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     T R O U B L E D   C O M P A N Y   R E P O R T E R

                           A S I A   P A C I F I C

            Thursday, August 24, 2000, Vol. 3, No. 165

                                  Headlines


* A U S T R A L I A *

ECORP LTD: Posts another annual loss
KGRIND: Snags licensing deals to raise funds
MELBOURNE IT: Stock falls, forecast forboding
ST GEORGE BANK: Deep staff cuts ahead


* C H I N A  &  H O N G  K O N G *

FUNG SHING ENGINEERING (HK)LTD: Facing winding up petition
KANUMA KNITTERS LTD: Facing winding up petition
KINGSWAY PLASTIC FACTORY LTD: Facing winding up petition
STAR CRUISES: S'holders to vote on debt-relief share sale
WING LEE INT'L HLDGS: Posts wider annual net loss


* I N D O N E S I A *

PT BANK BALI: Projecting smaller annual loss
PT INDUSTRI PESAWAT TERBANG: To sign Rp944B debt settlement
PT MUSTIKA NIAGATAMA NUSANTARA: IBRA appeals ruling


* J A P A N *

CRAYFISH CO: Posts 1.8B yen pretax loss for Oct-Jun
HAZAMA CORP.: Asks banks for lower rates after debt waiver
HIKARI TSUSHIN: To take $515M loss on phone store closures
SOGO CO: Likely to close flagship store in Sept.
SOGO CO: Managers are investigated for illegalities


* K O R E A *

CHEIL JEDANG: FTC orders debt guarantee resolution
DONG AH GROUP: FTC orders debt guarantee resolution
HYUNDAI DEVELOPMENT CO.: FTC orders debt guarantee resolu.
HYUNDAI MOTORS: Creditors accept stake sale - for now
JINRO GROUP: FTC orders debt guarantee resolution
KOHAP GROUP: FTC orders debt guarantee resolution
SHINSEGAE GROUP: FTC orders debt guarantee resolution
SSANGYONG GROUP: FTC orders debt guarantee resolution
YEUNGNAM MERCHANT BANK: Nationalized, to reopen
YOUNGPOONG GROUP: FTC orders debt guarantee resolution


* M A L A Y S I A *

MBF CAPITAL: Shares drop 36% to a 17-month low


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

BENGUET CORP.: Posts P77.09-M net loss in Q2
NATIONAL STEEL CORP.: Liquidation threatened
PHILIPPINE NAT. BANK: Posts 1H loss, forecast dampened


* T H A I L A N D *

BAN CHAN GROUP: Court action fended off - for now
KIATNAKIN FINANCE: Says Bt20B in debts not recoverable
PHILLIP SECURITIES: SET suspends officer for hiding losses
SIAM CEMENT: Plans bond issue to reduce debt
SIAM CITY BANK: Thailand scraps sale -- bids too low
SINO-THAI ENGIN. & CONSTR.: Creditors okay rehab plan
THAI PETROCHEM.INDUS.: Planners seek more time to file plan


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

ECORP LTD: Posts another annual loss
------------------------------------
ecorp Ltd has recorded a loss of A$28.27 million or A$0.04
a share, for the year ended June 30. That was slightly
higher that the loss of A$24.20 million or A$0.36 a share
for the same period a year earlier.

KGRIND: Snags licensing deals to raise funds
--------------------------------------------
Cash-strapped technology business Kgrind has finally struck
a deal to use its remaining technology assets, licensing
its Internet publishing software to telecom and Internet
group New Tel.

As well as licensing its multi-platform publishing
software, Kgrind will also provide design and consulting
services to New Tel, which is attempting to establish an
Internet access business in China. In a separate deal,
Kgrind will license its publishing software and its virtual
entertainment system software to Asian broadband Internet
access provider Quadtel.

The software system enables content to be delivered across
multiple platforms including broadband, narrow-band, WAP
and Palm Pilots.  Kgrind expects to generate fee revenue
from both deals. (Sydney Morning Herald  23-Aug-2000)

MELBOURNE IT: Stock falls, forecast forboding
---------------------------------------------
Shares in Internet domain name registrar MelbourneIT were
savaged yesterday, falling 31 per cent to a new low of
$5.99 after the company revealed that registrations of
generic top level domain (gTLD) names - its main money-
spinner - will fall sharply in the second half.

After shares in the company traded as high as $17 in March,
some analysts now value them at only $3 as its business
slows and margins contract. Although its Internet Names
WorldWide division had performed strongly in the June half,
registering more than 800,000 gTLDs, pricing pressures
would see margins sliced in the coming quarters.

On top of significantly slimmer margins, MelbourneIT said
volume in gTLD registrations was expected to decline.
Internet Names WorldWide is licensed by the Internet
Corporation for Assigned Names and Numbers (ICANN) to sell
the tags .com, .net and .org to businesses and other
groups.

Domain name registrations grew 25 per cent quarter on
quarter last year, slumping to only a 12 per cent rise from
the first to second quarter this year.

"More recent trends suggest a flattening will occur in the
third quarter," chief executive Professor Peter Gerrand
said. "We're noticing, and we're hearing from our channel
partners and the industry, that there does seem to be a
flattening off of the total .com, .net and .org
[registrations], so we expect that to affect our EBIT
contribution and hence our yearly results."

In the first half MelbourneIT reported earnings before
interest and tax of $3 million and a net profit of $2.2
million on revenue of $23.1 million, $900,000 shy of the
full-year forecast of $24 million.  While Professor Gerrand
said it was "too early to say" what would happen with gTLD
registrations in the final quarter, the company was hopeful
of meeting its EBIT (earnings before interest and tax)
prospectus forecast of $4.7 million.

This could be achieved only through "tight cost control and
targeted sales and marketing."  Shares in the company were
dumped, as investors had expecting an EBIT figure of $13
million for the full year, sales of around $60 million and
a net profit of $3.5 million to $4 million for the half.

"So some significant double digit downgrading is expected,"
said one analyst. Another said the gTLD registrations were
expected to be "quite weak" over the next three quarters.
Technology analyst with BNP Paribas Mr Kyle Preston said
yesterday's result was "a disappointment", based on market
expectations. He cast doubt on MelbourneIT's ability to
broaden its revenue base by, for example, selling e-
commerce products. (Sydney Morning Herald  23-Aug-2000)

ST GEORGE BANK: Deep staff cuts ahead
-------------------------------------
The St George Bank board is expected to sign off today on a
"redesign", which is expected to involve deep staff cuts,
aimed at bolstering the bank's performance before its
restrictive articles of association expire in July 2002.

Managing director Mr Ed O'Neal will announce to staff - via
a Sky Channel broadcast - on Friday at 7.30am the extent of
the cuts, which are likely to be confined to the back and
head offices. The overhaul is not expected to involve
substantial branch closures.

Staff also have been unnerved by several high-level
departures in recent weeks following a long-running
internal review by US management consultancy Aston
Associates. According to one source, "rumours had been
flying thick and fast," particularly in relation to BankSA,
which may feel the brunt of the restructure.

But St George has set aside just one hour to explain the
changes to stockbroking analysts on Friday, suggesting the
restructure may not be as significant as first thought.
Even so, analysts say Mr O'Neal is under intense pressure
to restore the bank's fortunes.

They have to do "something because they have been so
disappointing both on the volume and the cost side", one
said. The overhaul, billed as an "infrastructure redesign
and implementation plan", is seen as an attempt to improve
St George's performance, so it is better able to defend
itself against any takeover bid once its 10 per cent
shareholder limitation expires in 2002.

Both ANZ and National Australia Bank have built stakes to
signal their interest, though their priorities may change
if the Federal Government rescinds its four pillars policy
preventing mergers between the big four banks. St George
has asked staff for "expressions of interest" in
retrenchment but has said the redundancies will not be
voluntary. (Sydney Morning Herald  23-Aug-2000)


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

FUNG SHING ENGINEERING (HK)LTD: Facing winding up petition
----------------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on October 25 on the petition of
Cheung Nuen for the winding up of Fung Shing Engineering
(Hong Kong) Limited. A notice of legal appearance must be
filed on or before October 24.

KANUMA KNITTERS LTD: Facing winding up petition
-----------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on October 11 on the petition of
Wong Chi Keung for the winding up of Kanuma Knitters
Limited. A notice of legal appearance must be filed on or
before October 10.

KINGSWAY PLASTIC FACTORY LTD: Facing winding up petition
--------------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on September 27 on the petition of
Ng Ying Ying for the winding up of Kingsway Plastic Factory
Limited. A notice of legal appearance must be filed on or
before September 26.

STAR CRUISES: S'holders to vote on debt-relief share sale
---------------------------------------------------------
Star Cruises Plc's is asking shareholders to approve the
holiday cruise operator's plan to sell new shares on Hong
Kong's stock exchange to reduce debt, according to a
circular sent to shareholders.

The company plans to raise as much as $800 million in the
share sale, the South China Morning Post said. The company
is seeking approval today in a shareholders' meeting to
sell as much as 300 million new shares, or 32 percent of
its enlarged share capital, the circular said.

Star Cruises plans to use the proceeds from the share sale
to lower its debt following a tussle in January with
Carnival Corp., the world's biggest cruise company for
control of Norway's NCL Holdings ASA. Star Cruises had to
borrow $600 million from 16 banks and another S$322 million
from shareholders to finance the takeover after Carnival
pulled out of the agreement.

Its second largest shareholder, Resorts World Bhd., has
already pledged to invest $490 million in the global
offering.  HSBC Holdings Plc and Credit Suisse First Boston
will manage the share sale.

Asia's dominant cruise operator has a primary listing on
the Luxembourg stock exchange and is traded over the
counter in Singapore. It will withdraw its listing from
Luxembourg once its starts trading in Hong Kong. (Bloomberg
23-Aug-2000)

WING LEE INT'L HLDGS: Posts wider annual net loss
-------------------------------------------------
Shipping company Wing Lee International Holdings reports
that its net loss had increased to $77 million, up 11.6
percent from last year's loss of $68.97 million. Operating
loss for the year ended March 31 decreased 22.5 percent to
$51.13M, however. Overall, turnover fell 26.1 percent to
$303.61 million, down from $411.1 million a year earlier.
Earnings per share fell 42.9 percent to 11.2 cents, down
from 19.6 cents the past year.  The board of directors has
not recommended payment of a final dividend.


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

PT BANK BALI: Projecting smaller annual loss
--------------------------------------------
Indonesia's troubled Bank Bali said on Tuesday it expected
a pre-tax loss this year of 1.14 trillion rupiah but could
start producing profits in 2001.

Its pretax loss last year was 2.06 trillion rupiah.
But it said in a statement it expected its capital adequacy
ratio to be positive at 12.81 percent after parliament
approved its recapitalisation late last month. The figure
last year was a negative 84.48 percent.  The government is
expected to issue bonds to help shoulder the
recapitalisation cost of the bank amounting to a total of
48.52 trillion rupiah.

The statement said the options for its planned 99-for-one
rights issue will be traded on September 20-26 with the
exercise period September 20-27.  However, the rights issue
still has to be approved by an extraordinary shareholder
meeting scheduled for August 28.

Early this month, the scandal-plagued bank said it planned
to issue up to 66.5 million new shares at 80.5 rupiah per
share where each share is entitled to buy 99 new shares to
collect 5.36 trillion rupiah.  The bank's shares are
currently trading at around 260 rupiah per share, unchanged
from their close on Monday.  (Financial Times, Reuters  22-
Aug-2000)

PT INDUSTRI PESAWAT TERBANG: To sign Rp944B debt settlement
-----------------------------------------------------------
Indonesian aircraft manufacturer PT Industri Pesawat
Terbang Nusantara (IPTN) expects to sign a memorandum of
understanding with the Indonesian Bank Restructuring Agency
(IBRA) on Monday in respect of its Rp944 billion ($110
million) debts.

"There is a possibility that an MoU for borrowing
settlement will be signed between IPTN and IBRA next Monday
(7 August)," says IPTN spokesman Soleh Affandi.

Originally, the funds, which came from the government
before the outbreak of the Asian financial crisis, were
treated as a grant, albeit one channeled via Bank Bumi Daya
(now Bank Mandiri). They were only reclassified as a loan
after the crisis broke. IPTN in its June newsletter said it
was pushing for a debt-for-equity swap.

This could prove controversial. IPTN is already owned by
the Indonesian government, which, under the terms of a 1998
agreement with the International Monetary Fund, is barred
from giving more money to IPTN. The cash-strapped company
has, since 1998, cut its workforce from around 16,000 to
just over 10,000 and was forced to put on hold the
development of its N-250 70-seat commuter aircraft and N-
2130 130-seat jet airliner.

The N-250, the first aircraft to be wholly designed by
IPTN, first took to the skies in 1995 but has still to be
certified. IPTN is in talks with a potential investor from
China in an effort to raise the $90 million required to get
the N-250 certified and will require another $810 million
to get production underway.

The N-2130 was originally scheduled for delivery in 2004,
though this has subsequently been pushed back. The
aircraft's development team is headed by Ilham Akbar
Habibie, son of former Indonesian President Bacharuddin
Jusuf Habibie. BJ Habibie founded IPTN in 1976 and was
previously chairman of the aircraft maker.

Both father and son spent time studying aeronautical
engineering in Germany and Ilham Habibie has also worked at
Boeing for three years. IPTN's existing revenues come from
production of the CN-235, a jointly-developed transport
aircraft, the production under licence of other aircraft
and helicopters as well as providing certain parts for
other aircaft manufacturers, including Boeing and Airbus.
(Finance Asia  23-Aug-2000)

PT MUSTIKA NIAGATAMA NUSANTARA: IBRA appeals ruling
---------------------------------------------------
The Indonesian Bank Restructuring Agency (IBRA) has filed
an appeal with the Supreme Court against the bankruptcy
ruling on Ongko Group unit PT Mustika Niagatama Nusantara,
IBRA lawyer Benny Azani Latief said.

The move comes in the wake of the Jakarta Commercial
Court's ruling granting the company a 45-day suspension of
debt payments to give it more time to negotiate debt
restructuring terms with all of its creditors, Latief
added.

"Our appeal is based on the argument that the commercial
court has misapplied the existing bankruptcy law," he said.

He said the commercial court should have not accepted the
debt payment suspension request because it was submitted
after the court's evidence presentation session was done.
"The request came too late," he said.

IBRA said the company has total matured debts of 82 bln
rupiah.  (AFX News Limited  23-Aug-2000)


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

CRAYFISH CO: Posts 1.8B yen pretax loss for Oct-Jun
---------------------------------------------------
Japan's Crayfish Co. recorded a parent pretax loss of 1.82
billion yen for the period between October 1999 and June
2000.

By comparison, the company posted a 144 million yen loss in
the same period a year earlier.  For the first nine months
of the current fiscal year through September, revenue
jumped 780 percent to 4.65 billion yen - in line with rapid
growth of users for its main "Hitmail" e-mail hosting
services for small- and mid-sized enterprises.

Despite the robust growth in revenue, Crayfish continued to
post losses due to large expenses in the fields of research
and development and customer base exploration, it said.
The company posted a parent net loss of 1.83 billion yen
for the nine months, compared with a year earlier loss of
146 million yen. Its operating loss widened to 1.16 billion
yen for the period, up from 134 million yen a year earlier.

For the April-June period, the third quarter of this fiscal
year, Crayfish reported a parent pretax loss of 114.39
million yen, compared with a year earlier loss of 66.81
million yen. Its operating loss increased to 122.14 million
yen for the quarter, up from 66.10 million yen a year ago.
Revenues were 2.20 billion yen, up 654 percent on the year.

As for its management priorities in and after the fourth
quarter, Crayfish said it will make utmost efforts to
maintain existing customers, increase the number of its new
clients by expanding sales channels and strengthen research
and development. The number of "Hitmail" users at the end
of June grew 11.0% from three months earlier to 69,444.

However, during the three-month period, the number of the
newly-acquired clients fell and the number of user
cancellations rose, compared to the previous three months,
it said.  Crayfish said the trend of declining new
customers and increasing cancellations was partly
attributable to its largest shareholder Hikari Tsushin
Inc.'s (J.HKR or 9435) restructuring moves and worsened
corporate image.

Separately, Crayfish said Tuesday the number of its service
users at the end of July slipped 3.5% from the end of June
to 66,987 due to a drop in newly-acquired customers.
Crayfish is listed on the U.S. Nasdaq and the Tokyo Stock
Exchange's Mothers market. (Dow Jones  23-Aug-2000)

HAZAMA CORP.: Asks banks for lower rates after debt waiver
----------------------------------------------------------
With four banks ready to agree to waive 105 billion yen in
debt, Hazama Corp. has asked its lenders to apply
preferential interest rates and other favorable concessions
on its remaining loans, according to a newspaper report.

The Nihon Keizai Shimbun says the requests revolve around
the contractor's main banks, Dai-Ichi Kangyo Bank and
Mitsubishi Trust & Banking Corp. Low-rate financing 50
basis points above the prevailing Tokyo interbank offered
rate (TIBOR) (which is now 0.39%) is what is being sought.

Hazama is asking for debt waivers of some 50 billion yen
from DKB, about 35 billion yen from Mitsubishi Trust,
roughly 15 billion yen from Shinsei Bank and around 5
billion yen from Nippon Credit Bank. Shinsei Bank, formerly
Long-Term Credit Bank of Japan, is expected to soon reach
an agreement in which the remainder of its loans to Hazama
will be bought by DKB and Mitsubishi Trust.

An agreement with the four could come as early as this
fiscal half. The debt waivers and asset sales are expected
to trim Hazama's parent-only interest-bearing debt to about
210 billion yen by the fiscal year-end, a 39% drop from the
close of fiscal 1999.

In addition to the preferential rate it aims to receive
from DKB and Mitsubishi Trust, Hazama is asking that its
other 60 or so financial institutions charge it the prime
rate for the outstanding balance of its loans. Hazama also
is asking DKB and Mitsubishi Trust to maintain its balance
of debt and financing for necessary operating funds during
its revival plan, which will run through fiscal 2004.

The company is promising its other financial institutions
that over five years from fiscal 2000, it will repay 10% of
the balance of its unsecured loans at the end of every
March.  As a result, beginning in fiscal 2001, Hazama plans
to repay some 13.4 billion yen per year. (SuratkabarCom 23-
Aug-2000)

HIKARI TSUSHIN: To take $515M loss on phone store closures
----------------------------------------------------------
Hikari Tsushin Inc. reports it will book an extraordinary
loss of 56 billion yen (US$516.5 million) this fiscal year
ending Aug. 3.

The loss will be due primarily to the closure of 1,050
cellular phone stores in the four months through July. In a
statement, the firm says it believes the rapid launch of
such stores led to its earnings deteriorating. It now plans
to concentrate on profitability. Hikari Tsushin now has 796
stores - just 40 percent of what it had at its peak.

SOGO CO: Likely to close flagship store in Sept.
------------------------------------------------
According to a newspaper report, the financially troubled
department store operator Sogo Co. likely will close down
its Tokyo store in Yurakucho, Chiyoda Ward, at the end of
September.

Sogo started rehabilitation after filing for court
protection from creditors in July. Japan's largest
department store operator plans to formally announce the
closure of the flagship store this week and hold largest a
clearance sale starting Sept. 3, sources at Sogo said, as
reported in the Yomiuri Shimbun.

A number of companies, including major apparel retailer
World, have expressed an interest in opening retail outlets
in Yomiuri Hall, where the Sogo store is currently located.
The building is expected to be transformed into a
multistore commercial complex specializing primarily in
women's clothing. Some 200 full-time employees at the Tokyo
store would be transferred to nearby Sogo stores, the
company source said.

SOGO CO: Managers are investigated for illegalities
---------------------------------------------------
Alleged illegal financial activity by senior managers at
Sogo, the troubled Japanese department store group, is
being investigated by the group's special adviser.

"There have been internal accusations of illegalities
surrounding top management," said Shigeaki Wada, appointed
last month to try to rescue Sogo from bankruptcy.
"It is possible that embezzlement or other illegal
activities took place. We are looking into these matters
and will hold former management responsible for their
acts."

Sogo filed for court protection last month with debts of
Y1,870bn (E19.2bn), including loans worth some Y205bn held
by Long-Term Credit Bank of Japan, which collapsed in 1998
and was nationalised.  Mr Wada's comments have broad
economic and political implications, since the quality of
nationalised banks' loans is becoming an important issue in
the debate over both banking reform generally and the
involvement of foreign investors in this process.

The Sogo loans were included in the sale of LTCB, now
renamed Shinsei, to Ripplewood, the US private equity
group, last year.  But the Japanese government has had to
buy back the debt from Shinsei under a clause in the sale
contract allowing the bank to return most loans if they
lost more than 20 per cent of their value.

The government said it did not expect to have to buy back
the loans because at the time of the sale it did not
believe the Sogo loans were insecure.  However, some
Japanese bankers involved in the case now admit they knew
as early as 1997 that the retailer could not be saved. They
failed to act, they say, because they were worried that
pulling the plug on Sogo could have triggered the collapse
of the bank.

"It was feared that if the banks were asked to waive debt
or forced Sogo to file for court protection, it could have
triggered an even bigger financial crisis" because of the
impact on LTCB, one banker said. "We bought time - it was
only when LTCB collapsed that we were able to do something
about Sogo."

The revelations are likely to fuel concern about whether
other loans that Shinsei has inherited could turn bad. They
come at a critical moment, as the government plans next
week to sell Nippon Credit Bank, another nationalised bank,
to a consortium led by Softbank, the internet investment
group.

The government claims it has "cleaned up" NCB by removing
about Y4,000bn of bad assets. However, some government
officials suspect that a quarter of the remaining Y4,000bn
of assets on NCB's books could be problematic, even though
the Financial Reconstruction Commission, the body in charge
of banking reform, considers that they are of acceptable
quality for sale.

The commission yesterday denied that it had deliberately
misclassified any loans, but admitted that it had
classified the NCB loans under "extraordinary
circumstances" last year.  A law that took effect last year
stipulated that "even if a company is in danger of going
bankrupt, it will not be considered a problem loan if it
has a parent company guarantee or if there is a need to
consider public opinion," a commission official said.

This last definition is critical, because it could provide
a reason to avoid classifying any politically-sensitive
loans as "bad." (Financial Times  23-Aug-2000)


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

CHEIL JEDANG: FTC orders debt guarantee resolution
DONG AH GROUP: FTC orders debt guarantee resolution
HYUNDAI DEVELOPMENT CO.: FTC orders debt guarantee resolu.
JINRO GROUP: FTC orders debt guarantee resolution
KOHAP GROUP: FTC orders debt guarantee resolution
SHINSEGAE GROUP: FTC orders debt guarantee resolution
SSANGYONG GROUP: FTC orders debt guarantee resolution
YOUNGPOONG GROUP: FTC orders debt guarantee resolution
---------------------------------------------------------
Ten local business groups have been required to resolve by
March 2001 some 1.5 trln won in debt guarantees extended to
their subsidiaries, the Fair Trade Commission said.

Three of the 10 groups are newly-designated large business
groups, namely Hyundai Development Co, Shinsegae group and
Youngpoong group.  The FTC said by March 2001, Hyundai
Development Co should cancel 3.7 bln won of debt
guarantees, Shinsegae 181.1 bln and Youngpoong 59.3 bln.

Business groups currently under court receivership were
given a one-year extension to resolve their debt guarantees, the
FTC said. These include Dong Ah group with 506.6 bln won in
debt guarantees, Ssangyong with 178.2 bln, Kohap with 27.6
bln, Anam with 331.6 bln, and Jinro with 104.2 bln. The FTC
said Cheil Jedang has been required to cancel 48.6 bln won
in debt guarantees and Saehan 85.2 bln as they were
classified as large business groups after 1998.

Those defined as large business groups before 1998 have met
the requirement to cancel their inter-subsidiary debt
guarantees totalling 7.6 trln won by March 2000, it said.
They repaid 32.4 pct of the entire debt guarantee and
resolved 22 pct of the amount by presenting collateral as well as
individual guarantees from large shareholders, it said.

Some 22 pct of the debt guarantee was shouldered by the
borrowing subsidiaries which have good credit standing, it
said. The five largest business groups canceled 2.29 trln won of
inter-subsidiary debt guarantees, it said. Hyundai group
canceled 871.2 bln won of debt guarantees, Daewoo canceled
819.8 bln, Samsung 377.0 bln, LG 133.4 bln, and SK group
85.8 bln.

The FTC also said the allowable inter-subsidiary debt
guarantee has fallen to 5.8 trln won this year from 12.6
trln a year earlier, it said.  The commission noted that
the settlement of inter-subsidiary debt guarantees among
big business groups would "effectively prohibit reckless
business expansion and hierarchical management and reduce
the danger of chain-reaction bankruptcy."

It added that the government will seek systematic
improvements to encourage credit-based lending practices
rather than the  current practice of demanding collateral
and individual guarantees.  (AFX News Limited  23-Aug-2000)

HYUNDAI MOTORS: Creditors accept stake sale - for now
-----------------------------------------------------
Korean creditors decided to conditionally accept Hyundai's
plan to sell a 6.1-percent stake in Hyundai Motor (KSE:
05380) to foreign investors prior to separating the
automaker from the main group.

The shares are part of founder Chung Ju-yung's 9.1-percent
stake in the company. By law, group owners are not allowed
to hold more than a 3-percent stake in former affiliates
once they are spun off.  Should the sale not materialize
within this week, however, creditors will acquire the stake
as planned for resale within this year.

Hyundai plans to officially submit its spin-off proposal to
the Fair Trade Commission this weekend at the earliest
after presenting the sale plan to the FTC and creditors
around Tuesday.  A Hyundai source said that dozens of
investment institutions have shown interest in acquiring
the shares, and that buyers canbe finalized "by today."

"The list of buyers and other related documents will be
passed to the FTC and creditors by tomorrow," he said.
"The sale plan will be examined in advance by the FTC and
other related official agencies, and there is no suspicion
at all about any intention of delaying the spin-off of the
motor unit."   (World News Connection  21-Aug-2000)

YEUNGNAM MERCHANT BANK: Nationalized, to reopen
-----------------------------------------------
Yeungnam Merchant Bank, now in business suspension due to
insolvency, will resume operations this week as a state
bank.

In May, the Financial Supervisory Commission ordered the
insolvent merchant bank to suspend business for three
months and come up with a plan to increase capital. It was
unable to raise capital on its own, however, so it received
an injection of public funds.

The Korea Deposit Insurance Corp. put 171.7 billion won
into the merchant bank and now claims a 100 percent stake
in the bank. The public funds injection was in compliance
with the government's policy on no longer liquidating
financial institutions.


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

MBF CAPITAL: Shares drop 36% to a 17-month low
----------------------------------------------
Shares of financially-troubled MBf Capital Bhd were savaged
yesterday on fears that the company might undertake a
substantial capital reduction exercise as part of its
restructuring plan.

Sources told Star Business that the MBf Capital management
had met with the merchant bankers on Monday to discuss the
company's restructuring scheme.  According to the sources,
the restructuring exercise would, among other things,
involve a substantial capital reduction to be followed by
an injection of fresh revenue-earning assets.

The share price of MBf Capital plunged 22 sen or 36% to a
17-month low of 38.5sen yesterday, with 8 million shares
traded. The stock was the most actively traded of the day.
According to investment advisory firm Surf88, the MBf
Capital shareholder fund deficit amounts to RM1.5bil, which
is the largest among the listed companies on the KLSE.

The MBf Capital group had reported a pre-tax loss of
RM286mil for the financial year ended December 1999.
Last year, Danamodal Nasional Bhd moved to take a 78%
controling stake in MBf Finance Bhd following a RM1.6bil
capital injection into the nation's largest finance
company, leaving MBf Capital with a reduced stake of 22% in
the finance company.

As part of the financial sector consolidation exercise, MBf
Finance is expected to be merged with Multi-Purpose Bank
Bhd.  Investors' worries about "big haircuts'' also spilled
over to construction firm Intria Bhd, whose share price
fell 14 sen or 14% to 89 sen yesterday. It was the second
most active counter after MBf Capital, with 5.12 million
shares traded.

A dealer said that talk of a capital reduction at MBf
Capital had further dampened the lacklustre market
sentiment, especially after Idris Hydraulic Bhd's announced
plan to consolidate its shares in the ratio of 20 to 1.
The dealer said investors were bailing out on fears that
the value of their shares would continue to shrink.

However, HLG Securities research head Yee Yang Chien said
investors should not generalise about companies that were
undergoing restructuring exercises.  "Investors should pay
attention to the companies' balance sheets and take a look
at their shareholders' funds and ability to repay their
borrowings. They should not just punish all firms that are
involved in restructuring activities--that is unfair," he
said.

Yee cited the example of Intria in which United Engineers
(M) Bhd (UEM) has taken a 45% stake. Intria's shareholders'
funds were not in deficit and the company was able to repay
its loans. (Star Online  23-Aug-2000)


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

BENGUET CORP.: Posts P77.09-M net loss in Q2
--------------------------------------------
Mining firm Benguet Corporation (BC) said Tuesday its
consolidated net loss rose to P77.09 million in the second
quarter, from P50.01 million during the same period last
year due to the peso's weakness.

In a statement to the Philippine Stock Exchange (PSE),
Benguet said the depreciating peso caused the company's
dollar-denominated loans to soar.

"Despite the peso devaluation, the company's continuing
efforts to bring down its costs resulted in a lower loss
for the first six months of this year compared to the first
half last year," Benguet said.

The peso sharply fell to P43.74:$1 in late May, from the
average P41:$1 in April. In late June to early July, the
peso continued to fall hitting its intra-day low of P45.15
against the dollar last July 11.  This brought the
company's total net loss at P120.92 million in the first
half, lower from P156.50 million a year ago.

Benguet said its operating revenues in the second quarter
fell to P58.82 million from P69.49 million a year earlier.
In the first half, Benguet said its total operating
revenues rose to P136.75 million from last year's P122.69
million.  Loss from operations stood at P22.94 million in
the second quarter from P26 million in the same period last
year, while losses stood at P26.1 million in the first half
against the year-ago P59.12 million.

Last June, the New York Stock Exchange suspended the
trading of Benguet's common class "B" shares after the
company failed to maintain $50 million worth of
stockholders' equity and global market capitalization.
"A" and "B" shares of BC were untraded at the PSE on
Tuesday after last being traded at P1 and P1.80,
respectively. (ABS/CBN News Channel 23- August-2000)

NATIONAL STEEL CORP.: Liquidation threatened
--------------------------------------------
The interim receivership committee (IRC) of debt-saddled
National Steel Corp. (NSC) threatened to push for
liquidation should shareholders of the beleaguered steel
maker fail to conduct a meeting for the approval of the
proposed increase in authorized capital stock.

In a letter to Abdul Hamidy Hafiz, operations director of
Danaharta, the IRC warned that "should the stockholders'
meeting not materialize, we have no other option but to
recommend the liquidation of NSC."

The IRC is chaired by former Securities and Exchange
Commission (SEC) commissioner Monico V. Jacob. IRC
requested Danaharta to send a representative to Manila for
the said meeting or appoint the IRC as proxies, to allow
the stockholders' meeting to push through. Danaharta is a
company run by the Malaysian government which in this case,
stands as the trustee of NSC shares held by majority
shareholder, Hong Kong-based Hottick Investments Ltd.

The receiver committee said the stockholders' meeting will
be conducted as soon as the SEC gives its go signal to the
pending rehabilitation plan. Aside from the election of a
new board of directors, other items to be discussed in the
said meeting include the proposed increase in the
authorized capitalization of the company, conversion of
creditor banks' loans to equity, and write-down of various
assets accounts of the company.

"These moves are critical to the entry of a new investor to
NSC and shall be the final and most critical component in
the successful implementation of the NSC rehab plan," the
IRC said.

For its part, the SEC said it would not approve the
proposed rehabilitation plan of NSC without proof that
shareholders of the cash-strapped steel maker have given
their go-signal to the same.  At present, the Philippine
government formally owns only 12.5% of the beleaguered
firm.

In 1995, the government sold majority interest to Wing Tiek
Holdings Berhad, which later sold the shares to Hottick.
Although several investors have already expressed their
interest in acquiring the debt-laden steel maker, the SEC
admitted that the IRC has yet to find a white knight for
the struggling company.

Companies that have expressed interest in NSC are Swiss-
based Duferco Group and Paris-based Pentium Group. Some
downstream steel industry players have also reported to
join forces and bid for Hottick's shares in NSC.
After infusing $100 million in an escrow account,
Netherlands-based Ispat International NV was said to be the
most likely investor of NSC.

Recent developments, however, show that the firm is having
second thoughts over NSC and has reduced its interest to a
mere lease agreement with the firm.  Duferco, on the other
hand, is represented by Credit Agricole in negotiations to
purchase Hottick's shares in NSC.

The European firm is engaged in trading of steel products
such tin plates, special steels, and raw materials
including coal, coke, scrap, iron ore and pig iron.
(Business World 23- August-2000

PHILIPPINE NAT. BANK: Posts 1H loss, forecast dampened
------------------------------------------------------
During the first six months, Philippine National Bank (PNB)
has already incurred PhP1.446 billion ($32.18 million) in
losses.

A delay in the infusion of new capital and a slowdown in
its asset sale therefore have led Lucio C. Tan-controlled
PNB to revise downwards its 100-million Philippine peso
($2.23 million at PhP44.93=$1) net income target for the
year. PNB president Feliciano L. Miranda, Jr. told
reporters Monday night PNB may only break-even this year or
even post some losses.

"We originally projected PhP100 million in net income for
the year, on the assumption that the new capital will come
in last May. We are now hoping to at least break even," he
said.

However, with the PhP10-billion fresh capital that will
come in by end-September via the first stage of the stock
rights offering, Mr. Miranda said he expects the bank to be
"very profitable" and "reverse its losses." Another P10
billion will be raised early next year from the rights
offer.
"The additional capital will enable us to meet the
(required 10%) capital adequacy ratio.  A portion will be
used to pay liabilities, some will be invested in
government securities and some will be used for lending,"
he said.

With the fresh equity and the sale of an estimated PhP4
billion worth of idle assets, PNB is projected to post
PhP1.5 billion in net income in 2001, he added. (Business
World  23-Aug-2000)


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

BAN CHAN GROUP: Court action fended off - for now
-------------------------------------------------
Pairoj Piempongsan, a major shareholder in the Ban Chang
Group has warded off a bankruptcy suit-at least for the
time being.

The businessman is not insolvent, the Central Bankruptcy
Court has ruled on an action filed by Siam Industrial
Credit. Mr Pairoj is a guarantor of loans extended to Ban
Chang. On Tuesday last week, the court noted that Mr
Pairoj's investments in several businesses had been damaged
by the recession.

However, given an economic recovery, his businesses would
work their way out of trouble and he would be able to repay
his creditors. Ban Chang was undergoing business
rehabilitation under the new bankruptcy law, the court
said, and the creditors could apply for repayment directly
from the company. As a result, Mr Pairoj was not insolvent.

Last January, Siam Industrial Credit filed a bankruptcy
suit against Ban Chang, Mr Pairoj and Prof Prayoon
Chindapradist, citing default on repayments of loans
totalling 36 million baht. The suit against Prof Prayoon, a
former president of Thai Military Bank, was later
withdrawn.

In April, Ban Chang filed a business rehabilitation
petition to the Central Bankruptcy Court, which accepted
the proposal and appointed Asian Capital Consultant Co as
the planner. Asian Capital is preparing a rehabilitation
plan to be submitted to Ban Chang's creditors for approval.

Under the new bankruptcy law, once a business
rehabilitation petition is accepted by the court, all civil
or bankruptcy suits against the company undergoing
rehabilitation have to be put on hold. They can be lodged
again if the rehabilitation plan fails to be implemented.
(Bangkok Post  23-Aug-2000)

KIATNAKIN FINANCE: Says Bt20B in debts not recoverable
------------------------------------------------------
Kiatnakin Finance Plc (KK) said debts of around Bt20
billion, out of a total of Bt65 billion bought from the
Financial Sector Restructuring Authority (FRA), were not
recoverable.

However, Vichien Jieakjerm, the company's managing
director, said that he was still satisfied with the debt-
recovery process and expects the restructuring process to
be completed within the next one to two years.  He said
that KK has no new business expansion plans, as yet,
because the company was focusing on managing the assets
purchased from the FRA.

He added that the company's auto loans were expected to
drop to around 30 per cent of total loans this year,
compared with 50 per cent last year. Vichien said this was
due to low deposit rates encouraging auto buyers to buy
with cash.  Vichien also said that the Bank of Thailand has
approved a plan to allow finance companies to be trading
agents for unit trusts.  (The Nation  24-Aug-2000)

PHILLIP SECURITIES: SET suspends officer for hiding losses
----------------------------------------------------------
The Stock Exchange of Thailand has suspended Panom
Tangjitpaiboon's marketing-officer licence for two years
effective from July 2000.

While working at Phillip Securities (Thailand) Panom was
found to have violated the rules controlling the activities
of marketing officers by using a customer's account to
trade securities and showing dishonest intent by issuing a
false document to notify the company that the purchase
price had been paid by the customer.

To cover his actions he transferred the records of the
losses from the transaction from the customer's account to
the proprietary account claiming that he had made a mistake
in transmitting the order and the customer had rejected the
transaction.

The SET has also banned Sunisa Thaphed from marketing
securities for three months, effective from September 1
after Sunisa was found trading securities without the
customer's permission while working at ABN Amro Asia
Securities Plc. (The Nation  23-Aug-2000)

SIAM CEMENT: Plans bond issue to reduce debt
--------------------------------------------
Siam Cement Plc will issue bonds worth 15 billion baht and
use the proceeds to pre-pay debt and reduce long-term
interest costs.

The bonds are scheduled for subscription between Sept 4 and
28. The company will not increase the amount if the issue
is oversubscribed. The bonds will be issued through private
placement on Oct 1 and mature on Oct 1, 2002. Vice-
president Aviruth Wongbuddhapitak said they would carry
fixed annual interest of 5.75%.

Lead managers are Siam Commercial Bank, Thai Farmers Bank,
Bangkok Bank, Thai Military Bank, and Deutsche Bank. Co-
managers are Bank of Ayudhya, ABN Amro, Bank of Asia and
National Securities. The minimum subscription is 10 million
baht for individuals. Interest will be paid every three
months with principal repaid on maturity.

Mr Aviruth said the bonds would be similar to previous
unsubordinated issues, giving holders the same right of
claim as ordinary creditors. With high liquidity, the bonds
could be traded in the secondary market at Siam Commercial
Bank at all times, he said.  The company had already issued
bonds worth 75 billion baht, to strong interest from
institutional investors and individuals, he said. (Bangkok
Post  23-Aug-2000)

SIAM CITY BANK: Thailand scraps sale -- bids too low
----------------------------------------------------
Thailand has scrapped plans to sell state-owned Siam City
Bank Pcl, saying Newbridge Capital Ltd. and other potential
buyers weren't willing to pay enough.

Instead, Siam City Bank's bad assets will be taken from the
books and sold to the government's Asset Management Corp.,
an agency that manages delinquent loans. Supachai
Pisitwanich, permanent secretary at the Finance Ministry,
said professional bankers will be hired to run the bank's
remaining good assets, which comprise about only 10 percent
of its $6 billion in total assets.

The sale of Siam City Bank has been delayed for more than a
year because the government wasn't satisfied with the bids
it received. Only last month, the central bank rejected a
bid from U.S.-based investment fund Newbridge Capital.

SINO-THAI ENGIN. & CONSTR.: Creditors okay rehab plan
-----------------------------------------------------
Sino-Thai Engineering and Construction Plc (Stecon), a
local construction firm, yesterday won creditor approval
for a Bt4.5 billion debt-restructuring plan that will
enable it to bid again for major projects.

Stecon president Anutin Charnvirakul, said creditors
holding 83.5 per cent of the company's debt, amounting to
about Bt3.85 billion, approved the debt work out.  He said
the company now plans to intensify its efforts to expand
market share based on its healthier financial position.

"The company will be joining bids for all construction
projects in Thailand and overseas to boost its market share
and to make it number one within the next year," he said.
"We have a strong financial status to compete with other
construction companies."

Currently, Stecon has building projects worth Bt8 billion
in hand for this and next year on which it will earn an 8
per cent profit, or Bt640 million, Anutin said.  Under the
debt-restructuring plan, creditors have agreed to convert
Bt3.5 billion worth of debts into equity at a price of Bt70
per share.

They will get a Bt100 million up front in cash while a
further Bt600 million of debt will be rescheduled over the
next 6 years at a 6 per cent interest rate.  The company
will sell some assets to repay the remaining debt.

Stecon said it would raise Bt100 million for debt
repayment. After the restructuring plan is completed, the
company's debt-to-equity ratio will fall to 0.5. The
creditors will hold 58 per cent of the company, which will
have a capitalisation of Bt1.2 billion, the Charnvirakul
family will hold 25 per cent and the rest will be held by
small shareholders.

This debt rehabilitation plan is a change from the original
plan approved by the Corporate Debt Restructure Advisory
Committee (CDRAC). The change was initiated by Finansa Fund
Management Ltd, after it bought Sino-Thai debt from
creditors including HSBC, Indosuez Credit Agricole and
Sanwa Bank, at a more than 60 per cent discount on its face
value.

Thanathip Vidhayasirinun, executive director of Finansa
Fund Management Ltd, said Stecon had the potential to grow
if the company could reduce its debt and interest expenses.
Finansa therefore changed the debt rehabilitation plan to
convert Bt3.5 billion of debt into equity to give Stecon
the financial status it needed to be able to bid for big
government and private sector projects immediately.

Thanathip accepted that under the new plan, creditors will
see the face value of their loans reduced by more than 85
per cent when converted into equity but said these are the
best terms for Stecon to continue its business and generate
income to pay back loans.

Meanwhile, if the company's shares rise on Stock Exchange
of Thailand, the creditors will profit.  Finansa offered
Bt70 per share in the debt-to-equity conversion, much
higher than the market price of Bt10.50. Sino-Thai' s
shares have been suspended from trading since March 17 this
year. (The Nation  24-Aug-2000)

THAI PETROCHEM.INDUS.: Planners seek more time to file plan
-----------------------------------------------------------
Effective Planners Co, the company overseeing the
rehabilitation of Thai Petrochemical Industry Plc (TPI),
has asked the Central Bankruptcy Court for another month to
submit the plan, which was due today.

Effective Planners said it had yet to deal with a lot of
information about TPI and many of its subsidiaries. The
court has scheduled a hearing for Aug 29 to consider the
request.

A further complication looms in that amounts claimed by
creditors are higher than those specified by TPI in its
original rehabilitation petition. A report on the actual
debts of TPI is expected to be available by the end of this
month.


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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