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/raid1/www/Hosts/bankrupt/TCRAP_Public/000518.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 Thursday, May 18, 2000, Vol. 3, No. 97 Headlines * A U S T R A L I A * BELL GROUP: Banks get green light to chase litigation fund FIVE ARROWS AUSTRALIA FUND: Sh'holders agree to winding up PASMINCO: Class action case to Supreme Court REINSURANCE AUSTRALIA CORP.: Facing shareholder scrutiny SAUSAGE SOFTWARE: Solution 6 merger dead TELSTRA: To delay bond sale due to no interest TELSTRA CORP.: Firms plans for $7.4bn debt call * C H I N A & H O N G K O N G * HONG KONG.COM: Posts wider 1st quarter loss TAIWAN DEVEL.& TRUST CORP.: Gets loan payment extension TOM.COM: Posts huge 1st quarter loss TYSAN HOLDINGS: Judge rejects appeal VIVID TRIUMPH LTD: Facing winding up petition WING LEE RESTAURANT LTD: Facing winding up petition * I N D O N E S I A * BANK DAGANG NASIONAL: Closed banks' property up for auction BANK LAUTAN BERLIAN: Closed banks' property up for auction BANK SUBENTRA: Closed banks' property up for auction PT DOK & PERKAPALAN: Creditor banks file bankruptcy on it PT INTIFIKASA SECURINDO: JSX temporarily suspends PT SEKURITAS NAMALATU RONESINA: JSX temporarily suspends * J A P A N * DAIHATSU DIESEL MFG.CO.: Suffers second straight group loss DDI CORP.: Iridium failure blamed for 10.5B Yen net loss ITOCHU CORP.: To cut 150 affiliates KOFUKU BANK: WL Ross favored to take over WACOAL CORP.: Reports 8.5B Yen in unfunded pensions * K O R E A * DAEWOO MOTORS: Price to be key in final bidder selection SEOUL BANK: Deutsch Bank insider finalist to head * M A L A Y S I A * EDARAN OTOMOBIL NASIONAL: Proton-Hicom sale talks still on MCSB SYSTEMS (M)BHD: To reduce debts, expand operations TIME dotCOM: Khazanah eyes 30 percent stake * P H I L I P P I N E S * BELLE CORP.: Mulls sale of Manila Bay lot URBAN BANK: PDIC gets 5 formal offers for it VICTORIAS MILLING CORP.: Banks withdraw credit lines * T H A I L A N D * AMARIN PLAZA PLC: Gives reasons for Q1 net loss to SET BANGKOK METROPOLITAN BANK: HSBC pays $7B for bank iTV: SCB will sell iTV stake to Shin Corp PRECIOUS SHIPPING: Reports on debt rehab to SET PREMIER ENTERPRISE PLC: Reports debt rehab agreement SAHAVIRIYA LIGHT GAUGE STEEL CO.: To sign debt pact SIAM CITY BANK: BOT to sweeten terms for sale TANAYONG PLC: Signs debt restructuring plan ================= A U S T R A L I A ================= BELL GROUP: Banks get green light to chase litigation fund ---------------------------------------------------------- A judge in the Western Australia Supreme Court has cleared the way for former banks to the Bell Group to proceed with a challenge to a litigation funding deal. The challenge could give a major slice of any successful litigation against the banks to creditors such as the Insurance Commission of WA, which is funding the litigation. Justice Tony Templeman has lifted a stay he imposed in January 1998 that would have seen the banks' challenge to the funding deal held off until the main litigation by the Bell Group liquidators against the banks was heard in the Federal Court. The core action was in the WA Supreme Court yesterday for the first time since a Federal Court judge ordered on April 7 that the case was a matter best argued before a State court because of legal uncertainty about Federal jurisdiction. At stake in the core battle is up to $1 billion arising from allegations by the liquidators that the banks gained security over Bell Group assets in January 1990 when most Bell companies were insolvent or of doubtful solvency. The banks appointed receivers to the Bell companies 15 months later and realised $286 million by selling WA Newspapers and shares in Bell Resources, leaving no assets for creditors owed more than $2 billion. The liquidators claim the banks participated in breaches of fiduciary duty by Bell directors and then received the benefits that flowed from those breaches. Banks lawyer Mr Tom Jucovic QC said it could take six months for the cases to get to trial. Management of both cases has been give to Justice Owen, who adjourned them to June 20. (Sydney Morning Herald 17-May-2000) FIVE ARROWS AUSTRALIA FUND: Sh'holders agree to winding up ---------------------------------------------------------- Shareholders have agreed to the voluntarily winding up of the ASX-listed investment company The Five Arrows Australia Fund Limited (FAAFL). The special resolution to voluntarily wind-up FAAFL was passed by an overwhelming majority of shareholders on a show of hands. Had the special resolution been taken to a poll, it would also have been passed by an overwhelming majority of shareholders. In relation to this special resolution, FAAFL had received proxies representing 62,055,723 voting shares. If a poll had been necessary, over 91% of these proxy votes would have been exercised in favour of the special resolution. This is made up of 76.99% voting in favour of the special resolution and another 14.22% of undirected proxies which the meeting was advised would have been cast in favour of the resolution. (Sydney Morning Herald 16-May-2000) PASMINCO: Class action case to Supreme Court -------------------------------------------- More than 1000 people whose attempted class action against Pasminco was rejected by the Federal Court last week will take their case to the Supreme Court of Victoria. A statement of claim was lodged with the court and served on the mining giant's corporate headquarters in Melbourne on Monday. The claimants, including about 400 Port Pirie residents, are seeking unspecified damages, as well as an injunction to control emissions from Pasminco smelters at Port Pirie and Cockle Creek, in New South Wales. The group claims toxic emissions from the smelters cause lead poisoning, bowel problems, brain damage, behavioral problems and respiratory difficulties. On Friday, the Federal Court ruled it did not have jurisdiction to hear the case. Coleman and Grieg, the Sydney law firm representing the group, has abandoned the Trade Practices Act argument central to its Federal Court case. The Supreme Court case will hinge on claims of negligence and nuisance. Coleman and Grieg spokesman Paul Gambin called the Federal Court's ruling a "hiccup." A starting date for the case will be set at a directions hearing in Melbourne to be held on August 18. (The Advertiser 17-May-2000) REINSURANCE AUSTRALIA CORP.: Facing shareholder scrutiny -------------------------------------------------------- Embattled reinsurer Reinsurance Australia Corp Ltd (ReAC) faced its shareholders yesterday, unveiling an expected A$3mil 1st quarter loss and voicing hopes for an offshore investor to ride to its rescue. "We will look at any proposal that we believe adds shareholder value," ReAC chairman Peter Cadwallader told the press after the AGM in Sydney, noting that former chief executive Nick Steffey had been canvassing potential American investors prior to his departure. Steffey resigned on May 9, although Cadwallader declined to comment on his exit. Cadwallader also declined to comment on the exit of former underwriting managing director Michael Kelly in October last year. ReAC had earlier announced that it expected a A$3mil loss in the three months to March 31, 2000, taking its net tangible assets to about A$50mil. The company has also closed its business and placed remaining policies in run-off after sustaining massive losses from the global catastrophes. The reinsurer posted a A$467mil loss in calendar 1999, but investors are hoping to find value in the cash reserves once all policy liabilities are settled in a process which could take some years. Costs were under the spotlight as the company entered its runoff phase, with group staff now down to 30 from 130 worldwide. "We will be reviewing the director's fees, as we will be reviewing all areas of costs, and trimming them to the minimum level possible that allows us to operate effectively," Cadwallader said. According to Cadwallader, commutation--where clients and the reinsurer settle all present and future claims in one go--is being pursued to finalise liabilities on its books. But, he said, it was impossible to give a timeframe for completing the process. "We have not settled any claims for anything in excess of what we had in reserves for those claims, and we are pushing ahead, but the negotiation environment sets the pace," Cadwallader said. (Reuters, Star Online 16-May- 2000) SAUSAGE SOFTWARE: Solution 6 merger dead ---------------------------------------- The hoped for merger between two troubled software firms, Solution 6 and Sausage Software, is officially dead. Solution 6 has withdrawn its offer of six shares for every 10 Sausage shares, a deal that would have seen Telstra invest cash and assets, while taking 40 per cent of the merged entity. The agreement has looked shaky since last month's correction in high-tech stock values, later Sausage's board rejected the offer as inadequate. The deal's collapse caps a tumultuous period for Solution 6, which has lost both its chairman-elect Ted Pretty and its chief executive Chris Tyler in the past week. (Sydney Morning Herald 17-May-2000) TELSTRA: To delay bond sale due to no interest ---------------------------------------------- Telstra, Australia's biggest phone company, said yesterday it will delay the sale of up to US$1.5 billion (S$2.55 billion) of bonds to fund its investment in Hongkong's Pacific Century CyberWorks, due to a lack of investor demand. Telstra, 51 per cent owned by the government, said it will delay the sale until about September because recent debt sales by telecommunications companies in Europe have sapped appetite for its debt. Still, the company said it will proceed with a separate one billion euro (S$1.56 billion) bond sale to repay short-term debt. "Borrowing conditions are tough," Telstra treasurer Cliff Davis said. He added the decision was unrelated to a drop in Internet-related companies' stock prices. CyberWorks lost about 40 per cent of its market value in the past three months, sparking speculation its bid for Cable & Wireless HKT (C&W HKT) will be topped by Singapore Telecom and Rupert Murdoch's News Corp. Telstra's investment in CyberWorks is dependent on CyberWorks completing the C&W HKT purchase. At the same time Telstra's long-term debt ratings were downgraded by Standard & Poor's and Moody's Investors Service. Adding to bond investors' concerns are Telstra's plans to bid for third-generation mobile phone licences to be auctioned by the Australian government as early as this year. Telstra said it will bid for the licences -- expected to sell for as much as A$2.3 billion (S$2.32 billion). In addition to the US$1.5 billion bond sale delayed yesterday, Telstra has existing plans to sell another US$1.5 billion to complete the financing of the CyberWorks investment. Telstra has A$9.9 billion worth of bonds issued globally, set to double in the next two years if it undertakes all its planned sales. Chief executive Ziggy Switkowski has signalled the firm would scale back its expansion through acquisitions and alliances when he announced restructuring plans. (Bloomberg News, Straits Times 16-May-2000) TELSTRA CORP.: Firms plans for $7.4bn debt call ----------------------------------------------- Telstra Corp has cemented plans to raise up to $7.4 billion in fresh debt on international markets by the end of this year to fund its strategic alliance with Pacific Century CyberWorks and underpin its operational activities. Telstra Treasurer Mr Cliff Davis said the four-pronged program by what is one of Australia's biggest corporate borrowers would commence immediately in the turbulent European debt markets, followed by a domestic issue and two raisings in the United States by the year's end. Expectations of Telstra's heightened appetite for debt to fund its Asian footprint has been fuelled by its inability to raise fresh equity to dilute the Federal Government's majority 50.1 per cent stake in Australia's biggest and most profitable company. Mr Davis and Telstra's group general manager of finance Mr Paul Rizzo have just completed a roadshow of European lending institutions to gauge their support for a planned 1 billion euro ($A1.5 billion) raising. The issue will be managed by BNP Paribas and Deutsche Bank. The size of Telstra's borrowing program this year has already prompted ratings agencies Standard & Poor's and Moody's Investor Services to downgrade Telstra's standing in the global marketplace. The European issue will go towards funding Telstra's $3 billion requirement for working capital, with the $1.5 billion balance to be raised domestically later this year. Mr Davis said $3 billion would be earmarked to repay a $1.5 billion bank loan, as well as replace $700 million of maturing debt and an $800 million reduction in commercial paper. He said Telstra would then look to the US market in September to fund its $US1.5 billion ($2.5 billion) convertible note in PCCW, the pricing of which would be renegotiated in light of the change in market conditions. Finally, by the end of the year Telstra will return to the US for $US1.5 billion in funds to support its contribution into the pan-Asian mobile joint venture between Telstra and PCCW. The collapse this week of Telstra's pitch to buy a stake in Thai mobile company, Total Access Communications, leaves it without a foundation asset to contribute to the venture to match PCCW's sale of the mobile business of Hong Kong Telecom into the stand-alone business. Mr Davis said this increased Telstra's likely cash contribution into the joint venture to about $US1.5 billion. He said he was confident meetings ahead of launch of the imminent European issue with leading institutions there would see the 1 billion euro issue fully subscribed. He said expected increased demand for funds following the sale of third generation mobile spectrum in the United Kingdom had spooked investors, as had investors' downgrading of the wider sector. Telstra shares ended steady at $6.79, while T2 instalment receipts were off 4› to $3.76. (Australian Financial Review 17-May-2000) ============================== C H I N A & H O N G K O N G ============================== HONG KONG.COM: Posts wider 1st quarter loss ------------------------------------------ Despite a 93-fold increase in revenue, hongkong.com Corp. said its first-quarter loss widened to HK$11.3 million (US$1.5 million), from HK$2.1 million in the first three months of 1999. On a per share basis, the loss increased to 32 Hong Kong cents, from six cents. But the portal provider, which wasn't listed on the local Growth Enterprise Market until March 9, remains upbeat about the future. Chief Execurtive Officer Rudy Chan said the company has a strong position, with HK$1.20 billion cash on hand at the end of the first quarter as a result of the initial public offering, which generated net proceeds of HK$1.34 billion. This will enable it to aggressively expand the depth and number of content channels it is offering through the portal, and also to offer more so-called community services, such as email and chat sites, he said. Apart from attracting more page viewers and subscribers, this should also bring more advertisers to its portal, he said, noting that advertisers are getting more confident about online advertising and many are increasing their spending on this medium. "Advertising will be a key drive in moving hongkong.com forward and in increasing our revenue," Mr. Chan said. Total revenue from the operations amounted to HK$16.3 million in the first quarter, up from HK$173,000 a year earlier, of which 50% came from advertising, 42% from content and 8% from e-commerce businesses. (The Asian Wall Street Journal 15-May-2000) TAIWAN DEVEL.& TRUST CORP.: Gets loan payment extension ------------------------------------------------------- Panicked depositors rushed to pull money out of Taiwan Development & Trust Corp, prompting the finance ministry yesterday to broker an agreement giving the firm an extra year to repay NT$24.5 billion (HK$6.23 billion) in loans. Hundreds of Taiwan Development depositors, fearing the firm would collapse, crowded branches to take out their money. The Economic Daily News reported depositors already withdrew about NT$1.2 billion on Friday. "Taiwan Development's bank creditors have all agreed to give Taiwan Development another year to repay their loans," said Finance Minister Paul Chiu, after having summoned Taiwan Development's 35 creditor banks to discuss the extension yesterday morning. It's not known why sentiment towards Taiwan Development has deteriorated, though Mr Chiu said the finance ministry may ask investigators to probe the trust, lending and real estate firm. The firm's struggle to meet withdrawals led it to borrow NT$2 billion yesterday morning in cash from the central bank, local Eastern television reported, with the bank's Taipei headquarters handing out service tags to depositors wanting to get their money. The run on Taiwan Development, which was listed 17 months ago under a government privatisation plan, started after the Commercial Times reported on Friday the bank faced a NT$500 million shortage in operating funds that day. A day later the finance ministry ordered its Central Deposit Insurance Corp to seize control of the firm for six months to offer assurance to depositors and supervise the bank. The firm's board of directors is suspended during this period. (Bloomberg, Hong Kong Standard 16-May-2000) TOM.COM: Posts huge 1st quarter loss ------------------------------------ Tom.com, Hong Kong's hottest listing this year, lost HK$45.37 million in the first quarter, after being hit by start-up costs and heavy capital spending related to fast- paced expansion. A year earlier, the Internet unit of Hutchison Whampoa and Cheung Kong (Holdings) had a loss of HK$3.67 million. Turnover in the first quarter increased 51.9 per cent from a year earlier to HK$738,000. The loss would have been larger if interest income of HK$39.81 million had been excluded. Interest income was generated mainly from HK$50.96 billion of subscription funds locked up in its initial public offering (IPO) in February. Chairman Frank Sixt yesterday said the loss was consistent with Tom.com's business plan, which took into account substantial start-up and expansion costs. Analysts said the result did not reflect the business performance of Tom.com or other Internet-related stocks. They said prospects for these counters depended on content development. Hongkong.com, another popular local Internet play, on Sunday announced a net loss of HK$11.3 million in the first quarter on revenue of HK$16.31 million. "We can't read too much into the first quarter," said SG Securities analyst Jonathan Iu. Mr Iu said Tom.com could expect more revenue - especially advertising income - as more Web sites were launched. Tom.com chief executive Carl Chang said Tom.com would retain an original forecast to break even in 2003. The company's IPO lured more than 300,000 investors to apply for shares. The issue was oversubscribed 669 times. Tom.com's share price closed at HK$7.75 on its first day of trading on March 1, up from its HK$1.78 issue price. Last month, it slid to HK$5.80 amid a global correction in the technology sector. The counter fell 2.9 per cent yesterday to finish at HK$6.60. The company has more than 180,000 registered subscribers, up from 164,000 on March 31, and claims to have average daily page views of more than one million. "We are now moving ahead to develop 10 content-rich portals to be launched as early as June," Mr Sixt said. The portals will provide news, travel, sports, music, movies and personal-finance information. The company expects investment in these portals to reach HK$260 million. The portals will provide multimedia content with possible access through broadband and wireless application protocol (WAP) applications. Tom.com today is expected to announce a joint initiative with Orange to offer WAP content to users and a secure on-line payment plan. "We plan vibrant Web sites to tap the interests and lifestyle of Chinese communities in major cities around the world," Mr Sixt said, adding that the roll-out will start in Taiwan, Toronto and San Francisco. Mr Iu said the outlook for development would depend on what they would buy. In the first quarter, Tom.com's loss per share was 1.79 HK cents, against 0.16 cent a year earlier. Directors did not declare any interim dividend. The company has HK$900 million in cash. Meanwhile, the company announced the appointment of James Sha as a non-executive director. Mr Sha is to advise on strategies relating to international portals and overseas investments. Mr Sha had been a managing partner at Spring Creek Ventures since November last year. He had also been a senior vice-president at Netscape Communications and worked for Unix product division at Oracle. (South China Morning Post 16-May-2000) TYSAN HOLDINGS: Judge rejects appeal ------------------------------------ Tysan Holdings chief Francis Cheung Nim-chee has failed to win the right to challenge insider-dealing findings at Hong Kong's top court, and now faces being banned as a director and a penalty of more than HK$4 million. A bid to take the case to the Court of Final Appeal was foiled yesterday in the latest episode of a legal saga which has put the core decision-making process of the tribunal to task. It also means the Chee Shing inquiry is set to proceed to the penalty stage - nearly seven years after the illicit trades - unless a plea is made directly to the Court of Final Appeal for the case to be heard. Mr Cheung and Cammie Pang Kam-chi claim a blatant breach of confidentiality by a tribunal member should render the insider-dealing findings null and void. Following an inquiry in 1998 the tribunal found the pair to have traded illegally in shares of Chee Shing - now known as Tysan. However, it later emerged that tribunal member John Wu Chi- tso, an accountant, spilled the details of the probe to a friend in a bar the day before the tribunal had announced the results. Moreover, he admitted that he would not have made adverse findings against the pair and only "went along" with the other tribunal members. A few weeks later, he met the friend again. This time he elaborated on the case, saying there was no point expressing a dissenting view as the two other tribunal members had already made up their minds. Mr Wu was also an acquaintance of Mr Cheung - they were both members of the King's College Old Boy's Association - and apologised to him for the findings, assuring him the penalty would be "peanuts". He faxed a fellow tribunal member's notes to Mr Cheung to mollify him. It was asserted by barrister Denis Chang SC, on behalf of Mr Cheung yesterday: "This is an extraordinary case. These things don't happen. But if it does happen, what is the court going to do about it? It is the first case of its kind to reach the court anywhere, where you have to consider the serious misconduct of one member of a tribunal set up by statute," he said. As to Mr Wu, "his very conduct shows unfitness", Mr Chang said. However, the Court of Appeal ruled against the insider dealers. Mr Justice Arthur Leong Shiu-chung dismissed an assertion that the case was of great or general public importance to warrant a hearing at the Court of Final Appeal. It was not a dereliction of duty, the judge said, ordering the appellants to pay the insider dealing tribunal's legal costs. (South China Morning Post 17-May- 2000) VIVID TRIUMPH LTD: Facing winding up petition --------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for June 7 on the petition of Sae Mok, Jaemsai for the winding up of Vivid Triumph Limited. A notice of legal appearance must be filed on or before June 6. WING LEE RESTAURANT LTD: Facing winding up petition --------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for June 21 on the petition of Lau Siu Hang for the winding up of Wing Lee Restaurant Limited. A notice of legal appearance must be filed on or before June 20. ================= I N D O N E S I A ================= BANK DAGANG NASIONAL: Closed banks' property up for auction BANK LAUTAN BERLIAN: Closed banks' property up for auction BANK SUBENTRA: Closed banks' property up for auction ----------------------------------------------------------- The Indonesian Bank Restructuring Agency (IBRA) will auction this month about 25 properties formerly owned by liquidated banks. The properties, worth about Rp 15 billion (about US$1.8 million), include shop-houses, warehouses and residences located in Jakarta and Bekasi, West Java. They will be auctioned by PT Balai Lelang Indonesia (Balindo). Balindo managing director G. Gunawan said the auction, which will be open to the public, would be held at the Mulia Senayan hotel on May 31. He said prospective buyers would be given from May 25 to May 30 to check the properties on offer with the assistance of auction officials. "We will announce the price limits for these properties during the open house on May 25," Gunawan said, adding that Century 21 Indonesia property brokerage company would cooperate in the auction. The properties include an office building formerly owned by Bank Dagang Nasional Indonesia (BDNI) in Palmerah, West Jakarta, a shop-house which formerly belonged to Bank Lautan Berlian at Pondok Gede, East Jakarta, and a residence once owned by Bank Subentra in Tebet, South Jakarta. The banks were part of more than 40 banks closed by the government in 1998 after a massive run on the institutions. IBRA then took over the banks' assets as their shareholders could not pay their huge debts to the government. President of the Association of Real Estate Brokers in Indonesia Cynthia G. Sonneville said the properties would be good assets for investment because most of properties owned by banks were located in strategic locations. IBRA also has held several auctions of cars, paintings and furniture confiscated from the closed banks. Gunawan said that the buildings were only about 2.5 percent of about 1,000 property assets now under the control of IBRA. He added that Balindo guaranteed all the properties were backed by valid certificates of ownership. (Jakarta Post 16-May-2000) PT DOK & PERKAPALAN: Creditor banks file bankruptcy on it --------------------------------------------------------- ING Bank (London), Hong Kong Chinese Bank, and Cho Hung Leasing and Finance (Hong Kong) have filed a bankruptcy lawsuit against state-owned PT Dok & Perkapalan Kodja Bahari at the Jakarta Commercial Court, the companies said. Rahmat Bastian, the lawyer of the three creditors, said Dok & Perkapalan has failed to repay 11.2 mln usd and 9 bln rupiah in loans, which were due in 1997 and 1998. Bastian said his clients' application was the fourth attempt made against Dok & Perkapalan, after previous attempts by other creditors were rejected by the Jakarta Commercial Court. Dok & Perkapalan is 99.5 pct controlled by the Finance Ministry with the remaining 0.5 pct stake held by the Communication Ministry. Bastian said the application was filed on May 15 and the court has yet to schedule the hearing of the case. (AFP-Extel News Limited 16-May-2000) PT INTIFIKASA SECURINDO: JSX temporarily suspends PT SEKURITAS NAMALATU RONESINA: JSX temporarily suspends -------------------------------------------------------- The Jakarta Stock Exchange (JSX) temporarily suspended on Tuesday the operations of two securities companies, PT Sekuritas Namalatu Ronesina and PT Intifikasa Securindo, due to alleged market manipulation. The two securities companies allegedly engaged in artificial transactions in the trading of PT Mas Murni Indonesia's preferred shares, the JSX said in a statement. "The two securities companies are banned from trading until a further investigation is completed," it added. The trading of the above company's preferred shares has also been temporarily suspended. (The Jakarta Post 17-May- 2000) ========= J A P A N ========= DAIHATSU DIESEL MFG.CO.: Suffers second straight group loss ----------------------------------------------------------- Daihatsu Diesel Manufacturing Co. (6023) on Monday announced a group net loss of 29 million yen in the fiscal year ended March 31, marking the engine manufacturer's second consecutive loss. Sales grew 9% on the year to 41.4 billion yen. But the number of subsidiaries subject to consolidated reporting rose from five to 14, including some money-losing units. Lower ship prices drove down prices of marine diesel engines. Sales of gas turbine engines to government agencies increased, but this failed to offset the erosion in marine diesels and exports of engine parts to Southeast Asia. For the year ending March 2001, Daihatsu Diesel hopes to see a group net profit of 130 million yen on an improvement at the money-losing subsidiaries. (Nikkei 16-May-2000) DDI CORP.: Iridium failure blamed for 10.5B Yen net loss -------------------------------------------------------- DDI Corp. (9434), a major Japanese telecommunications carrier, Monday reported a group net loss of Y10.47 billion for the fiscal year ended March 31. DDI said that extraordinary losses of about Y37 billion from the write-off of its investments in the failed Iridium satellite phone venture pushed its bottom line into the red. The company made a group net profit of Y17.06 billion in the previous fiscal year. Citing heavy sales costs associated with the rollout of its cdmaOne cellphone service and expenses related to the phase-out of its analog cellphone services, DDI also reported a group pretax loss of Y5.27 billion. The company posted a pretax profit of Y50.87 billion a year earlier. The red ink for the last fiscal year will not come as any surprise to investors. On March 3, the company issued sharp downward revisions to its earnings outlook for the last fiscal year in which it forecast a group net loss of Y15 billion. On Monday, DDI reported group revenues totaled Y1.526 trillion, up 22.4% from the previous year. The addition of about Y180 billion in revenues from three new group companies accounted for most of the increase in the group's overall revenues, a spokesman said. Last year, DDI raised its equity stake in three cellphone companies in which it had previously only held a minority interest. For the current fiscal year ending March 2001, DDI forecasts net profit of Y21 billion and pretax profit of Y60 billion on group sales of Y1.915 trillion. Higher profits from DDI's Cellular group cellphone companies and an anticipated turnaround in the company's ailing personal handyphone (PHS) cellphone operations are expected bring the firm back into the black on a group basis, the company spokesman said. The spokesman noted that these forecasts are for reference purposes only. In October, DDI plans to merge with fellow Japanese telecommunications companies KDD Corp. (9431) and Ido Corp. The three companies will post combined year-end results next year, he added. (Nikkei 15-May-2000) ITOCHU CORP.: To cut 150 affiliates ----------------------------------- Itochu Corp. (8001) will calculate the value of its risk assets groupwide and, using the results, reduce the number of its affiliates from some 850 as of March 31 down to about 700 in one year, The Nihon Keizai Shimbun has learned. Japan's major trading house, which sees lax risk management as having exacerbated its fiscal 1999 losses, will employ a new method to calculate the level of risk associated with its assets, including investments in and loans for real estate and start-ups. Itochu had a total of about 5.2 trillion yen in consolidated assets as of May. Of that figure, it found an estimated 1.5 trillion yen of risk assets using the new method. It hopes to reduce risk assets by 20% to 1.2 trillion yen over the next five years. Under the new method, Itochu determines the assets held by its different departments and businesses, and multiplies them by a risk factor that reflects the content of a business as well as country risk. For example, assets held as cash will have a risk factor of zero, while real estate that will be held for about five years will have a value of 30-40%, with the figure climbing to 90-100% for investments and loans made to financially ailing firms. Itochu estimates that the risk assets of its group will generate a 3% return in fiscal 2000, and it aims to boost the figure to about 8% by fiscal 2004. The company will consider pulling out of or scaling back divisions and businesses that will have difficulty reaching that goal. For fiscal 1999, Itochu is believed to have disposed of about 450 billion yen in charges stemming from areas relating to real estate and affiliates. (Nikkei 16-May- 2000) KOFUKU BANK: WL Ross favored to take over ----------------------------------------- U.S. investment firm WL Ross & Co. is the leading candidate to take over Kofuku Bank, a second-tier regional bank in Osaka that failed in May 1999, sources close to the negotiations say. Possible candidates for the takeover have been narrowed down to WL Ross and the Daiwa Bank (8319) group. However, the bid by the U.S. firm would require that the Japanese public contribute less funds. As a result, the government- appointed administrator of Kofuku Bank is poised to recommend that WL Ross take over the failed institution. With the May 22 one-year anniversary of Kofuku Bank's collapse drawing near, the Financial Reconstruction Commission is planning to make a decision later this month, sources say. (Nikkei 17-May-2000) WACOAL CORP.: Reports 8.5B Yen in unfunded pensions --------------------------------------------------- Wacoal Corp. (3591) estimates its unfunded pension liabilities at 8.5 billion yen as of the end of March, a figure that was calculated on a 3.5% discount rate. The major women's underwear maker apparently carried some 38.6 billion yen in pension obligations at the end of fiscal 1999. Meanwhile, it had some 26.5 billion yen in employee pension funds while it set aside around 3.6 billion yen to meet the pension obligations. The difference between the reserves and the obligations is the shortfall. Wacoal will write off all the 8.5 billion yen in unfunded liabilities this fiscal year by using a method of consigning its shareholdings to a trust bank. (Nikkei 17- May-2000) ========= K O R E A ========= DAEWOO MOTORS: Price to be key in final bidder selection -------------------------------------------------------- With potential buyers of Daewoo Motor (03810:KSE) conducting their own due diligence on the troubled car maker, the issue of how much it is worth is attracting attention. "Due to public pressure, Samsung Motor (830:KSE) was sold below the price demanded by its creditors of one trillion won (US$890 million) and sold for $562 million. Only $11 million was paid in cash," a source at a Daewoo creditor said. He expressed concern that a similar situation would occur in the case of Daewoo. Daewoo creditors are hoping to get between six trillion an seven trillion won, but considering the current state of the stock market, Hyundai Motor (5380:KSE) is worth only three trillion won. The industry forecasts the bidding price will not reach that level. Thus the Daewoo restructuring committee will probably look at the highest bid in deciding the two finalists to be announced in late June. Consequently Ford is emerging as the main contender over General Motors, which vowed to make Daewoo the world's leading producer of compact cars. Ford Vice President Wayne Booker reportedly said while visiting Daewoo and its creditors that he would not repeat Ford's mistake in losing Kia Motors (270:KSE) to Hyundai by trying to save between 200 billion and 300 billion won. Hyundai succeeded in taking over Kia two years ago by offering the highest bid at the last minute. "It is very certain that foreign companies will not offer the price creditors would want so they should not neglect the Hyundai variable altogether," a Hyundai source said. Hyundai is reportedly seeking to form a consortium with Ford or DaimlerChrysler, which is also bidding for Daewoo Motors. (Asia Pulse 16-May-2000) SEOUL BANK: Deutsch Bank insider finalist to head ------------------------------------------------- Deutsche Bank is known to have recommended one Korean and one foreigner as potential candidates to run the ailing Seoul Bank. The Korean bank is reported to actually be the German bank's Chief Country Officer for Korea, Kang Chung- won, while the identity of the foreign candidate has not yet surfaced. According to one executive working in the local banking industry, Deutsche Bank has formally recommended the two candidates to the government to be posted as the next president of Seoul Bank. Kang is known to be a financial market professional whose career includes stints at Citibank and Banker's Trust. He is also reported to have been deeply involved in Deutsche Bank's government contract to act as an advisor for the normalization of Seoul Bank. (Digital Chosun 15-May-2000) =============== M A L A Y S I A =============== EDARAN OTOMOBIL NASIONAL: Proton-Hicom sale talks still on ---------------------------------------------------------- Talks between Malaysia's national car maker Proton and Hicom Holdings Bhd over the sale of car distributor Edaran Otomobil Nasional Bhd (EON) were still on, a newspaper said on Saturday. Malaysian state oil firm Petronas, which plans to buy a controlling stake in Proton, said early this month talks had stalled on the sale of Hicom's key stake in EON to Proton. But the New Straits Times newspaper quoted DRB- Hicom group chairman Mohamed Saleh Sulong on Saturday as saying that negotiations had not stopped. "It is just protracted. But the negotiations are ongoing," Mr Saleh was quoted as saying. He said the stalemate between the two parties was over the pricing of EON, which he said should be more than the RM11 per share currently offered by Proton. EON shares closed at RM14 on Friday. The sale of EON to Proton was one of the conditions imposed by Petronas as part of its purchase of a controlling stake in Proton from Hicom, which is divesting all its interests in the car project. The restructuring plan was announced in 1998, but discord over the pricing of Hicom's stake in EON, the largest distributor of Proton cars, has continually bogged down the talks. Petronas signed an agreement in March to buy Hicom's controlling 27.2 per cent stake in Proton, but no pact was reached on the EON stake. Speculation has mounted that EON, which also owns a bank, may be left out of the Petronas deal and end up losing its lucrative car distribution rights. (Reuters, Business Times 17-May-2000) MCSB SYSTEMS (M)BHD: To reduce debts, expand operations ------------------------------------------------------- MCSB Systems (M) Bhd will utilise RM38.8 million in cash from its recent and upcoming warrant conversion exercises to retire its debts, invest in its growing information technology services and consultancy business and expand its overseas operations. The proceeds will allow MCSB, which has been losing money for four years, to migrate from the hardware sector to the software, service and consultancy business, says its chief financial officer Lim Kah Poon. At a press briefing, Lim says the company is still in the process of moving its hardware distribution and supply business, which has been bringing decreasing returns to the services sector that has much higher profit margins. The full impact of MCSB's changing business model would only be known in financial year (FY) 2001, when the company expects a double-digit growth in revenue. Revenue growth for FY2000 is expected to be negligible. For the year ended June 30, 1999, the company recorded a loss of RM9.77 million on the back of a turnover of RM87.2 million. Lim did not say if the company would be back in the black by 2001. Based on the company's interim results ended Dec 31, 1999, MCSB is likely to continue being in the red this year. For the six months ending Dec 31, 1999, MCSB recorded a RM5.13 million loss on the back of a RM31.6 million turnover. The recent warrant conversion exercise, however, allows the company to settle some outstanding debts and obtain working capital. MCSB recently raised RM25.8 million from a warrant conversion exercise last month. Additionally, Lim expects a 90 per cent conversion rate for its 1999/2004 conversion exercise, bringing a cash inflow of about RM13 million. He says MCSB is confident of the high conversion rate as warrantholders stand to benefit financially as the warrants are in the money. Under the upcoming exercise, the conversion price is at RM1 and is set to expire on July 31. MCSB's shares are trading between RM3.24 and RM3.38. MCSB will use RM10.1 million of the proceeds from the recent exercise to settle outstanding redeemable bank-guaranteed bonds maturing at the end of July. As at end February 1999, the group's bank borrowings totalled RM11.39 million. The remaining proceeds, as well as the anticipated RM13 million, will go towards training and working capital as well as overseas expansion. MCSB remains keen on overseas ventures despite its previous failed foreign forays. "We have not gone to the Philippines and Thailand yet," Lim says. The company already has operations in Singapore, Indonesia and Hong Kong. MCSB's four years of losses were mainly due to its disastrous forays into the US and China. In 1994 and 1995, there was a high-risk, high-reward foray into research and development in the US and an expansion into the region generally and the huge Chinese market in particular. Unfortunately, both plans failed. (The Edge 16-May-2000) TIME dotCOM: Khazanah eyes 30 percent stake ------------------------------------------- Government investment arm Khazanah Nasional Bhd has agreed to commence negotiations with Time Engineering Bhd (Time) for a possible purchase of a 30 per cent stake in its unit Time dotCom Bhd, operator of one of Malaysia's largest fibre optic networks. The agency's entry into Time dotCom will enable its parent company to focus on repaying its borrowings which amount to more than RM5 billion through a scheme worked out with the Corporate Debt Restructuring Committee (CDRC), industry observers say. In a statement to the Kuala Lumpur Stock Exchange (KLSE) yesterday, Time said Khazanah and itself have agreed to the proposed acquisition but it will be subject to three main conditions. They are: the approval for Time dotCom's listing by the authorities, Khazanah completing due diligence and valuation on Time dotCom, and execution of a definite agreement by both parties covering the management of Time dotCom and its strategic partner that has technological expertise. Time however, did not mention Khazanah's purchase price. But assuming a RM3 price per share and Time dotCom's expected RM2.5 billion paid-up share capital, Khazanah will have to pay RM2.3 billion for the 30 percent shareholding. "The restructuring plan is on track, the creditors' meeting will be on June 8. We don't expect any deferment," Renong Bhd executive chairman Tan Sri Halim Saad told Business Times. Renong owns 46.8 per cent of Time. Ever since Time's debt revamp was unveiled on January 28, the company has been working on a fast-track basis and Halim was reported as saying that Time dotCom is expected to be listed in either July or August this year. Time dotCom's flotation is crucial to the exercise and Khazanah's participation is equally important as it takes the place of Singapore Telecommunications Ltd (SingTel) as a substantial investor in the company. Time had earlier identified SingTel as its strategic partner which will not only inject about RM2 billion into Time dotCom for debt repayment but also provide its technological know how, transforming the company into a formidable telco player. However, Time aborted talks with Singapore's largest telecoms company last week. Khazanah's move is seen by analysts and observers as signalling the importance of Time dotCom as a strategic national asset, but it is not expected to be a permanent substantial shareholder. "Ultimately the debt restructuring has to go through. If Time tries to bring in a partner now it will be a lot of hassle. Later, Khazanah can sell 25 per cent to a strategic partner and keep 5 per cent for national interest. This is better for Time because the restructuring will be back on track and it can focus on operations. After the restructuring, they can get a much cleaner deal from a partner," said a local analyst. Khazanah is a wholly-owned subsidiary of Minister of Finance Inc and was established in September 1994 to hold and manage the Government's equity investments. Its shareholdings range from Malaysia's utility giants Telekom Malaysia Bhd and Tenaga Nasional Bhd to satellite television provider Measat Broadcast Network Systems Sdn Bhd. This latest development also puts into question the counter-proposal made by Sapura Holdings Sdn Bhd late last month which was rejected by the directors of Time as the offer will give Sapura a 40 per cent controlling interest of Time dotCom. One of Sapura's major arguments for its deal is that it takes into consideration the national interest factor of Time dotCom. However, with a Government agency like Khazanah as a shareholder in Time dotCom, analysts and observers are wondering what Sapura's next step will be. Sapura had recently told the KLSE that it wants the CDRC to take a re- look at the current proposal with an emphasis on a more equitable repayment proposal. Khazanah's stake in listed companies: Telekom Malaysia Bhd 39% Tenaga Nasional Bhd 36% Commerce Asset-Holdings Bhd 15% Perusahaan Otomobil Nasional Bhd 17% Edaran Otomobil Nasional Bhd 7% HICOM Holdings Bhd 7% Malayan Banking Bhd 5% YTL Power International Bhd 3% Malaysia International Shipping Corp Bhd 2%. (Business Times 16-May-2000) ===================== P H I L I P P I N E S ===================== BELLE CORP.: Mulls sale of Manila Bay lot ----------------------------------------- Publicly listed leisure estate and gaming firm Belle Corp. is considering to sell its P2-billion Belle Bay Plaza project along Manila Bay as part of ongoing measures to clean up its balance sheets, company vice chair Willy Ocier said. In an interview with the INQUIRER, Ocier said the 19- hectare property near retail tycoon Henry Sy's Mall of Asia along Roxas Boulevard was among the assets Belle would want to unload to improve its bottomline. The Belle Bay Plaza was among the so-called "bad investments" identified by the company when it reported a record net loss of P3.29 billion last year. "Our measures for this year will be: to reduce debt, focus on core business, improve profitability and margins by reducing our cost expenses," Ocier said. He said Belle would trim down its expenditures and debt levels through fresh capital infusion and sale of assets. Based on the valuations used for the transfer of the Mall of Asia property to SM Prime Holdings, Ocier said the 19- hectare property currently has a market value of about P2 billion. It was earlier reported that Henry Sy was interested to take over majority control of Belle, which was in need of fresh capital. Sy was particularly keen on the plush Tagaytay Highlands Corp. "There's no definite timetable yet for our capital increase but we want to do it soon. Our debt is $150 million in floating rate notes and another billion in peso debt so we have more than P7 billion in debt," Ocier said. The Belle Bay Plaza was among the three bad projects blamed by the current management team to the term of Jaime Gonzales and Roberto Ongpin, who were ousted from their posts as company chair and chief executive, respectively. The two other projects were those in APC Group Inc. and Sinophil Corp. Ongpin has disputed such claims. Belle made a P1.1-billion loss provision for land development costs in the Belle Bay Plaza last year. Ongpin, who served as trade minister under the Marcos administration, masterminded the rise of Belle into a stock favorite with its entry into jai alai. But the other shareholders of the company did not like his management style. He was likewise ousted from the boards of APC and Sinophil, which operates the Subic Bay Resorts and Casinos. Ongpin made a comeback bid in the market by leading a group that took over Philweb.com, the favorite tech stock in the local scene. (The Philippine Daily Inquirer 16-May-2000) URBAN BANK: PDIC gets 5 formal offers for it -------------------------------------------- Five out of the seven "white knights" which have initially expressed their interest in troubled Urban Bank have already formalized their plans, the Philippine Deposit Insurance Corp. (PDIC) said. In a telephone interview, PDIC president Norberto C. Nazareno yesterday said as of last Friday, the deadline set for interested investors to submit their formal proposals, only five submitted their formal intention to the state deposit insurer. Mr. Nazareno said the PDIC has given the interested buyers until the first week of June to come up with their respective plans on how to go about saving the troubled bank. The PDIC chief, however, refused to identify the names of the potential buyers but sources said one of them is Cojuangco-controlled Bank of Commerce. "We have agreed on an internal timetable and we gave them until the first week of June to come back to us and give us a firmer indication of their intentions," Mr. Nazareno said. Although the law allows the PDIC up to 90 days from the day of takeover to come up with the final rehabilitation plan, the government insurer is moving faster, he said. Mr. Nazareno also said PDIC has already given the five investors the necessary documents needed in conducting a due diligence audit on Urban Bank. "We have given them most of the documents, in case they need more we will see what we can provide them," he said, adding that with the current situation, investors will not have the luxury of going through every department of the bank and instead have to depend on the documents provided by the PDIC. "But if they want to talk to the bank's people we will give them the opportunity," he said. He added some investors are already talking with Urban Bank chairman Arsenio Bartolome III. (Philippine Daily Inquirer 16-May-2000) VICTORIAS MILLING CORP.: Banks withdraw credit lines ---------------------------------------------------- The collapse of Victorias Milling Corp., which left P3.4 billion loans in local banks three years ago, has caused banks to withdraw the credit lines to the sugar industry putting the industry in dire need of new capital. In a meeting with the Economic Mobilization Group (EMG), it was noted that banks withdrew their credit lines from the industry because the industry was on the "watchlist" due to the Victorias Milling collapse. "This negative perception leads to the assumption that the collapse of an individual firm means the collapse of the industry as a whole," the EMG paper said. The meeting noted that when Victorias Milling collapsed in 1997 because of over exposure in real estate properties around P1 billion in bank lines was lost to other millers. Banks, however, said they have not stopped all credit to the industry but are using a case-by-case approach in evaluating credit applications by individual firms and are also applying very stringent requirements. The credit issue to the sugar industry came up following the concern raised by the Philippine Sugar Millers Association (PSMA) on the credit access difficulty because of the industry's negative perception following the Victorias Milling incident. Executive director Jose Ma. Zabaleta said the industry needs all the financing support it can get because of the potential of the industry. The PSMA, however, admitted that the industry is a sunset industry in terms of exports opportunities but with regard to the domestic market the industry is a sunrise industry given the 3.9 percent growth in domestic demand. Zabaleta suggested that in order to determine the opportunities in the industry a segmented approach should be used. This means borrowers are classified as millers or planters. (Manila Bulletin 17-May-2000) =============== T H A I L A N D =============== AMARIN PLAZA PLC: Gives reasons for Q1 net loss to SET ------------------------------------------------------ Amarin Plaza Public Company Limited, through Vitoon Wongkusolkit, Managing Director, has explained to the Stock Exchange of Thailand why his company suffered a loss for the first quarter of 2000. The consolidated net loss for the three months ended March 31, 2000 of our company was lower than the same period of 1999 for above 20 percent. The main reasons were the subsidiary companies incurred loss on revaluation of fixed assets Bht. 922 millions and loss on exchange rate Bht. 98.57 millions in 1999 while incurred loss on exchange rate only Bht. 0.67 millions in 2000. (Stock Exchange of Thailand 16-May-2000) BANGKOK METROPOLITAN BANK: HSBC pays $7B for bank ------------------------------------------------- HSBC Holdings has confirmed the 36.6 billion baht (about HK$7.24 billion) purchase of a controlling stake in Bangkok Metropolitan Bank. The bank said it had agreed in principle to buy a 75 per cent stake in the Bangkok Metropolitan from the government- run Financial Institutions Development Fund (FIDF). The price represents a premium of about 96 per cent per share and is subject to approval from the Minister of Finance. The 180-branch Bangkok Metropolitan, which was seized in January 1998 after a run on deposits, is to be renamed HSBC Srinakorn. After assuming control of the bank, HSBC will reorganise its capital structure to ensure an appropriate level of capital. Expected capital after the reorganisation will be about 10 billion baht. The FIDF will enter into a loss-sharing and yield- maintenance arrangement with HSBC in relation to a substantial proportion of the asset base. The two sides settled on the terms after more than a year of talks. For HSBC, which has had an office in Thailand since 1888, the purchase will allow it to extend its presence in a market where restrictions on foreign banks capped it to three offices for its Hongkong and Shanghai Banking Corp. The sale of the nationalised lender will fulfil a promise Thailand made to the International Monetary Fund when it received an international bailout in 1997 after the baht collapsed. It will also go some way to paying for the government's US$80 billion effort to rebuild the country's banking system after it was forced to take over many of Thailand's lenders. Earlier this month, a director of the central bank said the gross price would be 35 billion baht, which would immediately be reduced by 20 billion baht by the government's purchase of the majority of Bangkok Metro's non-performing loans. Instead, the Thai Government will subsidise losses on a portfolio of non-performing loans determined as part of the sale. That is similar to terms of Standard Chartered's purchase last year of 75 per cent of Nakornthon Bank from Thailand. In that agreement, the government said it would bear 85 per cent of any losses within the first five years. About three-quarters of the bank's loans are in default, according to Moody's Investors Service. The deal is the latest in a six-month acquisition spree by HSBC as it focuses on becoming a truly global bank. In December, HSBC wrapped up a US$9.85 billion buyout of Republic New York and its Luxembourg-based private banking group, Safra Republic Holdings, owned by the late financier Edmond Safra. In April HSBC moved to strengthen its presence in Europe with an 11 billion euro (about HK$78.8 billion) friendly bid for Credit Commercial de France, the seventh-largest French bank. Less than a week ago, it lost a bid to win control of Mexico's Serfin bank, its bid trumped by Banco Santander Central Hispano. (South China Morning Post 17- May-2000) iTV: SCB will sell iTV stake to Shin Corp ----------------------------------------- Siam Commercial Bank plans to divest all of its holdings in television station iTV within five years to telecom giant Shin Corporations. Under iTV's debt-restructuring plan, capital will be written down from one billion baht to 200 million baht. Siam Commercial Bank, a major shareholder and creditor of iTV, will convert its 3.7 billion baht in loans to equity, which will then be sold to Shin. The restructuring plan has been approved by the SCB board, said Aswin Kongsiri, a bank director. The total cash amount paid to iTV by Shin will be about 2.5 billion baht for a 40% stake. Another 40% in the station will be controlled by SCB and the Crown Property Bureau, with the remainder held by other shareholders. The station's total debt burden after the equity swap will fall to around 600 million baht. Within five years, the bank plans to completely sell its holdings in iTV, potentially giving Shin as much as an 80% stake in the station. "After the debt restructuring is completed, iTV shareholders will still have to approve it. The bank will propose the plan to the company directors, but we don't anticipate any problems, since it's the best solution available," Mr Aswin said. "iTV's problem rests with its cashflow and high debt. Operating performance is good, and the firm should show a profit once restructuring is completed." Another bank executive said Nation Multimedia Group, another iTV shareholder, had proposed raising its own stake to 12% after the restructuring was completed. Nation now holds a 10% stake in iTV, which will be reduced after the capital write-down and debt-for-equity swap. Suthichai Yoon, Nation Group editor-in-chief, has formally asked SCB for the right to purchase shares. Other iTV founding shareholders, such as JSL Co and the Matichon Group, have not yet signalled whether they want to maintain their 10% holdings by buying new shares. Nation Multimedia, which supplies several news programmes for iTV, had been in a sharp dispute with the bank for the past few months over the restructuring plan and overall station programming policy. Under the station's licence, news content must represent 70% of airtime. To bolster ad revenues, the station had favoured rearranging some of its programming to place more popular entertainment programmes in prime-time spots, a move strongly attacked by the Nation group. Nation Multimedia, meanwhile, has invested heavily in its own project to launch a cable news channel on UBC pay- television starting next month. Executives of the company say they want to maintain their stake in iTV to keep its options open, and further develop the group's strategy as a general content provider, selling to both cable and free TV. "If Nation leaves iTV, it doesn't seem like a smart move. And even with Shin coming in to takeover the station, Mr Suthichai will continue to hold a lot of influence in news policy," said one executive. Mr Suthichai could take a formal management position at iTV once the recapitalisation is completed, which would be followed with a general management shake-up at iTV, sources said. (Bangkok Post 17-May-2000) PRECIOUS SHIPPING: Reports on debt rehab to SET ----------------------------------------------- Precious Shipping Public Company Limited and subsidiaries had outstanding debts as set forth below as of March 31, 2000: Exchange (In Thousand)/Rate in Foreign currency/in Baht: Long-term Loans (Baht) 490,128 Long-term Loans (US$) 37.9628 63,064 2,394,087 Long-term Loans(Indian Rupees) 0.9359 18,125 16,963 Euro-convertible Bonds (US$) 37.9628 30,776 1,168,343 Unsecured Bonds (Baht)-Net - - 1,480,280 Loan from Bank (US$) 37.9628 31,250 1,186,338 Grand Total (Baht) - - 1,970,408 Grand Total (US$) 37.9628 125,090 4,748,768 Grand Total (Indian Rupees) 0.9359 18,125 16,963 Debts due in (In Thousand) Due upon demand (**) Apr.-Dec.2000 2001, 2002 onward: Long-term Loans (Baht) 334,301 96,727 59,100 - Long-term Loans (US$) 46,023 11,230 4,113 1,698 Long-term Loans(Indian Rupees) - 10,625 7,500 - Euro-convertible Bonds (US$) - 30,776 - - Unsecured Bonds (Baht)-Net - 1,480,280 - - Loan from Bank (US$) - 31,250 - - Grand Total (Baht) 334,301 1,577,007 59,100 - Grand Total (US$) 46,023 73,256 4,113 1,698 Grand Total (Indian Rupees) - 10,625 7,500 - Exchange (In Thousand)/Rate in foreign currency/in Baht Long-term Loans (US$) 37.9628 4,967 188,549 Euro-convertible Bonds (US$) 37.9628 30,776 1,168,343 Unsecured Bonds (Baht) - - 2,500,000 Loan from Bank (US$) 37.9628 31,250 1,186,337 Grand Total (Baht) - - 2,500,000 Grand Total (US$) 37.9628 66,993 2,543,229 Debts due in (In Thousand) Due upon demand (**) Apr.-Dec.2000 2001 2002 onward: Long-term Loans (US$) 4,037 644 286 - Euro-convertible Bonds (US$) - 30,776 - - Unsecured Bonds (Baht) - 2,500,000 - - Loan from Bank (US$) - 31,250 - - Grand Total (Baht) - 2,500,000 - - Grand Total (US$) 4,037 62,670 286 - ** The Company and certain subsidiaries are negotiating with its financial institutions for financial restructuring. Loans are rescheduling and reworking of the payment schedule with each Secured Lender. According to the above new repayment schedule, of the loans outstanding as at March 31, 2000, loan from a branch of foreign bank of approximately Baht 89.5 million, will be repaid by the end of 2001 and the rest will be repaid in quarterly installments commencing March 31, 2000 till the end of 2004. As at March 31, 2000, the Company and certain subsidiaries paid the first installment to all secured lenders totalling approximately Baht 202.63 million in accordance with the new repayment schedule. The Company and certain subsidiaries presented the amount of Baht 685.02 million as a part of current portion of long-term loans due within one year in the balance sheet in accordance with the new repayment schedule. Since the new agreement terms have not been signed till the report date and the Company and its subsidiaries are in the process of reviewing the legal documents to amend the existing loan documents. Therefore, the Company and certain subsidiaries presented long-term loans (net of current portion) totalling approximately Baht 2,081.44 million, as a current liability Loans due upon demand for the March 31, 2000 interim financial statements. (Stock Exchange of Thailand 16-May-2000) PREMIER ENTERPRISE PLC: Reports debt rehab agreement ---------------------------------------------------- With reference to the debt restructuring process of Premier Enterprise Public Company Limited under the supervision of the Corporate Debt Restructuring Advisory Committee (CDRAC), the company, through Mr. Vichien Phongsathorn, Managing Director, is happy to inform you that Debt Restructuring Agreement has been achieved. Up to this date, 86 percent of the creditors have signed the agreement. It is agreed as part of the agreement that the company would submit rehabilitation petition to the Bankruptcy Court under Article 3/1 of the Bankruptcy Act. The company submitted the petition on 12 May 2000 which incorporated the same plan as the signed Debt Restructuring Agreement under CDRAC. The plan includes debt to equity conversion, interest rates reduction and reschedulings of the remaining debts to a sustainable level to ensure future growth. As a result of this debt restructuring and the continual improvement of the economy, Premier Enterprise Plc. will be rehabilitated in beneficial manners to all constituents i.e. shareholders, creditors, employees and Thai economy as a whole. In terms of implementations, financial creditors have agreed to nominate Premier Planner Company Limited as the Planner and subsequently Plan Administrator. Premier Planner, represented by current management, will manage businesses of Premier Enterprise Plc. and ensure continuity. All transactions including payments of trade payables, receipts of trade and other receivables will be conducted as normal. There will be no effect to trading partners and joint venture partners in anyway. The company's restructuring will not effect subsidiaries and affiliates. Most subsidiaries have completed restructuring and do not require to go through Court's rehabilitation procedure. Only one exception, Premier Products Company Limited submitted a petition to the Court in March 2000. We, therefore, request for your acknowledgement and for the SET to disclose information to the general public as you deem appropriate. The company is fully confident that successful restructuring will strengthen its financial position and ensure business stability in the future. (Stock Exchange of Thailand 16-May-2000) SAHAVIRIYA LIGHT GAUGE STEEL CO.: To sign debt pact --------------------------------------------------- Sahaviriya Light Gauge Steel Co, a subsidiary of Sahaviriya Steel Industries Plc, will sign a debt-restructuring agreement with its creditors tomorrow, covering 630.5 million baht in debts. The four creditors signing the agreement will be Krung Thai Bank, Bangkok Metropolitan Bank, BankThai, and Book Club Finance. Win Viriyaprapaikit, a director and senior executive of Sahaviriya, said the restructuring plan was approved by creditors representing 99.1% of all outstanding debts. The plan calls for quarterly debt repayments to be made over 10 years. (Bangkok Post 17-May-2000) SIAM CITY BANK: BOT to sweeten terms for sale --------------------------------------------- Mr Chatu Mongol Sonakul, the governor of the Bank of Thailand, said yesterday the central bank is revising the conditions of sale for its auction of Siam City Bank, after realising that the old conditions were not attractive enough to potential investors. The central bank is hoping for better offers for Siam City Bank, now that most of its problems have been resolved. However, if the enhanced conditions still prove unsatisfactory, other approaches will have to be considered. But this will have to wait until Bangkok Metropolitan Bank is sold. "We're now welcoming final offers from bidders. As Siam City Bank is the only [intervened] bank left, things are starting to get easier," said the governor. As reported earlier, three bidders, namely Newbridge Capital, the US subsidiary fund of Nova Scotia and GE Capital, were interested in Siam City Bank. In April, the Financial Institutions Development Fund agreed to sell Bangkok Metropolitan Bank to Hongkong and Shanghai Bank for more than Bt35 billion. "The Bank of Thailand expects the strategic partner will officially announce the sale before the Thai government does, because all the documents have already been sent to the strategic partner for the closing [of the acquisition]," said Chatu Mongol. He also questioned having central bank officials sit on the board of Siam City Bank, saying they have backgrounds in regulatory matters, not business administration. However, the central bank governor had said earlier that if final offers were still not satisfactory, some Thai executives would be asked to join Siam City Bank's management. (The Nation 16-May-2000) TANAYONG PLC: Signs debt restructuring plan ------------------------------------------- Tanayong Plc, a listed property developer yesterday signed a Bt5.19billion debt-restructuring plan with creditors and said it is preparing to negotiate with unnamed United States and Chinese firms to jointly invest in new real estate projects. Tanayong is also the major shareholder of Bangkok Transit System Plc, the operator of the Skytrain system. Company officials declined to provide more details of the potential joint ventures with foreign partners, but said talks are underway with two to three firms. The Skytrain system, which opened late last year, provides real estate opportunities. Tanayong's subsidiary won the right to expand its system's two lines, one to reach Thonburi on the other side of the Chao Phya river, in order to increase the daily number of passengers. Plans for new property projects will be finalised by the end of the year, said a company official, who asked not to be named. Tanayong started negotiations with creditors last year and signed the first agreement yesterday, with another one to follow within a month to restructure a Bt600million debt with Siam Commercial Bank. The first agreement calls for 22 per cent of the principal and unpaid interest, totaling Bt1.1 billion, to be written off. Another Bt2.76 billion in debt was settled by asset transfers. The rest, or Bt1.38 billion, will be paid back over three to seven years at the minimum lending rate. Tanayong's financial picture should be healthier in the second quarter following the debt revamp. Tanayong also expects to dispose of all unsold units at its huge Thana City residential project by year-end. Meanwhile, Karun Chandrangsu, director of the Skytrain operator, said the company expects to sell new stock by the end of this year. The company will introduce new marketing campaigns to boost the number of passengers riding the Skytrain, as it is bleeding red ink carrying only 150,000 a day. (The Nation 17-May-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. 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