/raid1/www/Hosts/bankrupt/TCRAP_Public/000606.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, June 6, 2000, Vol. 3, No. 109

                                     Headlines


* A U S T R A L I A *

AMP GROUP: Ralph reforms could wipe $1B off appraisal value
EISA LTD: Calls halt to trading
HIH INSURANCE: In financial struggle, shares falling
MITSUBISHI AUSTRALIA: No plant closure,but lower production
SUPER PROGRESS: 5 bidders for idle buidling site


* C H I N A  &  H O N G  K O N G *

CENTRALIX LIMITED: Facing winding up petition
DALIAN CORP.: 6 Japanese banks to grant 40% debt relief
GADERY DEVELOPMENT LTD: Facing winding up petition
GOLDPORT TECHNOLOGY LTD: Facing winding up petition
HONG KONG AUCTIONERS & ESTATE: Facing winding up petition
iMERCHANTS: Annual loss reaches HK$9.27M
LEADINGAIN INT'L LTD: Facing winding up petition
MEILAI INVESTMENT CO.LTD.: Facing winding up petition
RIGHT CAPITAL CO.LTD.: Facing winding up petition
U-TENDERS FURN.& WOODENWARE: Facing winding up petition
WORLD BUSINESS CENTRE (HLDGS.): Facing winding up petition


* I N D O N E S I A *

BANK DANAMON: To be recapitalised mid June
BANK OF CENTRAL ASIA: Market debut falls short


* J A P A N *

DAIHYAKU MUTUAL LIFE INS.CO.: FSA appoints administrators
DAIHYAKU MUTUAL LIFE: Moody's downgrades strength rating
DAIHYAKU MUTUAL LIFE: Joyo, Ashikaga loans uncollectible
DAI-ICHI HOTEL LTD: Hyakujushi Bank may not recover loans
HIKARI TSUSHIN: Fears 1 billion Yen unrecoverable
KYOEI INSURANCE CO.: Prudential Ins. to buy stake
MATSUO BRIDGE CO.: Second straight group net loss
NIPPON CREDIT BANK: Negative worth swells to 3.24T Yen
NIPPON CREDIT BANK: Cerberus re-enters purchase race  
NISSAN DIESEL MOTOR CO.: Avoids negative group net worth
NISSAN DIESEL MOTOR CO.: Plans rehab completion by FY2004


* K O R E A *

DAEWOO MOTOR: FTC set to block Hyundai's bid  
HYUNDAI GROUP: Regains normalcy,but sibling dispute lingers
HYUNDAI MOTOR: Chairman defies order to quit post
KIA MOTORS: Korea,Brazil reach conditional pact on fines


* M A L A Y S I A *

GRAND BRILLIANCE: Allowed to extend FRNs
GRANITE INDUSTRIES BHD: Incurred pre-tax loss for Q1
LIEN HOE CORP BHD: SC conditionally approves restructure


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

FIRST WOMEN's CREDIT CORP.: SEC to decide mgmt issue
JG SUMMIT: Not concerned with dollar debts
PHILIPPINE APPLIANCE CORP.: Makes asset-for-debt swap
PHILIPPINE APPLIANCE CORP.: GE not likely to bail out
PHILIPPINE NAT.BANK: Audit shows capital PhP2B understated
WESTMONT INVESTMENT CORP.: SEC rejects lifting cease order


* T H A I L A N D *

SIAM CITY BANK: Newbridge leads bidding
SUBMICRON TECHNOLOGY: Creditors to vote on bankruptcy


=================
A U S T R A L I A
=================

AMP GROUP: Ralph reforms could wipe $1B off appraisal value
-----------------------------------------------------------
The country's largest life insurer, AMP, could have $1
billion wiped off its appraisal value through the loss of
imputation credits when the Ralph tax changes come into
effect on July 1.

AMP has said it is not concerned about the impact of Ralph
and is steadily moving away from life insurance and
concentrating on funds management products.  Insurance
analysts are yet to factor the full impact of the Ralph tax
changes into their valuations of life companies and are
instead adopting a wait-and-see approach ahead of the new
regime on July 1.

The Ralph business tax reforms are expected to increase the
tax burden on life insurance companies by around $250 to
$300 million per year.  The reforms will have an impact on
the tax treatment of underwriting profits, profits on
immediate and annuity business, and management fees.

But, one of the most significant changes means that life
companies will lose imputation credits, which are passed to
shareholders through franked dividends. Life insurers
generate imputation credits equal to 20 per cent of the tax
payable on policyholders' funds, including tax on
superannuation contributions.

So, the company's shareholders receive imputation credits
for tax paid by its policyholders.  The Ralph reforms will
close this loophole by requiring life companies to maintain
separate franking accounts: one for shareholders and one
for policyholders.  The result is that life insurance
shareholders will stop receiving valuable imputation
credits.

AMP has tentatively stated that this could add up to a loss
of up to $50 million each year off its value of new
business.  The loss of imputation credits affects a
company's appraisal value, which is a more accurate measure
of a life company's value than its market capitalisation.
Appraisal value takes into account the future earnings that
life companies should make from policies currently on their
books.

Because the task of valuing life companies is complex - to
the point that many insurance analysts struggle with the
concept - the market cap of a life office rarely reflects
its "true" value, being the value an acquirer would be
prepared to pay for it.  For AMP, a $30 million annual loss
in imputation credits would equate, on a capitalisation
multiple of 20 times, to a $600 million cut in its
appraisal value.

And at AMP's worst-case estimate of a $50 million loss, it
would mean a $1 billion drop in the company's appraisal
value.  That said, a multiple of 20 is at the upper end of
capitalisation rates, with many analysts opting for a rate
closer to 15.  Most insurance analysts are yet to confirm
what effect the Ralph reforms will have on the valuations
of life companies, instead waiting for announcements from
the insurers themselves.

AMP has said that it expects to dampen the impact of the
Ralph reforms by repricing and moving out of life insurance
and into funds management.  Axa, which holds a 6 per cent
of the Australian life market, has estimated that the
reforms would diminish its share price by 6 cents if the
stock were valued at $2.68 - a loss to the company of more
than $39 million. (Australian Financial Review  05-Jun-
2000)

EISA LTD: Calls halt to trading
-------------------------------
Besieged Internet hopeful Eisa Ltd ran for cover yesterday
after watching its share price plummet by more than 68 per
cent this week.

The company called a trading halt before the market opened
yesterday, preventing any further collapse in the stock.
Eisa said that chief executive Mr Damien Brady was held up
in a meeting and unable to comment on the demise of his
company.  But speculation now mounts that eisa could become
a takeover target and the prized internet service provider
OzEmail, which Eisa was set to purchase, had a number of
suitors lining up to buy, including Cable and Wireless
Optus Ltd and AAPT Ltd.

"There's probably going to be a takeover of Eisa," one
analyst aid.  "It has 80,000 customers. There's always a
price."

A tumbling share price has seen the company's market value
crumble to just $14.7 million compared to $142.2 million
when the ambitious OzEmail deal was unveiled.  Eisa's
financial woes were heightened on Thursday when OzEmail
announced that it would retain a $20 million deposit, after
the termination of the deal was unveiled.

Eisa has about $1 million cash on its books.  Some market
watchers have suggested Eisa could be bought by AAPT Ltd or
troubled Vodafone. (The Border Mail Online  05-Jun-2000)

HIH INSURANCE: In financial struggle, shares falling
----------------------------------------------------
HIH Insurance is struggling. Concerns over capital and
provisioning levels, weak investment markets and harsh
criticism from some investors and media outlets about its
performance have triggered a big fall in the company's
share price.

Shares closed on Friday at $1.13, well below the April 1998
peak of $3.32. Chief executive officer Mr Ray Williams, who
has been in the business for 32 years, says the most
disappointing aspect of HIH is its share price. He believes
the shares are worth "$2 plus".

The share price has been depressed for several reasons.
There's been plenty of discussion over HIH's exposure to
the Duke case, relating to professional indemnity
insurance. Mr Williams says the exposure is capped at $1
million.  He rejects claims that Liberty Mutual of the US
and Suncorp-Metway made bids for the company during the
past two years. Fund managers do not believe Suncorp ever
held discussions with HIH.

Liberty did express some interest when former part-owner
Winterthur sold out its interest two years ago. But there
was never any due diligence or bid.  Mr Williams wants to
get the focus back on to the business of running an
insurance company, and away from litigation and takeover
speculation.

"The performance during the current six months should have
a positive impact on the market," he said. His thesis is
based on the underwriting performance of HIH.

He says the rate cycle in Australia has turned and that
will hold the company in good stead. The group has made
acquisitions during a weak pricing period, and now Mr
Williams will focus on organic growth.  The $300 million
purchase of FAI last year was HIH's largest, and most
controversial, acquisition.

Critics say HIH did not do enough due diligence on the
operation. Essentially, the business was severely
underprovisioned when purchased by HIH.

"We knew we would need to increase provisioning but we had
to go beyond our estimates and that was disappointing. If
we had known ... we would have priced it differently," Mr
Williams says with a hint of regret.

But he adds that the positives it brings - product, a well-
known brand name and all important internet distribution
capability - are worth it.

"Thirty per cent of our business is transacted under the
FAI brand name and the direct business is growing. The
acquisition means 67 per cent of our business is now in
Australia, which gives us business in the area where rates
are firm."

HIH is criticised for its provisioning procedures. It
operates on a relatively low confidence interval compared
with its competitors.  Mr Williams says that after 30 years
in the business, the company understands provisioning and
the actuarial basis of running an insurance company. HIH
also makes liberal use of reinsurance facilities.

He believes HIH's track record and experience means it can
operate on relatively low intervals because much of the
business is short-tail (term). That's the major difference
between HIH and some of Australia's failed insurers which
entered the reinsurance business, he says.

"We don't have the same volatility in our business. Less
than 5 per cent of our business is reinsurance. We have
always stated that we do not want excess capital ...
because it is a waste," he says.

But the business premise could come unstuck if Australian
Prudential Regulation Authority proposals demanding that
companies have relatively high confidence intervals are
introduced.

"They are only up for discussion. They wouldn't come in
until 2002 and they are talking about a five-year
transition period," Mr Williams says.

A common refrain from HIH (and many other companies) is
that the sharemarket does not properly understand the
business.  Mr Williams says that's part of the reason for
the weak share price. "We are primarily an underwriter and
that's the difference between us and ReAC, New Cap and even
QBE. Now we've made the FAI acquisition, and our non-core
assets have been disposed of. We came in with good results
for the first half and I think the market is now waiting
for the next six months."

For the half-year to the end of December 1999, HIH reported
a net profit of $40.2 million, compared with a $58.8
million loss the previous six months. Its combined ratio,
which is the ratio of claims and expenses to net earned
premiums, was down slightly to 105.8 per cent. Around 58
per cent of its business is corporate insurance, and the
rest is personal insurance. Apart from Australia, HIH
operates in the US, UK, New Zealand and Asia.

The Californian workers' compensation business should
contribute to the bottom line during the current six months
after a tough period, Mr Williams says.  HIH's Argentinian
business is profitable. "We would like to expand that
business. We are not talking about expensive acquisitions,
but we would like to pick up some smaller portfolios."

Earnings from the UK business will also pick up in line
with an improvement in the rate cycle.  Mr Williams hopes
that, by the end of the year, global investors will be
better disposed towards HIH. At the moment, it's difficult
to stop the international momentum against insurers, he
says.

"You have a global [negative] feeling in the market place
about insurance companies. We have gone through a very soft
rate cycle and that's been compounded by a whole range of
catastophes," he said.

But he believes the share price will turn the corner and
that the current six months are crucial to market
perception.  He is correct, and investors will quickly let
him know if he goes off the track.  (Australian Financial
Review  05-Jun-2000)

MITSUBISHI AUSTRALIA: No plant closure,but lower production
-----------------------------------------------------------
Mitsubishi Motors may lower production at its plant in
Adelaide, Australia, but reaffirmed a long-term commitment
to building cars in the country.

The Japanese car-maker, which is coming under
DaimlerChrysler's control, was confident that a new
management team being installed at Mitsubishi Motors
Australia would turn round operations.

"The Australian market over the long term continues to
enjoy steady growth," Mitsubishi president Katsuhiko
Kawasoe said.  "One of the challenges is whether or not our
production capacity is really in line with the size of the
market."

"Perhaps the production capacity we have is somewhat
excessive in comparison with the size of the market," he
said, adding that Mitsubishi had been over-optimistic in
the past about sales targets.  "That makes it somewhat
difficult to reach the break-even point. But in any event,
I expect that as the size of the market continues to
increase in Australia, our operation will indeed be
profitable."

Doubts over the future of the Adelaide plant, a mainstay of
the South Australia economy employing almost 4,000 workers,
have featured in the Australian press over the past year.
Reports in Japan in November said Mitsubishi Motors might
stop assembling cars in Australia as lower import tariff
rates had made it cheaper to export them from Japan.

Mitsubishi's Australian sales, comprising Magna cars built
in Adelaide and other cars including the Pajero four-wheel-
drive model imported from Japan, stood at about 70,000 last
year, down sharply from 84,200 in 1998.  Production at
Adelaide was slashed to 34,900 Magnas last year from 47,300
the year before.  He said the plant was safe after last
month's appointment of the new management team. (South
China Morning Post  05-Jun-2000)

SUPER PROGRESS: 5 bidders for idle buidling site
------------------------------------------------
Five potential buyers, including the Southern Cross Hotels
group and listed developer Metroland, are understood to be
circling one of the last black holes in Sydney's CBD.

The interest is good news for the 339 Sussex Street site,
which was first listed for sale about three years ago by
the owner, Indonesian-based Super Progress. There have been
two separate development applications.

Several industry sources said the site's $24 million price
tag had proved a sticking point, with many valuing the land
at closer to $18 million. However, selling agent Mr John
Stinson of Colliers Jardine said he had received several
offers of around $24 million since the last round of
expressions of interest were called for in mid-April. Final
tenders close tomorrow.

Super Progress bought the site in 1985 for $2.2 million. It
previously housed the Crane building, which has since been
bulldozed.  Interest is understood to have broadened over
the past few weeks to include commercial operators, and at
least one major builder is believed to have tendered an
application.

Meriton was also rumoured to have put in a bid for the
site, but this was denied by a company spokesperson.
Southern Cross Hotels and Metroland could not be contacted
for comment. The 1,943 square metre site carries a
development application for 155 units, to be split between
one tower of 87 residential units and another of 68
serviced apartments.

There are also plans for a 149-space below-ground car park
and a 1,597 sq m retail centre which would be divided into
nine "units" and a supermarket.  Development costs are
estimated at close to $90 million. Super Progress is
committed to buying back the serviced apartment complex,
along with 56 car spaces, two offices and the Jones Street
ground floor frontage. (Australian Financial Review  05-
Jun-2000)


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

CENTRALIX LIMITED: Facing winding up petition
---------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 28 on the petition of The
Hongkong and Shanghai Banking Corporation Limited for the
winding up of Centralix Limited. A notice of legal
appearance must be filed on or before June 27.

DALIAN CORP.: 6 Japanese banks to grant 40% debt relief
-------------------------------------------------------
Six major Japanese banks, including Fuji Bank and
Industrial Bank of Japan, are set to relinquish a total
of 4 billion yen, or 40 pct, of their loan exposure to a
troubled nonbank in Dalian, China, informed sources said
Thursday.

This would be the first debt relief by Japanese banks for a
Chinese nonbank lender.  Fuji, IBJ, Sumitomo Bank, Dai-Ichi
Kangyo Bank, Sanwa Bank and Sakura Bank plan to grant the
loan forgiveness to Dalian International Trust and
Investment Corp. in the form of sale of their claims to
Chinese companies for 60 pct of their original value, they
said.

DITIC, which is under the control of the municipal
government of Dalian and other Chinese nonbank lenders have
been trapped in dire financial conditions.  The six banks
had asked DITIC and the Dalian government to repay the
loans in full, whereas DITIC proposed that the banks give
up 40 percent of their outstanding claims.  But the
Japanese banks now consider acceptance of the debt waiver
unavoidable, given that DITIC may be declared bankrupt, the
sources said.

The repayment ratio would be cut sharply to 20 percent if
the firm goes bankrupt, the sources said. The banks have no
other alternative but to follow U.S. and European banks
that have already shown their readiness to accept the 40
pct debt waiver request, the sources said.  (Jiji Press
English News Service  01-Jun-2000)

GADERY DEVELOPMENT LTD: Facing winding up petition
--------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for July 12 on the petition of Hua
Rong Finance Limited for the winding up of Gadery
Development Limited. A notice of legal appearance must be
filed on or before July 11.

GOLDPORT TECHNOLOGY LTD: Facing winding up petition
---------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of
Shell Developments (HK) Limited for the winding up of
Goldport Technology Limited. A notice of legal appearance
must be filed on or before June 13.

HONG KONG AUCTIONERS & ESTATE: Facing winding up petition
---------------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of Yu
Chai Sum for the winding up of Hong Kong Auctioneers &
Estate Agency Limited. A notice of legal appearance must be
filed on or before June 13.

iMERCHANTS: Annual loss reaches HK$9.27M
----------------------------------------
E-commerce solutions provider iMerchants reported a net
loss of HK$9.27 million in the year to March 31, as revenue
growth was insufficient to cover development costs of its
Internet projects.

A year earlier, the company reported a HK$4.65 million net
loss. Turnover last year more than tripled to HK$15.16
million.  The company helps companies develop business-to-
business trading platforms and on-line financial services,
in addition to providing on-line payment solutions.

Chairman Leroy Kung Ling-yuen said the recent valuation
correction in Internet-related shares and the collapse of
some dotcom firms would not have a material impact on the
company's business. He said: "Most of our clients are
established old economy companies that are developing on-
line businesses."

More than 90 per cent of the company's revenues were
derived from traditional non-on-line companies, he added.
He said the stock-market correction was to the company's
advantage, as it would make it more difficult for potential
competitors to enter the market due to funding obstacles.
The company raised net proceeds of HK$327 million through a
flotation in March on the Growth Enterprises Market. The
company is planning to open an office in Singapore next
month and one in Beijing soon after. (South China Morning
Post  02-Jun-2000)

LEADINGAIN INT'L LTD: Facing winding up petition
------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of
Union Bank of Hong Kong Limited for the winding up of
Leadingain International Limited. A notice of legal
appearance must be filed on or before June 13.

MEILAI INVESTMENT CO.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
Vendome (Asia Pacific) Limited for the winding up of Meilai
Investment Company Limited. A notice of legal appearance
must be filed on or before June 20.

RIGHT CAPITAL CO.LTD.: Facing winding up petition
-------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for July 5 on the petition of
Standard Chartered Bank for the winding up of Right Capital
Company Limited. A notice of legal appearance must be filed
on or before July 4.

U-TENDERS FURN.& WOODENWARE: Facing winding up petition
-------------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of
Kwong Yat Chuen Thomas for the winding up of U-Tenders
Furniture & Woodenware Manufactory Limited. A notice of
legal appearance must be filed on or before June 13.

WORLD BUSINESS CENTRE (HLDGS.): Facing winding up petition
----------------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of
Shenzhen Jianye Company Limited for the winding up of World
Business Centre (Holdings) Limited. A notice of legal
appearance must be filed on or before June 13.


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

BANK DANAMON: To be recapitalised mid June
------------------------------------------
A leading lawmaker said the recapitalisation of Bank
Danamon, which is to merge with eight ailing banks, will
not take place before the middle of June.

Sukowaluyo Mintorahardjo, said the recapitalisation fund
would not be much different from the amount proposed by the
Indonesian Bank Restructuring Agency (IBRA), which controls
Danamon and the eight other ailing banks. Earler IBRA said
Danamon, after the merger, would need Rp28.87 trillion
(US$3.4 billion) for its recapitalisation. (Asia Pulse  02-
Jun-2000)

BANK OF CENTRAL ASIA: Market debut falls short
----------------------------------------------
Bank Central Asia's much waited stock market debut on
Wednesday failed to boost the bearish sentiment on the
local exchange as lingering uncertainty over the political
and social situations continued.

BCA shares quickly gained Rp 25 to reach Rp 1,425 right
after the market opened and increased Rp 25 further to
momentarily touch Rp 1,450.  But the bank's share price
failed to reach higher ground and instead dropped in late
trading to the end the day at its initial price of Rp
1,400.

As many as 169 million shares changed hands in the regular
trading board. The BCA listing, the first capital market
debut made by the Indonesian Bank Restructuring Agency
(IBRA), was earlier expected to boost market sentiment,
which has been under pressure for weeks due to uncertainty
over the country's political and social climate.

IBRA, which controls over Rp 600 trillion in assets taken
over from owners of nationalized and closed down banks,
initially hoped the BCA listing would serve as the
benchmark for its future public offering plan.

"The market sentiment is currently negative. The BCA
listing happened at the wrong time," Goei Siauw Hong of PT
Nomura Indonesia said.

He hinted that the banking stocks were not going anywhere
yet as the domestic banking sector was still in shaky.
Equity analyst Martin Panggabean said, however, that BCA
shares were good for long-term investment. He acknowledged
that the market's response to the BCA shares was not as
good as expected, but he said such a response did not mean
that BCA shares were bad.

"The BCA share price will decrease only in the short term,"
he said, adding that the listing was not timely.

According to Martin, the BCA listing was made at a time
when the government was going to increase interest rates
and when banking stocks were going down worldwide.
Hong said BCA shares would start to be tested by the market
on Friday, after a market holiday on Thursday.

"The first day of trading on JSX usually does not reflect
how the market will treat a company's shares. We will see
on Friday about BCA shares," he said.

Statistically on JSX, parties related to the listing
company usually intervene on the first day of trading to
give the impression that the initial public offering (IPO)
is a success, according to Hong.

"With BCA's first day of trading, we also felt there was
some support in the market which defended the bank's share
price to stop it decreasing past the Rp 1,400 initial
price," he said.

An analyst at a local securities company confirmed there
was intervention to support BCA's share price in trading on
Wednesday.  "As much as Rp 140 billion in 'buying'
transactions was done by major state-owned securities
companies, and some Rp 25 billion by smaller securities
companies," the analyst said.

However, IBRA's deputy chairman Jerry Eng said the
government did not have the resources to intervene in the
equity market to boost BCA shares.  "BCA's initial share
price was appropriately set to reflect current conditions,"
he said during a media briefing on Wednesday morning.

BCA listed its shares on Wednesday after it offered 662.24
million shares or 22.5 percent of its total equity in its
initial public offering between May 19 and May 23. IBRA
said the BCA public offering was oversubscribed 1.2 times.
IBRA, which took over BCA in May 1998 from the Salim Group
after a massive run on the bank, owned 93 percent of the
bank before the IPO.

Listed on the same day on the JSX was securities company PT
Panin Sekuritas, which sold its initial shares at Rp 550
and ended closing at Rp 700 on Wednesday, with 49 million
shares traded.  Hong said the shares of Panin Sekuritas
only circulated within the hands of a certain party,
suspecting that the shares were being cornered.

"They are keeping the company shares to themselves for the
time being and then could sell them on the market for a
gain when the price is made high by them," he said. "It is
so difficult, if not impossible, for investors to buy Panin
Sekuritas shares," he added.

Hong said other small companies who practiced similar
actions recently were PT Asiaplast and PT Kridaperdana
Indahgraha.   "The IPOs of these small companies of course
cannot be used as a measure of market performance," Hong
added. (Jakarta Post  02-Jun-2000)


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J A P A N
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DAIHYAKU MUTUAL LIFE INS.CO.: FSA appoints administrators
---------------------------------------------------------
The Financial Supervisory Agency said Thursday it has
appointed one institution and two individuals to administer
the collapsed Daihyaku Mutual Life Insurance Co.

The administrators are the Life Insurance Association of
Japan; Takaaki Miura, a certified public accountant; and
Akira Kosugi, a lawyer.

Taking over Daihyaku's operations as well as management and
disposal of its properties, the administrators will start
assessing Daihyaku's assets and begin seeking a company to
take over the insurer's outstanding policies. (Nikkei  02-
Jun-2000)

DAIHYAKU MUTUAL LIFE: Moody's downgrades strength rating
--------------------------------------------------------
Moody's Investors Service has downgraded the insurance
financial strength rating of Daihyaku Mutual Life (Daihyaku
Life) to Caa2 from Caa1. The rating outlook for the company
remains negative.

Daihyaku Life announced that for the fiscal year ending
March 2000 it fell into negative net worth. Subsequently,
the Financial Supervisory Agency (FSA) of Japan ordered the
company to cease certain operations. Although Daihyaku's
policyholders of death benefits will receive full
protection until March 2001, policyholders of saving-type
products are, in Moody's opinion, likely to see a reduction
of guaranteed rates.

Since March 30, 1999, Daihyaku has been operating as a
maintenance company for policies issued prior to March 30,
1999, and sold its franchise for new business to Manulife
Century Life Insurance Company.

Moody's initially assigned a B3 rating to Daihyaku Life on
November 21, 1997 and downgraded the rating to Caa1 on June
9, 1999. That downgrade reflected a more stringent
regulatory review of reserves on non-performing assets, and
the heightened risk of accounting realization of embedded
losses on assets by external auditors, after the failure of
Toho Mutual Life Insurance Company.

The rating agency thus alerted the Japanese market place -
including investors, policyholders, and distributors - to
the substantial credit risks at Daihyaku more than two
years ago.  Daihyaku Mutual Life, headquartered in Tokyo,
is a Japanese life insurance company with assets of Yen 2.1
trillion as of September 30, 1999. (Moodys  01-Jun-2000)

DAIHYAKU MUTUAL LIFE: Joyo, Ashikaga loans uncollectible
--------------------------------------------------------
Joyo Bank (8333) and Ashikaga Bank (8335) said Thursday
that they might not be able to recover loans made to
Daihyaku Mutual Life Insurance Co., which was ordered
Wednesday by the Financial Supervisory Agency to halt some
of its operations.

Joyo Bank said that it plans to create a loan-loss
provision during the first half of the current fiscal year
for the amount deemed unrecoverable. The bank has loaned 11
billion yen to the failed insurer. It added that the money
will come from profit and capital gains from the sale of
shareholdings, and as a result, it will not revise the
fiscal 2000 earnings forecast released May 25.

Ashikaga Bank also plans in the first half to write off the
unrecoverable portion of the 11 billion yen that it has
extended to the insurer. The bank added that it does not
see any need to change its earnings forecast. (Nikkei  02-
Jun-2000)

DAI-ICHI HOTEL LTD: Hyakujushi Bank may not recover loans
---------------------------------------------------------
Hyakujushi Bank (8386) announced that it may not recover a
total of 1.4 billion yen in loans to Dai-Ichi Hotel Ltd.
(9710), which on Friday filed for court protection from
creditors.

The Kagawa Prefecture bank said, however, that portions of
the loans are covered by collateral and the remainder by
loan-loss reserves, making it unnecessary to change the
fiscal 2000 earnings forecast it made earlier.

Watching the hotel operator's balance sheet performance
deteriorate over the past several years, the bank says it
has finished setting aside enough reserves to cover a
potential loss. (Nikkei  02-Jun-2000)

HIKARI TSUSHIN: Fears 1 billion Yen unrecoverable
-------------------------------------------------
Hikari Tsushin Inc. (9435) said Thursday it fears a total
of Y1 billion in credit and investment extended to Advance
International, one of its mobile phone sales agents, will
go bad after Advance went bankrupt on Wednesday.

As of April 30, Hikari had credits worth a total Y984
million extended to Advance and warrants of Y70 million. It
also has a separate Y9.9 million invested in Advance's
capital.

Advance is the third Hikari sales agent to fail. Earlier
this year, Globalwave, formerly a sales agent of Hikari,
failed, giving Hikari a loss of Y2.4 billion in accounts
receivable and another loss of Y325 million in investments.
(Nikkei  02-Jun-2000)

KYOEI INSURANCE CO.: Prudential Ins. to buy stake
-------------------------------------------------
Prudential Insurance Co., easing its way deeper into the
world's No. 2 insurance market, said Wednesday it is
planning to become the biggest shareholder in a struggling
Japanese insurer.

Prudential said it signed a memorandum of understanding
with Kyoei Life Insurance Co., laying out plans to invest
up to $300 million in stock and other securities issued by
Japan's 10th-largest life insurer.  The U.S. insurance
giant already has a Japanese subsidiary -- about one-
fifteenth the size of Kyoei -- and says it has no plans to
boost market share by acquiring another company, as many
other foreign insurers have done recently.

Instead, Prudential will keep its stockholdings in Kyoei to
20% or less, and boost earnings by entering into a variety
of business agreements, said Kiyo Sakaguchi, chief
executive of Prudential's Japanese unit and head of
international operations. That approach contrasts with the
one taken by other foreign companies such as Canada's
Manulife Financial Corp., which last year bought out the
sales operations of troubled Daihyaku Mutual Life Insurance
Co., leaving the parent company to struggle with
unprofitable old policies.

Daihyaku collapsed Wednesday with a negative net worth of
45 billion yen.  Prudential instead proposes to help revive
Kyoei, which is grappling with many of the same problems as
Daihyaku, and strengthen its own franchise at the same
time.

Prudential plans to earn fees by reinsuring half of Kyoei's
new business for the next several years, and cut costs by
merging Kyoei's computer and back-office administration
systems with that of Prudential's Japan unit, said Mr.
Sakaguchi.  The two companies may establish a joint
marketing company that will sell Kyoei insurance and
Prudential mutual funds, using Prudential sales techniques.
Kyoei also has offered to introduce Prudential to some of
its specialized Japanese clientele -- a market difficult
for outside companies to break into on their own.

Mr. Sakaguchi expects cost savings and new business from
the tie with Kyoei to have a "significant" impact on
Prudential's bottom line in Japan, although he declined to
give targets.  (Asian Wall Street Journal  02-Jun-2000)

MATSUO BRIDGE CO.: Second straight group net loss
-------------------------------------------------
Matsuo Bridge Co. (5913) on Tuesday announced a group net
loss of 2.86 billion yen for the year ended March 31,
marking its second straight deficit.

Earnings were hurt by a roughly 4.3 billion yen
extraordinary charge stemming from changes in accounting
rules for retirement reserves.

Group sales shrank 12% to 32.6 billion yen. The number of
bridges assembled actually rose, but the price per unit
fell amid stiffer competition. Nevertheless, group
operating profit doubled from a year earlier to 308 million
yen thanks to cuts in expenses like labor costs.

For the year ending March 2001, Matsuo Bridge hopes for a
group net profit of 400 million yen. It expects revenue to
grow 7% to 35 billion yen, and aims to improve
manufacturing efficiency by consolidating its bridge-
related operations at one facility. (Nikkei  31-May-2000)

NIPPON CREDIT BANK: Negative worth swells to 3.24T Yen
------------------------------------------------------
Nippon Credit Bank's negative net worth as of March 31 had
swelled by 50.8 billion yen from six months earlier and
149.8 billion yen on the year to 3.24 trillion yen, the
bank's earnings report revealed Friday.

Much of the deterioration was due to falling land prices
and the collapse of firms to which NCB had loaned money.
The bank had a net operating loss of 23.7 billion yen and a
pretax loss of 113.7 billion yen in fiscal 1999.  Its
nonperforming loan balance was 1.16 trillion yen, down 2.7
trillion yen from six months earlier as the Resolution
Collection Corp. bought the bulk of NCB's bad loans.

NCB President Takuya Fujii said the same day that he aims
to sell the bank as a single entity as soon as possible. "I
want to avoid expanding the burden on taxpayers that
prolonged nationalization would cause," he said.

He was commenting on the Financial Reconstruction
Commission's announcement of the breakdown of talks to sell
the bank, which is temporarily under government control, to
a consortium led by Softbank Corp. (9984). He also
indicated that there are other potential buyers apart from
the consortium.  (Nikkei  02-Jun-2000)

NIPPON CREDIT BANK: Cerberus re-enters purchase race  
----------------------------------------------------
William Richter, president of Cerberus Capital Management,
declared Thursday his group's renewed interest in taking
over the nationalized Nippon Credit Bank.

In an interview with The Nihon Keizai Shimbun, Richter said
that Cerberus has already resumed talks with the Financial
Reconstruction Commission, saying the group had notified
the FRC of its willingness to buy the bank.

Since the FRC has reopened talks with other candidates, the
U.S. investment fund now has a chance to purchase the bank.
On Wednesday, the FRC rescinded priority negotiating rights
for a consortium of Softbank Corp. (9984), Orix Corp.
(8591) and Tokio Marine & Fire Insurance Co. (8751).

Cerberus had competed with the Softbank-led consortium for
the rights in February.  Richter said his group has enough
investment funds available to target Asia and would have no
difficulty in buying NCB. (Nikkei  02-Jun-2000)

NISSAN DIESEL MOTOR CO.: Avoids negative group net worth
--------------------------------------------------------
Nissan Diesel Motor Co. (7210) succeeded in avoiding
negative net worth on a group basis in the year ended March
31, with 5.5 billion yen in group shareholders' equity, the
company announced Wednesday.

Despite a 42.6 billion yen extraordinary loss, the Nissan
Motor Co. (7201) affiliate posted a 700 million yen group
net loss thanks to assistance from Nissan Motor and the
securitization of a plant.

The results are the truck and bus manufacturer's first
consolidated earnings.  The company recorded an operating
loss of 2.7 billion yen as a result of sluggish truck
sales. It also reported a 9.6 billion yen pretax loss due
mainly to the inheritance of debts from the liquidated
Nissan Diesel Motor Sales Co.

The extraordinary loss included 30 billion yen to write off
credit claims on Nissan Diesel Motor Sales and to cover 6
billion yen in additional retirement allowances. The
company, however, posted an extraordinary profit of 22.5
billion yen through the securitization of a plant in Ageo,
Saitama Prefecture.

"We will be able to post group net profit in the current
term," a company executive said. For the year through March
2001, the company forecasts group operating profit of 10
billion yen and group net profit of 500 million yen.

The firm's interest-bearing debt, however, now stands at
476.8 billion yen on a consolidated basis, 30% higher than
annual group sales. Interest payments should be heavy in
the current term.  (Nikkei  01-Jun-2000)

NISSAN DIESEL MOTOR CO.: Plans rehab completion by FY2004
---------------------------------------------------------
Nissan Diesel Motor Co. (7210) hopes to complete its
corporate rehabilitation program by fiscal 2004 through
cooperation with the Renault group and a 20% cut in
procurement costs, it was learned Wednesday.

But since the group's ratio of equity capital to total
assets stood at a mere 0.9% at the end of March 2000,
rising interest rates or stagnating sales could see the
firm's liabilities exceed its assets, throwing it into
another solvency crisis.

Nissan Diesel and Renault V.I., a Renault SA subsidiary,
have agreed to cooperate in seven areas including mutual
supply of engines and vehicles. "Through cooperation, we
aim to generate 6 billion yen profit in fiscal 2004," said
Hirofumi Nakazawa, president of Nissan Diesel.

Numerous analysts believe, however, that the benefits of
the tie-up with Renault V.I. will not be seen until fiscal
2003 or thereafter. Nissan Diesel hopes to secure a 3
billion yen profit increase this fiscal year on higher
sales, but the company will likely post a net loss should
demand fail to recover.

Asked about the company's plan to cut its more than 470
billion yen in interest-bearing debt, a top executive at
the firm said, "The company has not factored in the
negative impact from a rise in interest rates." A 1 percent
point increase in interest rates will expand the firm's
interest payments by the equivalent of its equity capital.

Since Nissan Diesel is unlikely to be able to boost capital
in the coming two years, some analysts believe it cannot
help but ally with other automakers if it fails to carry
out the restructuring program. (Nikkei  02-Jun-2000)


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

DAEWOO MOTOR: FTC set to block Hyundai's bid  
--------------------------------------------
The Fair Trade Commission (FTC) said yesterday it will
review the legality of bids, particularly Hyundai's, for
the sale of Daewoo Motor and report its conclusions to
creditors.

The FTC said that it is unlikely that Hyundai will be able
to acquire Daewoo on its own. The antitrust watchdog said
that such a deal would give the company a virtual monopoly
which would violate current antitrust laws.  The FTC
revealed it is cooperating with Daewoo Corporate
Restructuring Committee in assessing the matter.

Aside from Hyundai, car giants scrambling for control of
Daewoo include GM, Ford, DaimlerChrysler and Fiat. The
Corporate Restructuring Committee is scheduled to receive
final offers by June 26, whereby it will select two
finalists June 30 and make a final decision by September.

"The FTC will review the legality of the offers received by
the Restructuring Committee," said a FTC official. "In the
event the restructuring committee disregards the FTC in
making its selection, the commission may decide to nullify
the deal."

The official added by saying that since Hyundai's
acquisition of Kia Motors, absorbing Daewoo will create a
monopoly which will hinder the development of the Korean
automobile industry.

"However, if Hyundai opts to seek a consortium bid with a
foreign partner, the FTC will decide the legality of its
bid depending on Hyundai's stake in the offer," the
official said.

FTC Chairman Jeon Yun-churl said in his report to President
Kim Dae-jung in April that the FTC will focus its efforts
to prevention, rather than the dissolution of monopolistic
activities. (The Korea Herald  06-Jun-2000)

HYUNDAI GROUP: Regains normalcy,but sibling dispute lingers
-----------------------------------------------------------
On the surface, the Hyundai Group's family dispute appears
to be patched up, with retiring group Chairman Chung Mong-
hun, the fifth son of founder Chung Ju-yung, backing away
from a fight with his defiant elder brother, Hyundai Motor
Chairman Chung Mong-koo who has refused to step down.

The group's restructuring committee, representing Mong-
hun's interests, said yesterday that it has no intent to
take any countermoves against Mong-koo's refusal to quit
his chairmanship of Hyundai Motor-Kia Motors. Instead, the
committee has set about revamping Hyundai's management
structures in accordance with the founder's will to
transfer powers to professional managers, committee
officials said.

Similarly, Hyundai Motor-Kia Motors, which reappointed
Mong-koo as its chairman at a Thursday board meeting in
defiance of the founder's decision, seems to have regained
its managerial normalcy, resuming its efforts to take over
Daewoo Motor and tie up with global majors. Notably, the
automaker decided to move up its scheduled separation from
other Hyundai Group companies by three weeks, and will file
the relevant applications with the Fair Trade Commission
next week.

Despite the external peace, however, tensions are still
running high between the two brothers, who had desperately
battled against each other for the control of group
chairmanship in March, analysts forecast.

The Mong-hun camp is expected to engineer elaborate schemes
to unseat Mong-koo from his chairmanship of Hyundai Motor.
It may also attempt to enlist the assistance of the elder
Chung, known to be friendly to Mong-hun, to pressure Mong-
koo to give up his management position. The elder Chung has
not appeared in public since his retirement Wednesday.

In the meantime, analysts do not rule out the possibility
that the Chung family would escalate its internal dispute
to an equity battle at the automaker's board meeting. In
terms of equity holdings, the Mong-koo camp appears to have
the upper hand.

Mong-koo, who owns 4 percent of Hyundai Motor, and his
friendly forces are said to be capable of mobilizing up to
30 percent of voting rights, compared with the elder
Chung's 6.8 percent stake. The elder Chung aims to raise
his stake in the automaker up to 11.8 percent shortly, but
the Mong-koo camp is also pushing to use 250 billion won
($223.2 million) of company funds to purchase its own
shares from the stock market.

Mong-hun's aides warn that the defiant Hyundai Motor
chairman will be eventually subject to harsh market
judgements for his managerial capabilities.

In counter, the Mong-koo camp says that the fallout from
liquidity crises at Hyundai Engineering & Construction and
Hyundai Merchant Marine, run by Mong-hun, has inexplicably
ascended on the chairman of profitable Hyundai Motor, which
posted over 600 billion won in net profits last year. It
also raises suspicion that the elder Chung's retirement
decision is a carefully-devised plot by the Mong-hun camp
to eliminate Mong-koo.

Mong-koo yesterday visited a Kia Motors plant before
leaving for the United States to discuss tie-up issues,
while Mong-hun left for Japan for unknown reasons. The
analysts warn that the lingering sibling fight at Hyundai
is feared to sharply erode investor confidence in the group
management once again, triggering a fresh liquidity crisis.
(The Korea Herald  03-Jun-2000)

HYUNDAI MOTOR: Chairman defies order to quit post
-------------------------------------------------
The chairman of Hyundai Motor, Chung Mong-koo, on Thursday
defied his father's order to surrender his post.
The outbreak of filial warfare reinforced doubts about the
troubled conglomerate's ability to streamline its
operations.

Mong-koo received the unanimous backing of Hyundai Motor's
board, which announced that he would retain his post. Lee
Kye-ahn, president, said that the directive from Hyundai
Group that Mong-koo step down had no legal bearing. Mr
Chung would see the company through its separation from
Hyundai Group later this month.

On Wednesday, Hyundai's 84-year-old founder, Chung Ju-yung,
stunned the business community by announcing that he and
two of his sons, Mong-hun and Mong-koo, would cede their
managerial roles. The concession was a big fillip to the
government's attempts to bring the nation's largest
conglomerate to heel.

It followed a liquidity crisis at Hyundai's construction
and shipping units. Korea Exchange Bank, the group's main
creditor, stepped in with emergency funds.  Yesterday,
Mong-hun announced his intention to resign as group
chairman. He confirmed he would retain control of Hyundai
Asan, which oversees North Korean investments. But Mong-koo
refused to follow suit. The move lent some weight to market
scepticism about whether Hyundai will follow up its
reformist rhetoric with action.

Eugene Chung, research head at Jardine Fleming, said: "We
need more clarity. For example, will the majority
shareholders have board seats? We want a clear separation
of ownership and management."

Mong-koo received unexpected support from the government.
Lee Yong-keun, chairman of the financial supervisory
commission, said Mong-koo could remain if he proved a
capable manager and won his family's endorsement. Mong-koo
is believed to harbour suspicions that Mong-hun may still
be able to control the group through his position at
Hyundai Asan. But that scenario is unlikely if Hyundai
follows through on its pledge to replace the Chungs with
professional managers.

Hyundai hopes to solve its short-term liquidity problems
with an infusion of 5.9 trillion won from the sale of
assets. It will also slash investment. (Financial Times  
02-Jun-2000)

KIA MOTORS: Korea,Brazil reach conditional pact on fines
--------------------------------------------------------
Korea and Brazil have discussed ways to exempt Kia Motors
from the $210 million fines slapped by the Brazilian
government for the Korean automaker's failure to abide by
an investment agreement, the Ministry of Commerce, Industry
and Energy said Saturday.

A ministry delegation to Brazil, led by Vice Minister Oh
Young-kyo, met with their counterparts to resolve the
thorny issue and discuss the launching of an industrial
cooperation fund.  The delegation asked Brazil to come up
with a solution to the issue, saying that Kia Motors, when
exempted from the fines, plans to invest $140 million in
Brazil this year.

In response, the Brazilian officials said if Kia officially
presents a specific investment plan in writing, they will
do their best to get the carmaker out of the quandary.
Kia failed to make good on its promise to invest $500
million in 1997 as a result of its bankruptcy and legal
dispute with local importers. The Brazilian government
imposed the fines because it had already granted customs
benefits to Kia on condition that it makes the investment.

In Saturday's meeting, officials of the two countries also
agreed to set up a $10 million fund for industrial
cooperation. Brazil also agreed to improve the procedures
for issuing visas to Koreans who want to stay there
permanently.

The officials agreed to improve Brazil's quality
certification method on Korean tires and the Korean side
also expressed concerns about Brazil's moves to restrict
Korean nylon products and stainless steel pipes, the
ministry said.  (The Korea Herald  05-Jun-2000)


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

GRAND BRILLIANCE: Allowed to extend FRNs
----------------------------------------
Grand Brilliance Sdn Bhd (GBSB) has obtained approval from
Bank Negara Malaysia to extend the tenure of the first and
second tranche of its Floating Rate Notes (FRN) for RM16
million (US$4.2 million) and RM9 million respectively to
May 30, 2001.

The first and second tranche of the FRN were originally
scheduled to mature on May 30, 2000 and September 22, 2000
respectively.  A company statement here said Friday the
facility, which was  previously downgraded to C3/NP, had a
corporate guarantee from Sistem Televisyen Malaysia Bhd
(TV3).

Currently, TV3 is in the midst of restructuring its
financial obligations with the help of the Corporate Debt
Restructuring Committee.  A scheme had been proposed and
was currently awaiting approval of TV3's creditors. The
scheme would also deal with the principal repayment of the
FRN.  RAM is closely monitoring the development and would
make the appropriate announcement as it develops. (Asia
Pulse  02-Jun-2000)

GRANITE INDUSTRIES BHD: Incurred pre-tax loss for Q1
----------------------------------------------------
Granite Industries Bhd has incurred a pre-tax loss of
RM342,000 on a turnover of RM20.216mil for its first
quarter ended March 31.

The group had total borrowings of RM687.377mil at end-
March.  Granite said, however, the losses were lower than
the RM4.423mil incurred in the last quarter of 1999. It
attributed the improvement to lower operating costs due to
continuing efforts to control them as well as increase
productivity and efficiency.  (The Star  02-Jun-2000)

LIEN HOE CORP BHD: SC conditionally approves restructure
--------------------------------------------------------
Lien Hoe Corp Bhd has received conditional approval from
the Securities Commission (SC) for its proposed debt
restructuring exercise, which includes capital reduction,
share consolidation, acquisitions and warrants and rights
issues exercises.

In an announcement to the Kuala Lumpur Stock Exchange, Lien
Hoe said among the conditions were that the company wind up
its investments in two overseas subsidiaries -- Carlton
Resources Inc in Liberia, Africa, and PT Budi Trisakti in
Acheh, Sumatra - and to maximise recovery of its investment
costs and advances paid to both these companies.

Lien Hoe is also prohibited from expanding its operations
overseas without the commission's prior written approval.
In addition, the company is required "to appoint an
independent audit firm to be approved by the SC for the
purpose of reviewing and investigating the possible
misconduct of the company's decision to invest in Carlton
and PT Budi," the statement said.

It added that the audit firm is to report directly to the
SC instead of Lien Hoe, which shall bear all expenses
relating to the appointment of the audit firm.

Lien Hoe has proposed to reduce its existing share capital
from RM270.15 million comprising 270.15 million RM1 shares
to RM202.6 million, with 25 sen being cancelled from the
RM1 shares to 75 sen. The 270.15 million, 75 sen shares
will then be consolidated in the proportion of four, 75 sen
shares into three RM1 shares.

The company has also proposed a debt restructuring of about
RM212.06 million owed by it and its subsidiary Lien Hoe
Resorts Sdn Bhd to creditors.  It will issue RM84.8 million
nominal value of redeemable secured bonds, together with
cash payment of RM16.38 million. The remaining balance of
RM127.24 million will be restructured by the issue of up to
127.24 million warrants on the basis of one warrant for
every two shares held after the proposed capital reduction
and share consolidation exercise.

Lien Hoe has also proposed to buy Billiontex Sdn Bhd and
Rusella Teguh Sdn Bhd for RM53.6 million and RM53.88
million respectively. The purchases are to be satisfied by
the issuance of RM53.6 and RM53.88 million nominal value of
two per cent irredeemable convertible unsecured loan stocks
(Iculs) respectively at 100 per cent of its nominal value.
It will also buy Atria Properties Sdn Bhd for RM51.64
million to be satisfied by the issuance of rights through
the allotment of 51.64 million new RM1 shares in Lien Hoe.
(The Edge  05-Jun-2000)


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

FIRST WOMEN's CREDIT CORP.: SEC to decide mgmt issue
----------------------------------------------------
The Securities and Exchange Commission (SEC) will decide
next week if it will dissolve the interim management
committee (IMC) it created to oversee the operations of
cash-strapped First Women's Credit Corp. (FWCC).

SEC Chairman Lilia Bautista said the commission en banc
will decide by Tuesday on whether or not to scrap the IMC
based on reports that FCWW management already acquired a
ruling from the Regional Trial Court supporting its
petition to inhibit the SEC-appointed management committee
from presiding over the case of the company.

Earlier, FWCC told the SEC it had no intention of complying
with the IMC and petitioned the corporate watchdog to
withdraw a previous order appointing a hearing officer from
further presiding over the case since the officer already
prejudged the case as shown in his previous orders.
FWCC said SEC hearing officer George Palmares was
manifestly biased when he issued the order last Nov. 17
with undue haste. Palmares granted the appointment of an
IMC to take over the management of FWCC.

"From this pronouncement, it is quite clear that the
hearing officer already prejudged the case by finding that
there was diversion of FWCC funds to the RJ Group of
Companies and that there is dissipation, loss and wastage
of corporate funds," FWCC said.

FWCC said the order of Palmares stating there is diversion
of FWCC fund clearly shows that he has already committed to
the petitioner a judgment that is favorable to it.
(Philippine Star  03-Jun-2000)

JG SUMMIT: Not concerned with dollar debts
------------------------------------------
Despite the bearishness expressed by analysts on the impact
of the $800-million dollar-denominated obligations on full-
year earnings of conglomerate JG Summit Holdings, Inc. the
management is optimistic it can service ballooning debts
with over 20 billion Philippine pesos (PhP) (US$469.12
million at PhP42.633:US$1) in cash on hand.

Analysts estimated JG Summit's foreign exchange losses to
hit PhP1.3 billion ($30.50 million) this year which would
lower net earnings of PhP2.47 billion ($57.93 million) from
PhP3.2 billion ($75.0 million) last year.  In an interview
with BusinessWorld yesterday, JG Summit executive vice-
president Lance Y. Gokongwei, however, said the company can
still cope despite the huge obligations.

"We are trying to hedge most of our dollar borrowings by
maintaining an almost equivalent amount in cash. We're
trying to hedge our liabilities primarily by keeping
sufficient assets in dollar forms," Mr. Gokongwei said. The
JG Summit official identified the textiles and
telecommunications businesses as the main dollar drivers of
the Gokongwei-owned firm.

"A lot of our revenues are in dollars so we can still cope.
The forex losses is insignificant because we're generally
hedged," he said. JG Summit's dollar-denominated debts are
broken down as follows: $300 million convertible bonds
which will mature in 2003, $200 million notes due in 2002,
another $200 million due in 2004 and $100 million notes in
2006. As of the first quarter, the company's total current
liabilities amount to PhP15.36 billion ($360.28 million)
while long-term debts stand at PhP38.82 billion ($910.56
million).

Analysts said that while JG Summit's major businesses are
expected to post growth of 48% this year, food firm
Universal Robina Corp.'s (URC) $100-million notes are seen
to affect earnings if the peso continues its weakness.
Digital Telecommunications Philippines, Inc. (Digitel) also
posted net losses amounting to PhP39 million ($914,784) for
the first three months.

During the period, the telecom arm's net income also
declined to PhP508.77 million from PhP677.71 million
($11.93 million from $15.89 million) the previous year.
While revenues grew to PhP7.46 billion ($174.98 million),
cost and expenses also increased. Subsidiary Cebu Pacific
Air has reportedly finalized an agreement with Boeing Co.
for the local carrier's purchase of 15 Boeing 717s to
refleet the company's DC8 fleet in the next five years.

Cebu Pacific spokesperson Ron Ridgeway said the parties are
still finalizing the legal and technical details as well as
the financing arrangements for the acquisition of the
planes. Cebu Pacific and Boeing are expected to formally
sign the agreement in two weeks' time. (Business World  02-
Jun-2000)

PHILIPPINE APPLIANCE CORP.: Makes asset-for-debt swap
-----------------------------------------------------
Philippine Appliance Corp. (Philacor), the country's
leading manufacturer of refrigerators and freezers,
succumbed to an asset-for-debt swap arrangement caused by
serious financial stress.

An industry official said the arrangement will compel the
company to surrender its property in Sucat, Paranaque, the
site of its old plant to pay its P1 billion debt.

"Philacor used a manufacturing principle that proved
unwise. It was producing at capacity when there was no
demand. It was operating on a fully integrated basis
without outsourcing, thus sacrificing research and
technology," the official, who refused to be identified,
said.

He said Philacor built two new plants two years ago when
crisis heightened, financed through borrowings.
Philippine Rating Services Corp. (PRSC), a local credit
agency, said last week it has downgraded its credit for
Philacor's outstanding P1-billion long-term commercial debt
paper (LTCP) as Philacor's present cash position is
insufficient to service its scheduled maturing obligations.

However, it said Philacor's assets are more than sufficient
to meet its obligations.  Of the P1-billion debt, P350
million matured on May 30, while the rest will mature in
2001 to 2002. (ABS/CBN News Channel  05-Jun-2000)

PHILIPPINE APPLIANCE CORP.: GE not likely to bail out
-----------------------------------------------------
General Electric is not likely bail out Philippine
Appliance Corp. (Philacor) which is struggling under the
weight of its debts and is facing the possibility of
defaulting on its outstanding obligations.

Philacor is the latest among the country's corporate
institutions to succumb to heavy debt problems. Despite
their long history together, however, industry experts said
GE is not likely to take over Philacor and its burgeoning
debts despite the fact that it remains in control of over
half the domestic market for household appliances.

Speaking on condition of anonymity, an executive from a
competing company said Philacor had spent on a new
manufacturing plant, but instead of selling its old plant
and getting whatever value could be had, the company kept
the old plant which only contributed to its overhead costs.

Aggravating Philacor's financial problems, the source said,
was the fact that the company used dollar loans to finance
its expansion program.  The source also said Philacor has
always produced appliances based on its capacity,
regardless of how much the market can actually absorb. This
left the company with huge inventories that it could not
move and a plant that is producing at peak capacity.

"In this business, you want to produce only what you are
sure you can sell," the source said. "Especially in these
times when orders are beginning to go down and we are
seeing the first real signs of pessimism in the market."

Although sales remain steady, the source said dealers have
begun delaying their orders until they are certain that
they will be able to move the products. Under these
circumstances, the source said it is not a good business
principle to "keep producing just because you can."

According to the source, it is unlikely that there will be
a bailout of Philacor, especially by GE. "If I were GE, why
would I want to do that? I wouldn't want the problems that
would come from owning a company with Philacor's troubles,"
the source said.

Philacor manufactures GE brands as well as White
Westinghouse brands under a licensing agreement. Although
several other brands as well was imported brands have
penetrated the market, the company's lead over its
competition remains big despite its problems.

The Philippine Rating Services Corp. (PhilRatings) earlier
downgraded the rating on Philacor's outstanding P1-billion
long-term commercial paper (LTCP), giving it a new rating
of "PRS Ca" (from the previous "PRS Baa").  This rating
indicates "a very poor credit standing, such that there is
a high possibility of default."

Philacor issued the LTCP in May 1997, using the proceeds
mainly for the construction of a modern manufacturing
facility in Calamba, Laguna. The company also incurred
foreign currency-denominated loans for the purchase of
plant equipment and imported raw materials.  Of the P1-
billion LTCP float, P350 million matured on May 30, 2000,
with the rest maturing in 2001-2002. (Philippine Star  05-
Jun-2000)

PHILIPPINE NAT.BANK: Audit shows capital PhP2B understated
----------------------------------------------------------
The capital of Philippine National Bank (PNB) is
"understated by almost P2 billion," bank president
Feliciano L. Miranda, Jr. said Friday night.

This was the "main finding" of the SyCip, Gorres, Velayo &
Co.'s audit on PNB's performance during the first four
months of the year. PNB had a capital of 13.92 billion
Philippine pesos (US$327.8 million at PhP42.465=US$1) in
the first quarter.

"The report was approved by the board Thursday night," Mr.
Miranda told BusinessWorld.

SGV also reported that PNB's bad debt actually represents
36% of its PhP110-billion ($2.59 billion) loan portfolio,
the worst in the industry, and is higher than the earlier
reported 33% based on Bangko Sentral (Central Bank of the
Phils.) computations. But this was primarily the result of
the reclassification of certain accounts.

"SGV insisted on reclassifying the accounts (as past due)
even if the interest was fully paid but the documentation
has not been finalized," Mr. Miranda said.  "It's just a
result of a reclassification of accounts. It's not accounts
turning sour," another PNB officer said.

The auditing firm, tapped by PNB and the Department of
Finance (DoF) to review the bank's books as a prelude to
its privatization, was also appointed as the bank's
external auditor this year.  Mr. Miranda said Yuchengco-
owned Rizal Commercial Banking Corp. (RCBC) and the LNL
Templeton consortium have begun their respective due
diligence audit on PNB. The two groups prequalified for the
scheduled bidding of PNB on Friday.

RCBC began last Thursday, while the LNL Templeton group,
comprised of US-based food conglomerate TLC Beatrice LLC,
Templeton Asset Management Corp. and a yet-to-be-identified
North American financial institution, started due diligence
only last Friday, he added.

Up for grabs is an estimated 80% of PNB, or the combined
stakes of the government, 30%; Chinese-Filipino tycoon
Lucio C. Tan, 46%; and the PNB Retirement Fund, Inc.,
3.53%.  Since Mr. Tan's entry into the bank, speculations
as to his real motive have flooded the market. PNB
management, however, has insisted that Mr. Tan is actually
the bank's "best hope."

To end talks that he bought into PNB to protect his other
companies' interests, Mr. Miranda said Mr. Tan offered to
transfer his companies' accounts in PNB to another bank.

"But I have requested him not to pull out. The other banks
will fight tooth and nail for it. PNB will be the loser,"
Mr. Miranda said in Filipino.

The PNB president said some of Mr. Tan's companies have
"substantial" borrowings from PNB, but clarified all these
are "current."   Asia Brewery, Inc. and flag carrier
Philippine Airlines, Inc. both have deposit and loan
accounts in the bank, while Fortune Tobacco Corp. and Mr.
Tan's piggery has deposit accounts, Mr. Miranda said.

"These are now DOSRI (directors, officers, stockholders and
other related interests) loans, yes. That's why we have not
given his companies additional loans. We are going to see
to it that rules and regulations are followed," he added.

A banking analyst noted that the public should even be
thankful for Mr. Tan's entry in the bank. "If you come to
look at it, his entry into PNB saved the government and
taxpayers a lot of money since the bank has incurred a lot
of losses," the analyst said.

During the first quarter of the year, PNB posted a net loss
of PhP932.63 million ($21.96 million). The bank has been in
the red for the past two years, losing PhP9.874 billion
($232.52 million) and PhP7.252 billion ($170.78 million) in
1999 and 1998, respectively. (Business World  05-Jun-2000)

WESTMONT INVESTMENT CORP.: SEC rejects lifting cease order
----------------------------------------------------------
The Securities and Exchange Commission (SEC) has turned
down the motion of Westmont Investment Corp. (Wincorp) to
lift the cease-and-desist order (CDO) earlier issued by the
corporate watchdog against the trouble investment firm.

In an order dated May 25, the SEC's Prosecution and
Enforcement Department (PED) said it stands firm on its
findings that Wincorp has been transacting commercial
papers on a with-recourse basis.

"The fact remains that the scheme used by Wincorp causes
grave and irreparable injury to the investing public,
violative of the laws and rules and regulations enforced by
the Commission. It has sourced funds from numerous
investors averaging more than seven-billion-peso (US$164.8
million at PhP42.465:US$1) worth of commercial papers per
month. It is also undisputed that Wincorp normally advanced
to its funders interest/principal whenever its borrowers
failed to pay the principal amount and/or interest of the
loan," the order said.

According to the SEC findings, Wincorp has sourced funds
from more or less 2,200 individuals based on the company's
outstanding balances of the cost of negotiated sales as of
December last year. During the same period, the accumulated
interest paid in advance to the funders for the account of
the borrowers amounted to PhP165.81 million ($3.9 million)
which shows that Wincorp's borrowers have been defaulting
on their obligations.

The SEC finding was contrary to Wincorp's claims that it
acted merely as a broker between a borrower and a lender
and had no liability to the lend in case of non-payment.
(Business World  05-Jun-2000)


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

SIAM CITY BANK: Newbridge leads bidding
---------------------------------------
US-based Newbridge Capital is still the front-runner in
bidding to purchase the last ailing Thai Bank, Siam City
Bank (SCIB), as the Bank of Thailand (BOT) will meet on
June 8 to decide on the sale of the bank, BOT Assistant
Governor Chaktip Nitibhon said.

The BOT assistant governor said the central bank will
announce its decision after a committee chaired by Governor
Chatumongkol Sonakul discusses proposals from all bidders.
The sale of SCIB has been delayed for more than a year
because buyers, including Newbridge Capital, did not offer
enough. These potential SCIB buyers were informed and asked
to re-offer their new bidding prices.

"This bidding call will be the last one. If no buyer offers
a price acceptable to the committee, the bid will be
revoked," Chaktip said, without mentioning what the central
bank or the Financial Institutions Development Fund, the
caretaker of SCIB, would do as a next step.

Earlier, BOT Governor Chatumongkol said the BOT told the
interested buyers to quote their new final prices for the
bidding, and if no buyer offer an acceptable price, within
the minimum scale set by the BOT, alternative action will
be adopted by the central bank.

Chatumongkok said SCIB was the only remaining state-owned
bank up for sale to interested foreign investors. "If no
foreign bank or financial institution is interested in
buying SCIB, the bank may be sold partly to Thai
investors," he was quoted as saying.

The sale of state-owned lenders is part of the government's
plan to rebuild the shattered financial sector where about
two-fifths of total loans are delinquent. The government
has shut down more than two-thirds of the country's finance
companies and taken control of half of the banks in the
past three years.

The government has sold three commercial banks to
foreigners in the past six months. HSBC last month agreed
to buy Bangkok Metropolitan Bank for a net investment of
US$359 million.  (Business Day  05-Jun-2000)

SUBMICRON TECHNOLOGY: Creditors to vote on bankruptcy
-----------------------------------------------------
Creditors of defunct electronics firm Submicron Technology
plan to meet this week to deliberate options on the
company's restructuring.

The Legal Execution Department has scheduled a meeting of
creditors for a final vote on June 23 to decide whether
Submicron should be declared bankrupt and foreclosure
proceedings taken.  Submicron is a wafer fabrication plant
set up by Alphatec Electronics founder Charn Usawachoke.
Total debt owed by the firm stands at around 19 billion
baht.

Legal advisers to creditors have proposed three options.
First is to request that Submicron enter debt restructuring
under the bankruptcy code of the Legal Execution
Department.  Second is to wait for a ruling to be handed
down by the Court of Appeals on Submicron's petition
against the original bankruptcy ruling by the Central
Bankruptcy Court.  The last option for creditors is to join
Submicron in petitioning the bankruptcy court to lift the
original bankruptcy verdict.

Company executives and creditors agree that rehabilitation
of the firm is possible. If a joint petition to lift the
original verdict was made and accepted, it would open the
door for Submicron to enter business rehabilitation under
the bankruptcy code.

The first option, where creditors petition the department
to restructure debt, is likely to be the last option taken,
given the uncertainties for new investors and the
differences in protection given when compared with business
rehabilitation under the court.  In any case, operating
assets would be sold to new investors in a structure
similar to that taken in the case of Alphatec Electronics.

"Bank of America has completed negotiations with two new
foreign investors, both wafer fabrication firms" one source
said. "Both are ready to invest in new plants, and are now
deciding on the location."

Investor interest in Submicron was relatively strong, the
executive said, given that much of the infrastructure work
is completed. SCB filed a bankruptcy suit against Submicron
last year. Central Bankruptcy Court ruled against the firm
and Mr Charn in January. (Business Day  05-Jun-2000)


S U B S C R I P T I O N  I N F O R M A T I O N

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