years to increase production capacity and volume. The company now has 2,800 employees. It plans to reach maximum capacity utilisation at its Ayutthaya plant in the next few years. Current utilisation is 60%. Mr Menges said that of total production, about 50-60% was exported to the United States, 30% to Europe and the balance to Asia. He said GSS projected revenue to grow by as much as 20% this year due to the consolidation advantage and boost to its manufacturing base. Last year, revenue totalled US$203 million. (Bangkok Post 03-April-2000) MEDIA OF MEDIAS PLC: Units revamp debts --------------------------------------- Media of Medias Plc (Medias) and its three subsidiaries successfully restructured debts of more than Bt1 billion with last Wednesday's signing of a contract agreement with its 13 creditors. The financially ailing company also plans to seek foreign partners in a bid to help expand its businesses. A source at the Industrial Finance Corporation of Thailand (IFCT), one of the creditors, said that the debt restructuring plan involved a debt rescheduling into the next seven to eight years, relaxed repayment terms and a grace period for the first two years. In addition, the company will be allowed to pay interest at the average of local interest rates quoted by three local creditor banks -- IFCT, Siam Commercial Bank and Bangkok Bank. The source noted that the approved plan was in line with the company's revenue projections. "The debt restructuring plan will help increase the company's cashflow," he added. The source said that Medias plans to seek offshore partners to help raise its profitability and expand future businesses. The plan still lacks specifics on whether the company will form a joint venture company or simply join hands with foreign partners to produce new programming. The 13 bank creditors had already accepted the core elements of Medias' proposed debt restructuring plan on November 30 last year. The plan includes Medias' three subsidiaries: Media Studio, M Square and MMG. Medias was saddled with a mountain of bad debts after the company over-invested around the time of the country's economic downturn. (The Nation 03-April-2000) ROBINSON DEPT.STORE: Clarifies rehab petition submission -------------------------------------------------------- Whereas, the Stock Exchange of Thailand ("SET") posted suspension sign on trading of securities of Robinson Department Store Public Company Limited ("Company") for 30 days from 6 March 2000 as its shareholders' equity stated in the Company's financial statements as of 31 December 1999 is less than zero, the Company is required to inform the SET that it shall improve its operation by submission of the plan to its shareholders, shall ask for voluntary desisting or try other options which will benefit all shareholders. The Company, reports Jongkolrattana Lamwilai, Vice- president Finance line, is under negotiation of debt restructuring with the Steering Committee and plans to implement the debt restructuring plan as a guideline for submission a petition for rehabilitation of business with the Bankruptcy Court pursuant to the Bankruptcy Act. The Company shall propose it to the Company's Annual General Meeting of Shareholders No.1/2543, which is to be held on 4 April 2000, that they approve the Company's filing of a petition for rehabilitation to the Bankruptcy Court. (Stock Exchange of Thailand 03-April-2000) SIAM YAMAHA CO.: Thai banks to forgive some loan credits -------------------------------------------------------- About 20 Thai banks, including Krung Thai Bank, have agreed to forgive part of their loan credits extended to Siam Yamaha Co., a Thai joint motorcycle venture between Yamaha Motor Co. (7272) and Thailand's KPN Group. The agreement was reached between the Thai banks and Yamaha Motor. Siam Yamaha's financial standing has deteriorated since the currency crisis hit Thailand in 1997. Currently, Yamaha Motor holds 28% of Siam Yamaha, and KPN Group more than 50%. Yamaha Motor plans to spend more than 5 billion yen by the end of the year to increase its stake in Siam Yamaha to 51%. Under the auspices of Yamaha Motor, Siam Yamaha will upgrade production facilities and develop new motorcycle models. Yamaha Motor set up on Saturday a special project team to support the operations in Thailand. (The Nikkei Financial Daily 02-April-2000) THAI MILITARY BANK: Thaksin plans bid for large stake ----------------------------------------------------- Thaksin Shinawatra, the telecom tycoon, is going to acquire a sizeable stake in the Thai Military Bank, which is struggling to raise its capital to fulfil provisioning requirements. Financial sources said Thaksin, the leader of the Thai Rak Thai Party, was going to become a major local partner of TMB by contributing Bt2 billion to the bank's new capital increase. TMB's share price on Friday closed Bt0.25 higher at Bt10.50. Cash-flush Thaksin has begun a buying spree because his telecom empire is bursting with cash, while most Thai tycoons are feeling the pinch from the economic crisis. It is reported that Thanong Bidaya, TMB's president, has offered his connections to Thaksin, one being Somkid Jatusripitak. Somkid was Thanong's secretary during his brief tenure as Finance Minister in 1997. Other partners who will also invest in the new capital issue of TMB are Vanich Chaiyawan, the insurance tycoon, and National Finance Plc, the sources said. "The military also has the money to contribute its share," said one source. TMB needs to raise at least Bt28 billion to add to its previous capital increase of almost Bt10 billion, through Super Capital Augmented Preferred Shares (Caps), a hybrid of bond and equity. Financial sources said the banking restructuring programme rules, supervised by the Financial Restructuring Advisory Committee (Frac), would not bend for TMB. According to the recapitalisation plan recently approved by Frac, TMB will raise Bt40 billion in new capital, of which half will be mobilised by the bank and the other half given under the Bt300-billion government financial support programme, which is aimed at increasing tier-one capital. As it had already raised Bt9.96 billion from the issuance of hybrid securities, it had to seek an additional Bt10.04 billion on its own, through new share issues via rights offering and private placements. That will probably happen through participation of both local and foreign partners. The state will inject an additional Bt20 billion. TMB has from time to time struggled in its quest to raise new capital. Its Bt30-billion recapitalisation plan was shelved last year because of unfavourable market sentiment. Analysts said the military-controlled bank seemed to be running out of time because it needed to recapitalise before the end of the year to meet full provision requirements. (The Nation 03-April-2000) TOTAL ACCESS COMM.: Partner by June or rating threatened -------------------------------------------------------- Total Access Communication (TAC) needs to find a strategic partner by June or risk having its credit rating downgraded. TAC is negotiating with Australian telecom giant Telstra to become its strategic partner but the two sides have not agreed on a price for a 20% shareholding in the local mobile-phone operator. An industry source who asked not to be named said that Standard & Poors had assigned a 'BB' rating to TAC's debentures in June last year. The US-based agency had said it would consider upgrading the rating once TAC found a partner. However, TAC executives, in particular Boonchai Bencharongkul, the chairman of United Communication Industry Plc, TAC's parent company, were insisting on US$5 per share, while Telstra was willing to pay only $2.50. The source said that TAC's previous negotiations with Telenor of Norway had failed when Mr Boonchai held out for $5 a share. TAC's shares are currently trading at around US$3.20 on the Singapore Stock Exchange. As well, the sale of TAC shares to Telstra has been complicated by Mr Boonchai's efforts to persuade Telstra to buy shares in Ucom at the same time. Telstra does not want to take on Ucom's heavy debts. In contrast, TAC owns a cellular network with 1.1 million subscribers and healthy cashflow. The source said that Mr Boonchai had proposed to sell a 20% stake in TAC, or about 80 million shares. Part of the proceeds would clear a short-term loan of US$80 million due this year. The source said that the risk of downgrading might prompt TAC to compromise for a quick agreement. (Bangkok Post 03-April-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, James Philip P. Jover 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. 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