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/raid1/www/Hosts/bankrupt/TCRAP_Public/000711.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, July 11, 2000, Vol. 3, No. 133 Headlines * A U S T R A L I A * 131 SHOP: Trying to consolidate to stem financial woes CINEMA PLUS GROUP: Administrator recommends restructure NORMANDY MINING LTD: Shaping up for takeover * C H I N A & H O N G K O N G * CHESTER IMPORT & EXPORT CO.LTD: Facing winding up petition HENRY METAL WORKS LTD: Facing winding up petition HUTTERBIRDS METALS LTD: Facing winding up petition KWONG SUN OFFICE SUPPLIES CO.: Facing winding up petition NEXT MEDIA: Posts narrower annual loss OS INT'L (HK) LTD: Facing winding up petition SOON CHEONG INDUSTRIES LTD: Facing winding up petition TOP KEY ENGINEERING LTD: Facing winding up petition WERNER CLADDING SYSTEMS (ASIA): Facing winding up petition WING FUNG CONSTRUC.& ENGIN.: Facing winding up petition * J A P A N * IKEDA BUSSAN: US auto-parts maker to take over * K O R E A * DAEWOO MOTOR: Ford begins due diligence HSD ENGINE: JV partners squabbling over capital boost SAMSUNG GROUP: Owner family under fire for stock deals * M A L A Y S I A * CHASE PERDANA BHD: Revises its debt restructuring terms PEMBINAAN YCS BHD: Set for revival with revamp scheme TELEKOM MALAYSIA BHD: Obtains offshore loan to re-fi debts * P H I L I P P I N E S * BW RESOURCES: New investors seen infusing P5B CANELAND SUGAR CORP.: SEC junks rehab plan EYCO GROUP: Creditors decry liquadation stop order MIMOSA LEISURE ESTATE: White knight offers rescue op URBAN BANK: 3 big firms okay equity conversion URBANCORP. INVESTMENT: SEC extends immunity from claims * S I N G A P O R E * DATACRAFT ASIA: Shares extend their losses DBS LAND: Accounting changes to push financials in the red EZYHEALTH ASIA PACIFIC: Losses expected for next two years * T H A I L A N D * JASMINE INTERNATIONAL: To restructure $140M debt JASMINE INT'L OVERSEAS CO.: Reports debt rehab pact to SET SIAM CITY BANK: Investors lining up THAI OIL: Sells subsidiaries to pay debts ================= A U S T R A L I A ================= 131 SHOP: Trying to consolidate to stem financial woes ------------------------------------------------------ Brisbane based dot.com company 131 Shop has announced efforts to reverse its failing fortunes, saying it has only enough money to pay its debts and continue operating for at least another three months. The shop has told the Australian Stock Exchange it is reviewing its business plan and will undertake any necessary restructuring. Executive director Trevor Gardiner admits that in the current marketplace 131 Shop's business model will not generate the revenues originally projected. Mr Gardiner adds 131 Shop has reduced its staff from 19 to four, is disposing of surplus computer equipment, reducing liabilities and is looking to raise additional working capital. The announcement comes after the 131 Shop recently renegotiated its sponsorship deal with the Brisbane Broncos and suffered the loss of former Federal Labor Minister, Gary Punch, who resigned from the chairman's position. (ABC News Online 10-July-2000) CINEMA PLUS GROUP: Administrator recommends restructure ------------------------------------------------------- In a juicy report, Administrator Ferrier Hodgson recommends giant-screen cinema company Cinema Plus Group be restructured via a deed of company arrangement so that the company can continue trading. That's good news for employees, for MTM Entertainment Trust and for IMAX, whose operations have been trading well in other parts of the world. The least attractive option, according to Ferrier Hodgson, is to liquidate the company. It doesn't seem that Cinema Plus' existing assets were a problem. Rather, it was that negotiations were entered into with IMAX in September 1998 for three new IMAX cinemas, in Perth, Buenos Aires and the Gold Coast, which required a large amount of capital that Cinema Plus didn't have. The administrator's report includes audit committee minutes from February 23, 1999, which raised an issue about whether the capital expenditures or projects needed to receive board approval. On June 4, 1999, Cinema Plus' lawyer confirmed that the agreements were binding and "at the latest, accepted by IMAX on January 11, 1999, when counterpart executive pages of the Projector Agreements as executed for IMAX were faxed back to Cinema Plus." The administrator said in its report that based "on its preliminary view, the company may not have secured the necessary financing to support the projector agreements." (Sydney Morning Herald 10-July-2000) NORMANDY MINING LTD: Shaping up for takeover -------------------------------------------- Normandy Mining Ltd is preparing to write down up to $400 million from its asset base as it tries to regain market recognition and prepares for a possible multibillion-dollar takeover battle. Shares in Australia's biggest gold miner jumped last week following speculation that foreign gold-mining giants, including the world's biggest, AngloGold, were circling Normandy and considering a hostile bid. But executive chairman Mr Robert Champion de Crespigny said he was not about to give up control of the group he founded without a fight. "People say I have lost interest - that couldn't be further from the truth," he told The Australian Financial Review in an interview. "I've never enjoyed it more. There's an enormous momentum. I formed the damn thing - it is my life." Mr de Crespigny would not comment on speculation that AngloGold would make an offer pitched around $1.30 a share, but admitted rationalisation in the global gold industry was a growing trend that Normandy couldn't avoid. North American groups Newmont Mining and Battle Mountain recently agreed to merge, and that was followed by South Africa's Gold Fields and Canada's Franco-Nevada Mining Corp joining forces. Market sources say Mr de Crespigny was keen to join Normandy with Gold Fields and Franco-Nevadabut could not strike an appropriate deal. "Like all people in my position, I reckon it's better not to comment on rumour," he said. But Mr de Crespigny does admit that his company is cheap because of what he considers misguided views in the market about Normandy's future and his role in it. And Australian resources companies in general were cheap because of the lack of investment support and the fall in the value of the Australian dollar. Normandy's shares were struggling around 82› before the AngloGold rumours pushed the stock higher. It closed on Friday at $1.05. "I know the mining companies have picked up on that - I'm not sure if the investment community has. With us, with our position in Australia [as the nation's largest gold producer], people would obviously think about us," he said. In Mr de Crespigny's case, with only a 3.5 per cent stake in the company, he is in some danger of losing control. The US-based Tiger Fund, with 14.5 per cent, is the largest shareholder and is considered a seller if the price is right. "Clearly at some stage they will sell. There's no doubt that the parcel is an overhung. I think we've suffered from that for a long time but that's life," he said. "We're very keen for our shares to trade at value. We have to be there on that international screen." The international gold mergers have occurred to help achieve sufficient size to attract investment from large international institutional investors. But even if all the world's major gold groups came together under one umbrella, the merged entity would only have a market capitalisation of about $60 billion - just twice the size of mining giant Rio Tinto. Market concerns about Normandy's corporate structure, debt levels and future ability to pay dividends, given a capital expenditure program of more than $600 million as it cranks up annual production to more than 3 million ounces from the 2.5 million it will achieve this year, means the company is struggling to find support even within Australia. Market perceptions that Normandy has a tendency to seek growth through complicated transactions rather than organically also complicate the picture. The expected $400 million writedown will come from the writedown of assets inherited from the purchase of Mr Joseph Gutnick's Great Central Mines and will reflect Normandy's more conservative accounting standards. Also, the writedown will mar an expected record net operating profit of between $125 million and $130 million for the June year. The group reported at $93 million operating profit for the first nine months. "Newcrest is our preferred choice because it's far more transparent and has a strong growth profile. Normandy is not even on our list," said BNP Paribas analyst Mr David Houghton. Mr de Crespigny acknowledges the company is out of favour but believes that a greater understanding could change that. "I'm always amused when people talk about growth. In 15 years, we are still the youngest gold company of any size in the world. In that time, we've gone from 16,000 ounces to 2.5 million ounces. The majority of those are what we have built ourselves," he said. "We've grown out of a mixture of exploration and acquisition and at the moment our exploration has had such a good period we can see ourselves getting up to very large production. Much larger than we've got now." He admits that the Great Central deal might have been complicated and perhaps Normandy might have paid too much for its initial stake. But if it had bid outright for Mr Gutnick's group, the acquisition cost would have been much greater. "Our in price on the whole thing was $1.70 to $1.75 and if we had bid at the time when we were competing with a couple of overseas companies, we would have paid $3.25 to $3.50," he said. "I would have loved to not have to have paid up that stuff we paid at $2.74. I accept people think we shouldn't do things in this complicated way but we bought it for nearly half the amount that we would have had we gone ahead and done a full takeover at that time." Mr de Crespigny does not see the debt assumed as an issue, saying that it was protected by the world's largest hedge book. "I wouldn't put it as high up as saying it is an issue. We know with the sale of industrial minerals and a number of other issues that it is under control. It is also underwritten by the hedge book," he said. "We'll certainly maintain our dividend. The pity about Normandy, if you take Normandy's share price and add on the dividend we pay each year and compare it to companies both in Australia and overseas, we've performed quite well. "Every year we take out 6› and give it to shareholders. Our competitors don't take out 6› - they take out nought to 2›. So if you went back and looked at the Normandy share price over three years and add on 18›, we're right up there with everyone else." Nevertheless, selling the story remains a tough task because of market perceptions. Much of that story will centre on the end result, the biggest restructuring the group has undertaken. The industrial minerals division is about to be sold for about $150 million. South Africa's Anglo American group, which once owned most of the assets, is being named as the most likely buyer. As well, Normandy's interest in the Queensland magnesium project builder Australian Magnesium Corp is being restructured. The result will be an in-specie distribution of Normandy's 62.5 per cent stake to Normandy shareholders, giving them direct exposure to a new and potentially high- yielding industry. "You know, we're going to be able to say we're a pure gold company. We do see tremendous returns in the industry," Mr de Crespigny said. "We've got an enormous cash flow coming out of this business - in the order of $1.5 billion over three years. That easily handles our capex. With the sale of assets and the surplus cash flow, that easily handles our debt position." The move to 100 per cent ownership of the Great Central Mines operations in Western Australia plus the development of the Perama Hill mine in Greece and Ghana's Yamfo Kenyase project should deliver Normandy nine projects with annual production of more than 300,000 ounces. In 1996, the group had just two mines producing above this rate. "Over the next two to three years, we get a substantial number of 300,000 ounces plus mines - that's the story we've got to get out into the market," Mr de Crespigny said. (Australian Financial Review 10-July-2000) ============================== C H I N A & H O N G K O N G ============================== CHESTER IMPORT & EXPORT CO.LTD: Facing winding up petition ---------------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance has scheduled a hearing for July 19 on the petition of Savvy Collection Limited for the winding up of Chester Import & Export Company Limited. A notice of legal appearance must be filed on or before July 18. HENRY METAL WORKS LTD: Facing winding up petition ------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance has scheduled a hearing for August 2 on the petition of Yau Lee Galvanized Factory Limited for the winding up of Henry Metal Works Limited. A notice of legal appearance must be filed on or before August 1. HUTTERBIRDS METALS LTD: Facing winding up petition -------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance has scheduled a hearing for August 9 on the petition of Fong Yuk Man for the winding up of Hutterbirds Metals Limited. A notice of legal appearance must be filed on or before August 8. KWONG SUN OFFICE SUPPLIES CO.: Facing winding up petition --------------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance has scheduled a hearing for September 6 on the petition of G & S Company (wholly owned by Gosplendid Limited) for the winding up of Kwong Sun Office Supplies Company Limited. A notice of legal appearance must be filed on or before September 5. NEXT MEDIA: Posts narrower annual loss -------------------------------------- Net losses at Next Media fell 60% to HK$78.47M for the year to March 31, compared with a HK$196.66M loss in the previous year. The loss per share was HK6 cents over the period. No dividend was recommended. Turnover dropped 9.39% to HK$217.17M. Next Media said it recorded a loss of HK$29.44M from the disposal of fixed assets in the year. Shares in Next Media rose 2 HK cents to finish at HK$1.25 after an intraday high of HK$1.36. OS INT'L (HK) LTD: Facing winding up petition --------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance has scheduled a hearing for August 30 on the petition of Liu Chun Hing for the winding up of OS International (Hong Kong) Limited. A notice of legal appearance must be filed on or before August 29. SOON CHEONG INDUSTRIES LTD: Facing winding up petition ------------------------------------------------------ The High Court of Hong Kong SAR, Court of First Instance has scheduled a hearing for August 9 on the petition of Apollo (Zhuhai) Electronics Company Limited for the winding up of Soon Cheong Industries Limited. A notice of legal appearance must be filed on or before August 8. TOP KEY ENGINEERING LTD: Facing winding up petition --------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance has scheduled a hearing for August 23 on the petition of Ching Hing Wah for the winding up of Top Key Engineering Limited. A notice of legal appearance must be filed on or before August 22. WERNER CLADDING SYSTEMS (ASIA): Facing winding up petition ---------------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance has scheduled a hearing for August 30 on the petition of Fu Wing Wa and Ng Kin Sun Valy, both trading under the name of Winson Engineering Survey Company for the winding up of Werner Cladding Systems (Asia) Limited. A notice of legal appearance must be filed on or before August 29. WING FUNG CONSTRUC.& ENGIN.: Facing winding up petition ------------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance has scheduled a hearing for August 9 on the petition of Yim Shek Kim for the winding up of Wing Fung Construction & Engineering Co. Limited. A notice of legal appearance must be filed on or before August 8. ========= J A P A N ========= IKEDA BUSSAN: US auto-parts maker to take over ---------------------------------------------- US auto-parts maker Johnson Controls said yesterday it would launch a bid to take over Japan's Ikeda Bussan, a major automobile seating maker affiliated with Nissan Motor. The major auto parts maker said in a statement it would pay 120 yen (US$1.1) per share to buy all of about 91 million shares in Ikeda Bussan from tomorrow to August 24 through its Japanese unit, Johnson Controls Holding. The takeover bid is expected to be completed by the end of September, the statement said. "Ikeda Bussan will become a vital part of a strong global automotive supplier," Johnson Controls chairman James Keyes said in the statement. Johnson Controls, ranked sixth in the world among auto parts makers, was expected to pay about 10.7 billion yen ($100 million) in cash for Ikeda Bussan, the statement said. It also plans to assume Ikeda Bussan's debts of about 9.1 billion yen. Johnson Controls and Ikeda Bussan have been partners since 1986 and operate two joint ventures which supply complete seats to Nissan units in the US and Britain. (Business Day 10-July-2000) ========= K O R E A ========= DAEWOO MOTOR: Ford begins due diligence --------------------------------------- Ford Motor, the priority negotiator in the sale of Daewoo Motor, Ssangyong Motor and Daewoo Motor Sale, will embark today on its close-up due diligence into the failed Daewoo Group's auto units. Unlike the pre-bidding due diligence, the upcoming inspection will likely focus on possible contingency debts hidden among Daewoo Motor's far-flung operations, including 35 overseas plants and sales companies, under Ford's bid to sharply slash the takeover price, say industry analysts. In the case which unknown debts are uncovered in the process of additional checkup, significant cuts from Ford's initial bid of 7.7 trillion won ($6.9 billion) would be inevitable, dealing a blow to Daewoo creditors, they note. Ford's secondary due diligence is scheduled to last six weeks until August 19. Notably, about 200 Ford officials, more than double the number in the previous due diligence, will inspect every detail of the three auto companies in a "simultaneous and multiple manner," sources said, adding that Daewoo's overseas plants will be inspected separately. "On the basis of Daewoo-presented data on finances (assets and debts), plants and resources, Ford inspectors will have a close look at plant facilities and hold interviews with plant staff and assembly-line workers," said a company source. Shortly after Ford's bidding price was revealed June 29, overseas commentators said the 7.7 trillion won seems too much to pay for Daewoo Motor reeling under an estimated 8.6 trillion won in debt. The combined assets of Daewoo Motor and Ssangyong Motor are valued at 11.8 trillion won, whereas Samsung Motors, valued at 5 trillion won, was sold for just 600 billion won. In addition, Renault took over Japan's Nissan for 680 billion yen (about 7.1 trillion won). But officials at the Daewoo Group Restructuring Committee in charge of the automaker's auction still remain optimistic, saying the final price will not deviate much from the 7.7 trillion won. "This due diligence is just meant to study the appropriateness of the initially offered price. And the creditors intend to complete negotiations by the end August," a committee official said. In case the final price is settled around the 7 trillion won, meanwhile, Ford may attempt to share the takeover costs, probably with its Japanese subsidiary Mazda and Hyundai Motor, some industry watchers forecast. "Ford is said to hold about $24 billion in cash reserves now," said a watcher. "But the U.S. carmaker is supposed to spend about $9 billion for the acquisition of a couple of European brands and another $10 billion for dividend payment and other purposes, reducing its financial resources in the Daewoo bidding." Therefore, Ford's formation of a joint consortium with Mazda, Hyundai or a third automaker cannot be ruled out, he speculated. Mazda has a history of capital tie-up with Kia Motors, a Hyundai Motor company. (Korea Herald 10-July- 2000) HSD ENGINE: JV partners squabbling over capital boost ----------------------------------------------------- HSD Engine, a new ship engine production company made from a joint venture between Korea Heavy Industries and Construction (HANJUNG), Samsung Heavy Industries and Daewoo Heavy Industries, is in trouble over capital increase six months after its launching. The Commerce, Industry and Energy Ministry said Saturday Samsung Heavy Industries filed a suit asking for an injunction to prevent HANJUNG from issuing new shares. Samsung is concerned HANJUNG, already the largest shareholder of the new company with a 51-percent stake, will gain all out control of the new firm. HANJUNG has filed a counter suit to persuade the court to deny Samsung's request. HSD Engine earlier this year tried to boost its capital from 5 billion won to 30 billion won (US$ 26.9 million) but was unable to do so because of the conflict between Samsung and HANJUNG. The ministry proposed increasing the number of directors to seven, including the president, with HANJUNG holding four seats, Samsung two, and Daewoo one, but both side rejected the plan. Samsung has asked for a public hiring of HSD Engine's president to ensure independence, while HANJUNG wanted to exercise its rights as a majority shareholder and select the president. (Asia Pulse 10-July-2000) SAMSUNG GROUP: Owner family under fire for stock deals ------------------------------------------------------ The Samsung Group's owner family is once again coming under fire for inappropriate stock deals meant to facilitate the group's father-to-son succession scheme. Lee Jae-yong, the only son of Samsung Chairman Lee Kun-hee, was yesterday found to have acquired a large stake in Samsung Investment Trust Management (SITM) through allegedly inappropriate stock deals, according to industry sources. SITM said Jae-yong has become its third largest shareholder with a 7.72 percent stake, following 46.5 percent of Samsung Investment Trust & Securities (SITS) and 18.9 percent of Samsung Securities. Considering that Samsung Life Insurance, of which Jae-yong is already the largest shareholder, has a controlling 45.37 percent stake in SITS, the Samsung chairman's son now has full control over all the group's financial affiliates. SITM and SITS, with customer deposits of 16 trillion won and 11 trillion won, respectively, have fallen under the control of the 32-year-old Jae-yong, who has no particular position within the group, said analysts. Acquisition of control over Samsung's mighty financial units will in turn accelerate the group's father-to-son succession scheme, they noted. But the Lee Kun-hee family is suspected of having committed many illegalities in the process of wealth transferral from father to son. In December 1996, Jae-yong became the largest shareholder in Everland Co. with a 31.9 percent stake through a suspicious convertible bond (CB) deal worth 9.6 billion won. In another controversial deal, Everland bought a 20.7 percent stake in Samsung Life Insurance at the per-share price of a mere 9,000 won in 1997, compared with the unlisted insurer's per-share value of over 300,000 won. Last year, Everland finally became the largest shareholder in Samsung Life, as Lee Kun-hee gave his 20 percent stake to creditors to compensate for his failed automobile investments. Critics say SITM behaved in an improper way to help Jae- yong purchase company shares from domestic banks. The company's management arranged the deals, making the banks believe they are selling their stocks to SITM. A bank official involved in the deal said he didn't know the SITM shares would go to Jae-yong. "SITM officials' behavior was inappropriate," said a critic. Even worse, the SITM shares were sold to Jae-yong at just 9,000 won per share, while Hyundai Investment Trust Management recently sold its shares to foreign investors at 20,000 won per share. Industry watchers say SITM is a far more healthy company than HITM. Critics also expressed deep concern over the second- generation chaebol owners' inroads into the financial industry, lamenting that Korea is the only country in the world where industrial capital owns financial capital. (Korea Herald 08-July-2000) =============== M A L A Y S I A =============== CHASE PERDANA BHD: Revises its debt restructuring terms ------------------------------------------------------- Chase Perdana Bhd announced that it had revised certain terms of its proposed debt restructuring involving debts amounting to RM352.76mil. It said in a statement that debts of RM231.57mil (inclusive of relevant outstanding interest accruing thereon up to March 31, 1999) would be repaid in cash while RM321,000 would involve the proposed issuance of 214,000 shares at an issue price of RM1.50 per share. Debts of RM51.07mil (inclusive of relevant outstanding interest accruing thereon up to March 31, 1999) would involve the proposed issuance of RM51.07mil nominal value of redeemable convertible secured loan stocks (RCSLS) in Chase Perdana. Another RM67.91mil (inclusive of relevant outstanding interest accruing thereon up to March 31, 1999) would involve the proposed issuance of RM67.91mil nominal value of irredeemable convertible unsecured loans stocks (Iculs) in Chase Perdana while RM1.89mil would be waived. Chase Perdana proposed to restructure its debts and that of its subsidiaries (inclusive of relevant outstanding interest accruing thereon up to March 31, 1999) via the following manner: --Debts of about RM71.71mil to the fully secured financiers to be repaid in cash. --To the partially secured financiers, about RM34.23mil would be repaid in cash, RM9.41mil would involve the proposed issuance of RM9.41mil nominal value of RCSLS and RM4.55mil would involve the proposed issuance of RM4.55mil nominal value of Iculs. --To the unsecured financiers, debts of about RM97.85mil would be repaid in cash, RM321,000 would involve the proposed issuance of 214,000 new Chase Perdana shares at RM1.50 per share, RM41.66mil would involve the proposed issuance of RM41.66mil nominal value of RCSLS and RM20.17mil would involve the proposed issuance of RM20.17mil nominal value of Iculs. --To essential creditors, debts of RM27.78mil would be repaid in cash while RM33mil would involve the proposed issuance of RM33mil nominal value of Iculs. --To trade and other creditors, RM10.18mil would involve the proposed issuance of RM10.18mil nominal value of Iculs and RM1.89mil waived. Following the revision, of the RM93.585mil proceeds from its proposed rights issue with warrants, RM22.527mil would be used to repay borrowings, RM27.78mil to repay essential creditors and RM38mil for phase two development of University Malaysia Sabah. (The Star Online 10-July-2000) PEMBINAAN YCS BHD: Set for revival with revamp scheme ----------------------------------------------------- Barely two years after being granted court protection from creditors, Pembinaan YCS Bhd is set for a revival with a restructuring scheme that sees the return of its original owners and injection of three property projects. MIDF Sisma Securities in its report has called for a long- term buy on the second board construction company, adding that two of the three property projects are already contributing to group profit in the current financial year. "The group is projected to return to the black this financial year ended June 30, 2000, with a profit before tax of RM13.1mil, from a loss of RM99.5mil in the previous year," the report said. Before its suspension, the company was trading at RM1.75, an 11% discount to its revised net asset value of RM1.98 per share. YCS has proposed to acquire Energy Park Sdn Bhd (EPSB) from Triple Glory Sdn Bhd through the issuance of 130 million YCS shares. This would result in a reverse takeover by the vendors of EPSB, who would end up with a 37% stake, while the injection of three property development projects into the company would enhance its profitability and cashflow. The vendors have pledged a profit guarantee of RM21.2mil, RM25.6mil and RM42.3mil for the financial years 2000, 2001 and 2002 respectively. As a revived property and construction group, the new management would concentrate on government-backed infrastructure projects (road and earth works) and medium cost residential properties mainly concentrated in the central and southern regions. So far, the management is confident of securing projects worth RM50mil to RM60mil which would be carried out in the next one-and-a-half years. The current debt level of the revived YCS has been reduced to RM172mil, including a bridging loan of RM42mil to finance the construction work for Rhythm Avenue in Subang Jaya. As such, the exercise has reduced its gearing level to a more manageable level of 1.6 times on the back of a positive assets base. The return of the original owners as a white knight reflects the creditors' confidence in their ability to turn around the company. (The Star 07-July- 2000) TELEKOM MALAYSIA BHD: Obtains offshore loan to re-fi debts ---------------------------------------------------------- Telekom Malaysia Bhd said it has signed recently an offshore term loan facility for up to US$350 million to be used to refinance its previous high-interest loans. "The facility has a two-tranche structure. with Tranche 1 being for an amount of US$200mil with a three-year bullet maturity, and Tranche 2 for an amount of US$150mil with a seven-year bullet maturity," it said in a statement. The facility was arranged by ABN AMRO Bank N.V., Labuan branch and The Fuji Bank, Limited (Labuan Branch) as the lead arrangers with 16 other international banks joining the transaction. The 16 participating banks were categorised into three groups--senior co-arrangers, co- arranger and lead manager. The senior co-arrangers are the Industrial Bank of Japan, Limited, Labuan Branch, The Bank of Tokyo Mitsubishi, Labuan Branch, Labuan Overseas Union Bank, The Sakura Bank Ltd, Labuan Branch, and The Sanwa Bank, Labuan Branch. Others are Standard Chartered Bank Offshore Labuan, the Tokai Bank Limited, Labuan Branch, and The International Commercial Bank of China, Labuan Branch. The co-arranger include Barclays Bank Plc, Labuan, The Dai-Chi Kangyo Bank Limited, Labuan Branch, Overseas-Chinese Bank Corporation Limited, Labuan Branch, Bank of America NT & SA, Labuan Branch, and Credit Industriel et Commercial, Labuan Branch. The lead managers of the facility are The Asahi Bank Limited, Labuan Branch, Bank Brussels Lambert A.A., Labuan Branch, and United World Chinese Commercial Bank, Labuan Branch. Representing Telekom at the loan's signing ceremony was its chief executive Dr Mohd Khir Abdul Rahman. He said that the transaction was a testimony of a solid standing of Telekom Malaysia in the international financial community and the confidence these banks have in the group. Country manager for ABN AMRO Bank, Malaysia, Theo J. Bark, said that the loan transaction between Telekom and the banks ranked among the largest post-Asian crisis deals to be closed, both in terms of size and the long tenure. "It also marks a clear shift towards a more positive outlook and continued commitment of banks for Telekom Malaysia, in particular, and Malaysia, in general," he said. He was optimistic that with Malaysia's economic recovery gathering momentum, and registering a strong 11.7% Gross Domestic Product (GDP) growth for the first quarter of 2000, the national utility company and the country would enjoy a stronger presence in the coming years. (Star Online 09-July-2000) ===================== P H I L I P P I N E S ===================== BW RESOURCES: New investors seen infusing P5B --------------------------------------------- Pentacapital Investment Corp., an investment house controlled by Jovencio Cinco, is optimistic it could plough up to P5 billion in new money into BW Resources Corp. with a drastic change in ownership and shifting investment gears to the trendy information technology. PentaCapital executive vice president Jose Revilla Reyes Jr. said PentaCapital made a firm underwriting commitment to raise fresh cash for BW Resources because it believed the firm remained fundamentally sound despite the price manipulation scandal involving its top officers and owners led by Dante Tan. "We realize that BW Resources' main problem is its image," said Reyes, "and we are planning to address this by getting new owners and management and broadening its thrust to include IT." Reyes said the majority owners were open to being diluted to pave the way for the entry of new investors. BW Resources' majority owners are Megaworld Properties and Holdings Inc. (70 percent) and individual investors led by Tan and Macau casino tycoon Stanley Ho (10 percent). Reyes said among its options to raise new money (between P3 billion and P5 billion) for BW Resources was a rights offering to be made this year. "Instead of issuing shares to get assets as the previous management has done, the new investors will operate strictly on a cash basis. The existing shareholders, including Tan, have agreed to step aside for the new group of local investors," Reyes said. PentaCapital was tapped by the BW Resources board as the financial adviser, issue manager and underwriter of the proposed offering. Reyes said the money would be used to complete the development of its key interests--the Sheraton Marina Hotel and Bingo Pilipino--and realize their potential. The fund would also be used to bankroll the firm's expansion into real estate, gaming, leisure and IT ventures. "Although our IT venture will initially be gaming-related, it does not preclude us from going into other fields," Reyes said. (Philippine Daily Inquirer 08-July-2000) CANELAND SUGAR CORP.: SEC junks rehab plan ------------------------------------------ The Securities and Exchange Commission (SEC) has junked the proposed rehabilitation plan of Caneland Sugar Corp., a subsidiary of Victorias Milling Corp. (VMC), and denied its request to extend the debt relief period. In its order, the SEC said it was not convinced that Caneland had any real chance of recovering because its proposed rehabilitation plan hinged largely on the infusion of a P50 million capital by its parent firm, VMC. However, VMC is also having its own financial problems. Three years after asking for debt relief, it has been unable to come up with an acceptable rehabilitation plan. It had one failed bidding and up to now cannot attract a strategic investor to immediately pump in P300 million into the firm. VMC had already assured the SEC thrice that it would pour P50 million into Caneland just as soon as its alternative rehabilitation plan is approved and successfully implemented. The money will be used for off-season repairs to ensure that Caneland will be operational at the start of the season. The SEC had earlier required Caneland to submit a written commitment from VMC, which owns 80 percent of Caneland, of its willingness to infuse working capital worth P50 million to repair the sugar central and make it ready for crop year 2000-2001. The SEC said however, that there are now two alternative rehabilitation plans submitted by VMC, one from the management committee or its receiver and another one from the company. Neither one has been approved. Caneland had asked for a suspension of debt payments up to July 15 this year to stop the Land Bank of the Philippines from foreclosing on it. (Philippine Star 08-July-2000) EYCO GROUP: Creditors decry liquadation stop order -------------------------------------------------- Creditors banks of the Eyco Group of Companies are questioning the temporary restraining order (TRO) issued by the Court of Appeals the other day, which effectively prevented banks from liquidating the group's assets. BusinessWorld learned the Eyco Group, which was declared "insolvent" and ordered liquidated by the Securities and Exchange Commission (SEC) in September last year, finally succeeded in obtaining a TRO from Division 8 of the Court of Appeals in Manila the other day. The order was issued despite a pending appeal on a similar matter in Division 2, which earlier dismissed the Eyco Group's petition for lack of merit, the sources said. The Eyco Group is represented by law firm Castillo & Poblador. "That is a clear case of forum shopping. Under the rules of court, you cannot do that," one of the sources said. The sources added the TRO was issued at around 3 p.m. the other day, after government offices closed at 1 p.m. due to the typhoon. The creditor banks, through legal counsel Cayetano Sebastian Dado & Cruz law firm have filed a motion to dismiss the petition for "lack of merit and forum shopping." "Because the second division would not issue a temporary restraining order to prevent the enforcement of the 14 September 1999 decision, petitioners... are now seeking from another division (a TRO)... which they could not secure from the second division, thereby plainly ignoring... the fact that the second division had already acquired jurisdiction over all incidents arising from the 14 September 199 decision," the creditor banks' petition stated. The banks further described the act as "division-shopping" and "a reprehensible manipulation of court processes to obtain a favorable order from a sympathetic division." Under settled jurisprudence, forum shopping constitutes direct contempt of court and is penalized by the summary dismissal of the petition filed by the offending party, they added. The Eyco Group's debts to a consortium of 28 creditor banks and financial institutions have ballooned to P5.2 billion from P2.08 billion in 1997, when the company sought debt relief from the SEC. The sources said the value of the properties put up by the Eyco Group as collateral to the loans sum up to only about P2.3 billion, while the free assets, or the assets not mortgaged to banks, are worth between P1.2 billion and P1.5 billion. Of the creditors, only a few are holding collateral. Among the secured creditors are Philippine National Bank (PNB), Far East Bank and Trust Co. (FEBTC), Allied Banking Corp., Traders Royal Bank (TRB) and Westmont Bank, now UOB Philippines Inc. The SEC appointed a liquidator, lawyer Edgardo Tarriela, only last month. The Eyco Group is composed of Nikon Industrial Corp., Nikolite Industrial Corp., 2000 Industrial Corp., Trade Hope Industrial Corp., Thames Philippines, Inc., EYCO Properties, Inc., Nikon Land Corp., Clarion Printing House, Inc., Integral Steel Corp. and First Unibrands Food Corp. The family-controlled Eyco Group's core business is manufacturing appliances such as electric fans. The group is also engaged in liquefied petroleum gas (LPG) gas cylinders manufacturing, snack foods, real estate investments and printing services. Other creditor banks are Rizal Commercial Banking Corp., Bank of Commerce, Equitable PCI Bank, Development Bank of the Philippines, Union Bank of the Philippines, Solidbank Corp., Land Bank of the Philippines, Metropolitan Bank and Trust Co. and Bank of the Philippine Islands. (Business World 07-July-2000) MIMOSA LEISURE ESTATE: White knight offers rescue op ---------------------------------------------------- The businss group of businessman Antonio "Tonyboy" Cojuangco has offered to infuse at least P400 million in fresh capital into Mimosa Leisure Estate and take over its operations. The cash infusion forms part of the rehabilitation plan proposed by the Cojuangco group for Mimosa. For its part, Mondragon International Philippines Inc., the listed company that operates Mimosa under a lease agreement with Clark Development Corp., is still trying to raise funds to cover its obligations with the government. The market was rife with talks that Cojuangco's group would be chosen by the CDC to take over and operate Mimosa. However, sources from the Cojuangco group said that CDC was still evaluating the rehabilitation proposal submitted by the group. They said the group was still ironing out some concerns with the CDC's own rehabilitation plan. The sources said the Cojuangco-led consortium was serious in its bid to take over the leisure estate. Aside from putting up a minimum seed money of P400 million to upgrade the facilities of the estate, the sources said the group was also willing to address issues related to Mimosa's debts. MIPI owes about 20 banks some P5.5 billion in principal. The creditor-banks include Asianbank Corp., Far East Bank and Trust Co. and United Coconut Planters Bank. Of MIPI's debts, around P3 billion was backed by collateral. The sources said the Cojuangco group was willing to assume the secured liabilities. Also, MIPI owes the government over P400 million in taxes and back rentals. CDC shut down the Mimosa casino last year for refusing to pay these obligations. However, the CDC and MIPI recently forged a compromise agreement on the payment of the dues. Other sources said the investment house representing the consortium, Bank of Commerce Investment Corp., was still trying to reconcile the proposal submitted by the Cojuangco group with the CDC's terms. "There is a disparity between the minimum guaranteed rental proposed by the group and the rate set by the CDC. They also are still finalizing the profit-sharing terms," a source said. The Cojuangco-led consortium is proposing the upgrading of the Mimosa facilities to attract more customers. Its rehabilitation proposal calls for the remodeling of the villas at the Mimosa Leisure Estate and the construction of an Olympic-size swimming pool. The group aims to change the image of Mimosa from being a casino center into a prime tourist destination. (Philippine Daily Inquirer 07-July- 2000) URBAN BANK: 3 big firms okay equity conversion ---------------------------------------------- Beleaguered Urban Bank's three major depositors -- Petron Corp., Manila Electric Co. (Meralco) and San Miguel Corp. (SMC) -- have agreed to convert their combined 750-million- Philippine peso (PhP) (US$17.18 million at PhP43.646:US$1) deposit in the bank into equity, Bank of Commerce (Bancommerce) president Raul B. De Mesa said. Bancommerce, which is controlled by the Cojuangco family, is one of two banks bidding for closed Urban Bank. The conversion of the three firms' deposits to equity as proposed by Bancommerce is expected to hasten the rehabilitation of Urban Bank. "They have agreed," Mr. De Mesa said. Under Bancommerce's rehab plan, the three firms will become shareholders of Bancommerce once it absorbs Urban Bank. Bancommerce is also proposing to infuse P1.65 billion in fresh equity to Urban Bank and has asked state pension fund Social Security System (SSS) to convert their 600-million- peso ($13.75 million) investment into equity. SSS has already agreed in principle but has yet to sign a formal agreement. Bancommerce recently increased its capital to PhP3.5 billion ($80.19 million). Aside from Urban Bank, it is also in the process of merging with the Benedictos' Traders Royal Bank (TRB). Bancommerce is also in talks with the Tan Yus' Panasia Banking Corp. for a possible acquisition. "While our investment in Urban Bank will be only PhP1.65 billion ($37.8 million), our whole equity will be put at risk since the bank will be consolidated with Bank of Commerce," Mr. De Mesa explained. Also, the central bank's policy-setting Monetary Board (MB) will finally decide on proposals to rehabilitate Urban Bank as the Philippine Deposit Insurance Corp. (PDIC) is scheduled to present to the board today its recommendations. PDIC president Norberto C. Nazareno said the state deposit insurer will make its final presentation after the meeting was postponed last June 30. "We will make our presentation this Thursday morning and in the afternoon, we will know which proposal the MB will choose for Urban," he told BusinessWorld. The PDIC earlier planned to reopen the bank at the end of last month but was unable to do so since it had to meet again with the interested investors to renegotiate the terms of their rehabilitation proposals, particularly the increase in equity infusion and shorter pay-out periods for depositors and creditors. Mr. Nazareno, however, said the PDIC plans to reopen the bank before July 26, the end of the 90-day receivership period mandated by law to reopen any closed bank. The PDIC chief said he hopes all of Urban Bank's creditors will agree to the details of the proposal that will be approved by the MB since any disagreement would further stall the bank's reopening. "I hope whoever wins will get the approval of the depositors and creditors of the bank," he said. He added after the MB gives its go ahead, the PDIC will have to sign some agreements with the chosen buyer, then make a presentation to the creditors and depositors. (Business World 06-July-2000) URBANCORP. INVESTMENT: SEC extends immunity from claims ------------------------------------------------------- The Securities and Exchange Commission has extended for another 60 days (or until Sept. 7) the debt payments reprieve for Urbancorp Investments to keep creditors at bay while the corporate watchdog deliberates on the investment house's rehabilitation plan. The extension was in response to the request made by Urbancorp Investments, a subsidiary of the debt-ridden Urban Bank, to prevent its creditors from pressing claims or instituting foreclosure proceedings against its assets pending the decision of the SEC on the rehabilitation plan prepared by the Bank Of Commerce. Urbancorp Investments secured a 60-day debt payments reprieve on May 9 after having complied with the requirements for companies filing a loan payments suspension petition with the SEC due to liquidity problems. An SEC official, who requested not to be named, however, expressed confidence that the rehabilitation plan submitted by BoC for Urbancorp Investments and Urban Bank would be approved by the Commission since it is not being opposed by majority of their creditors and already has the support of the Philippine Deposit Insurance Corp., the government- appointed receiver for Urban Bank. BoC, the banking arm of businessman Antonio "Tonyboy" Cojuangco, is among the only two companies that had signified interest to absorb Urban Bank as part of its strategy to shore up its presence in the highly competitive banking industry. "There had been no strong objection from the creditors of the two firms. Actually, they were receptive to the plan and could not wait for it to be approved by the SEC," the same official said. "If this goes on smoothly, there's a big possibility that Urban Bank might reopen anytime soon. It's just a matter of discussing some minor issues with creditors, management and investors." (The Manila Times 10-July-2000) ================= S I N G A P O R E ================= DATACRAFT ASIA: Shares extend their losses ------------------------------------------ Shares of mainboard-listed Datacraft Asia extended their losses yesterday despite a company announcement that it had acquired a new business arm in New Zealand in a US$4 million (S$6.9 million) deal. Just two weeks ago, the network systems integrator's counter came under the scrutiny of the Singapore Exchange (SGX) after its shares were ramped up some 9 per cent in one session amidst heavy volume. In its reply, Datacraft told SGX it was unaware of "any specific reason for the sharp increase" in its share price but cited the market's warm reception to a recent share placement as a "possible factor." Yesterday, Datacraft shares shed 20 US cents, or 2.5 per cent, to close at US$7.70 -- it's lowest close in six weeks -- with some 1.2 million shares traded. The price erosion came on the back of a Datacraft announcement that its New Zealand-based unit had bought NZ-based National Communication Services (NCS) as part of the group's plan to grow its business and extend its capabilities in building network infrastructure "for the Internet age." The group said money raised from a share placement made last month will be used to fund the purchase. A company announcement said the purchase of NCS ties in with its "aggressive global growth strategy designed to strengthen its position as the leader in building network infrastructure." Mark McHugh, managing director of Datacraft New Zealand, said: "Many organisations are using their network to handle business transactions, be it B2B (business-to-business) or e-commerce. They need a partner that can design, build and manage an end-to-end solution. He noted that with NCS now under the group's stable, Datacraft has expanded its capability to give end-to-end network services to customers who want a one-stop solution from "the region's most trusted systems integrator." NCS was formerly the cabling services arm of Telecom New Zealand. (Business Times 11-July-2000) DBS LAND: Accounting changes to push financials in the red ---------------------------------------------------------- DBS Land yesterday announced several accounting changes that would push its interim bottomline into the red and reclassify billions of dollars on the balance sheets of other listed companies should they follow suit. DBS Land said yesterday that it will book its redeemable convertible cumulative preference shares (RCCPS) as debt instead of equity; and put back into its balance sheets three office buildings divested via asset securitisation. The about-face on exclusion of the properties -- presumably 268 Orchard Rd, Robinson Point and 6 Battery Rd -- would enlarge its investment property portfolio by $1.2 billion, increase borrowings by $800 million and trim its investment in junior bonds by $400 million, with the treatment of the US$172 million (S$299 million) RCCPS as debt adding another $300 million to borrowings. The two moves will have a major impact on its debt-to- equity ratio -- a key financial ratio for property companies -- but will not affect its balance sheet in totality. A company spokeswoman said yesterday's announcement would have raised it from 0.5 as at end December 1999 to 0.82. DBS Land defines the ratio as total borrowings net of cash over shareholders' funds. In addition, the group is also changing the way it treats a fall in value of its investment properties and writing down $115 million relating to the fall in market value of its Parkway stake. he company said that "as a consequence of the changes in accounting policies, the group's results after extraordinary items for the 1H 2000 is likely to be negative." Giving the details for the change for securitised properties, DBS Land said latest international accounting standards, likely to be adopted in Singapore in the near future, will require these properties to be put back on the balance sheet. "Consequently, it has decided to do so in advance . . . " A partner in a consultancy said: "There is no problem for asset securitisations but you must study the structure. The test is whether the risks and the rewards that come with the asset have passed on to the new owner, or are still tied very much to the original owner." Said Tam Chee Chong, partner at Arthur Andersen: "Now that DBS Land has brought the properties back into the book, it would appear that the securitisation transactions were not meant to be sales but financing arrangement." Explaining its new treatment of the RCCPS, DBSL said that with the current price of its shares "being very much below the conversion price of $5.43 per share and the conversion option expiring in less than 18 months' time, the company has decided to reclassify the RCCPS as debt at June 30. This, it said, would cut NTA per share by 26 cents and raise debt by $300 million. As for its investment properties, DBSL said currently, surpluses on revaluations go into revaluation reserves in the balance sheet when the total market values of all the investment propertyes exceed total costs. On the other hand, deficits are taken to the P&L when total market value falls below total cost. It said: "As investment properties in different countries may be subject to different economic and political conditions as well as market risks, the company has decided to treat investment properties in each country as a separate class of investment. Consequently, any deficit on revaluation in a particular country will be taken to the P&L if the revaluation surpluses from other properties in the same country are insufficient to offset the deficits. "This policy is more prudent and closer to international accounting standards. The consequence of this policy is that writedowns will have to be made for the group's properties in certain countries such as Indonesia." Major asset securitisation deals in recent history include the NOL Building and Century Square by FCC. (Business Times 11-July-2000) EZYHEALTH ASIA PACIFIC: Losses expected for next two years ---------------------------------------------------------- Ezyhealth Asia Pacific Ltd expects to become profitable in two years, chief financial officer Tay Peng Huat said. Speaking at a news conference following the launch of the company's IPO, Tay said: "We expect losses for the next two years due to our plans for expansion into the region, but we hope to be profitable after that." In the first quarter to March, the group posted a net loss of S$1.595mil on sales of S$988,000. Tay said that although the losses were expected to grow initially, the company's net tangible assets per share would increase as a result of planned joint ventures and acquisitions. The company estimates net tangible assets per share will rise to 19 cents after the IPO from 14 cents currently. With a cash balance before the initial public offering of S$17.9mil and monthly operating expenses of approximately S$650,000 to S$750,000, Tay expects the company to be sustainable for the next two years. He added that the company will see a drain on cash the next six months as it expands its regional operations in South Korea, Hong Kong, the Philippines and Indonesia. Incorporated in August 1999, Ezyhealth began by launching an online health directory and a website for doctors. It has since expanded to become an IT solutions provider for the healthcare industry. The company said that the bulk of future revenue is expected to come from the sale and maintenance of healthcare software. Its acquisitions include Corporation Computer Pte Ltd, a developer of healthcare software developer. In June, the company entered a joint venture with Solco, a South Korea-based manufacturer of surgical instruments. (Star Online 11-July-2000) =============== T H A I L A N D =============== JASMINE INTERNATIONAL: To restructure $140M debt ------------------------------------------------ Jasmine International, a leading Thai mobile phone company, is set to sign a US$140 million debt rescheduling agreement with its creditors on Friday July 14. The agreement will extend the repayment period for the debt to six yearly installments beginning December 2001 and continuing to December 2007, according to Rittichai Pituckrachai, Jasmine's deputy manager of accounting and finance in a press statement. Earlier on Friday, Jasmine International Overseas, a sister company under Jasmine, signed a separate debt agreement with 11 syndicated banks amounting to $60.58 million. Rittichai disclosed that the overall debts owed by Jasmine's holding company amount to $300 million, but the company's management is to bring only $140 million for debt rescheduling because the remaining debts were incurred because the company acts as a guarantor for some of its debtors. "These debtors have their own capabilities to pay their other debts," Rittichai said. Of the $140 million, Rittichai said, 70 percent is in US dollars and 30 percent in Thai baht. As for the sources of income to pay the rescheduled debt, he said the money will come from Jasmine affiliated companies, including Jasmine Submarine Telecommunications which earns over two billion baht annually. The Jasmine holding company is also expecting to gain revenues from its warrants convertible to ordinary shares, and its imminent recapitalization. Jasmine's debt rescheduling will not affect the company's future borrowing or investment, because under the restructuring agreement Jasmine will be allowed to increase capital to as much as five billion baht. (Business Day 10- July-2000) JASMINE INT'L OVERSEAS CO.: Reports debt rehab pact to SET ---------------------------------------------------------- Jasmine International Overseas Co. Ltd. PCL has informed the SET that on 7 June 2000 that it has signed a debt rescheduling agreement with 11 syndicated banks amounting US$ 60.575 million. Per the agreement, the creditors agreed to extend 3.5 repayment period from the signing of the restructured debt agreement with the final repayment on 31 December 2003. Scheduled Repayments: Installment Repayment Repayment Number Amount Date 1 US$ 8,375,000 31 December 2000 2 US$ 26,700,000 31 December 2001 3 US$ 24,200,000 31 December 2002 4 US$ 1,300,000 31 December 2003 JIOC has previously repaid US$ 19.4 million to the banks and it plans to use the US$ 9.37 million proceed from the sales of JT Mobiles which was sold in 1999 to repay for the debt due in 2000. At present, JIOC holds 100% shares in ACeS Regional Services Co., Ltd. (ARS), the sole national service provider of Asia Cellular Satellite System mobile phone in Thailand, and holds approximately 12% stakes in ACeS International, the operator of ACeS project. JIOC successfully launched Garuda satellite into the orbit and already completed its Thailand's gateway construction and installation of hardware and software since the beginning of the year. At present, ARS is in the period of system testing of gateway and ACeS's system with fixed line network, international network and GSM roaming network. Voice quality from system testing is regarded as excellent. The company is firmly confident in the project efficiency and readiness competing in mobile phone satellite service at inexpensive price due to lower investment cost. Price of ACeS's handset is set at approximately 40,000 baht and air time charge within 23 countries across Asia Pacific region will be less than US$ 1 per minute. Local call within Thailand will be 24 baht per minute. ACeS's project is ready for commercial launching within the 2000 year end. (Stock Exchange of Thailand 07-July-2000) SIAM CITY BANK: Investors lining up ----------------------------------- A civil servant pension fund manager has said the department is considering investing its abundant cash in Siam City Bank (SCIB). Among the investment projects it plans to undertake is the acquiring of a stake in the ailing SCIB - a nationalized bank which the government plans to sell to local investors - as well as purchasing high-rise buildings after successfully managing Abdul Rahim building on Rama 4 road. Supachai Pisitvanich, Finance Ministry permanent secretary in charge of pension funds, said with over 100 billion baht on hand and the Bank of Thailand's current low interest rate policy, keeping large sums in banks would not be a wise decision, citing the 2 percent interest offered to institutional depositors. "The pension fund's manager is looking for investment that will yield handsome returns for retired civil servants," said Pisit. "Investing in SCIB is possible, pending the Finance Ministry's final decision on what to do with the bank." Separately, local press reported over the weekend that telecom tycoon Thaksin Shinawatra, the founding shareholder of Shin Corporation, has expressed interest in acquiring SCIB. The report said Thaksin may appoint his close aid, Thanong Bidaya, president of SCIB after Thanong resigned as chief of Thai Military Bank last month. Other investors eyeing SCIB include the Crown Property Bureau and a group led by businessman Thamnoon Nirandorn. Thailand aims to sell SCIB to local investors this month, having considered US-based Newbridge Capital's bid for the bank too low. (Business Day 10-July-2000) THAI OIL: Sells subsidiaries to pay debts ----------------------------------------- Thai Oil announced it has secured US$70 million from the sale of two subsidiaries in order to help pay off debts, as required by the debt restructuring plan approved by bankruptcy courts. According to the debt plan, Thai Oil is required to sell off its non-core businesses to curb expenditure and simplify business operations. Chulchit Boonyakatu, Managing Director of Thai Oil, said the company had sold its 40 percent stake in Thai Carbon Products (TCP), one of two secondary businesses, to an existing shareholder - Tokai group - for $15 million, which he said was higher than expected. Among other requirements of the plan, Thai Oil is obliged to reduce its ownership of Thai Paraxylene (TPX), diluting its share from 62 percent to 17 percent, with the Petroleum Authority of Thailand's (PTT) share increasing to 34 percent. Meanwhile, Japan's Nippon Mitsubishi Oil agreed to boost its ownership from 38 percent to 39 percent and also pledged to bring in Japanese investors to buy a further 10 percent stake in TPX. "Cash from the sale will boost company cash flow and enable it to resume plant construction," said Chulchit. Because of the unavailability of funds, TPX ceased plant construction last year. As a part of PTT's stake increase, the firm agreed to pay $41 million for preferential shares which guarantee PTT the right to take profit before others should Thai Oil achieve net profit. As a result of the company's ownership reorganization, Chulchit said Thai Oil would gain $55 million from the deal. New stake holders are required to provide an additional $5 million to Thai Oil for use as an emergency fund. Two Thai Oil creditors, Industrial Finance Corporation of Thailand (IFCT) and Bank of Ayudhya, have also agreed to extend $80 million of credit to TPX, as well as stretching debt repayment terms from 10 to 12 years with a two year grace period attached. Next in Thai Oil's financial agenda is restructuring its Thai Lube Base $55 million debt as well as arranging for the sale of Thai Oil Power shares to new buyers. Chulchit said the current profit margin of $1.50 per barrel would likely continue into the next three to four years, adding that the rate is sufficient for Thai Oil to financially survive during the period. Thai Oil has the capacity to refine 220,000 barrels of crude oil daily. The Central Bankruptcy Court in May released Thai Oil from financial supervision because it had fulfilled the financial restructuring commitments as required by the court. (Business Day 10-July-2000) S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Asia Pacific is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Darryl Henning, Managing Editor, James Philip P. Jover and Cristina Pernites, Editors. Copyright 2000. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR -- Asia Pacific subscription rate is $575 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. *** End of Transmission ***