/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/001127.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 Monday, November 27, 2000, Vol. 3, No. 230 Headlines * A U S T R A L I A * AUSTRALIAN PERSONAL COMPUTER: Scales down Web presence BIDORBUY.COM.AU: Next on-line auctioneer facing shut down GEO2: Water company goes under INTERNET TRAVEL GROUP: To post US$2.09M annual net loss MTIC CORPORATE PTY LTD: Regulator call-in to examine parent VILLAGE ROADSHOW LTD.: S&P credit rating to remain on watch * C H I N A & H O N G K O N G * CENTRAL NORTH ISLAND FORESTRY PARTNERSHIP: May go bankrupt KIN DON HOLDINGS LTD.: Posts HK$299.2M FY net loss * I N D O N E S I A * PT DANKOS LABORATORIES: Pays down US$12.66M in debt PT WENDY CITRA RASA: Creditors approve debt restructure * J A P A N * CHIYODA CORP: 970 jobs to be cut in restructuring DAIEI INC: Forecasting annual net loss INTER-LEASE CORP.: To apply for liquidation on Nov. 27 KAWASAKI HEAVY INDUS.: To cut 2,000 jobs MITSUI CONSTRUC.: Negative net worth; to seek debt waiver * K O R E A * DAEHAN BANK: Some s'holders helped secrete 18B won DONG-AH CONSTR.INDUS.:Court begins receivership proceedings HANGDO BANK: Some s'holders helped secrete 18B won HYUNDAI ENGIN.& CONSTR.: CSFB suggests debt-for-equity swap HYUNDAI ENGIN.& CONSTR.: Vows to cut debts to W2.7T in 2001 KOREA EXPRESS CO.: Court begins receivership proceedings KOREA GENERAL CHEMICAL: To be liquidated Nov. 30 NASAN BANK: Some s'holders helped secrete 18B won SAMSUNG COMMERCIAL VEHICLE CO.: Files for bankruptcy SAMYANG BANK: Some s'holders helped secrete 18B won SKM LTD.: Declared insolvent; files for court receivership * M A L A Y S I A * DRB-HICOM GROUP: Rehab to be completed soon ESSO MALAYSIA: Posts RM31M after-tax loss for Q3 LION GROUP: Rehab to be completed soon TIME ENGINEERING: dot.com IPO for cash to cut debts UNITED ENGINEERS: Shares fall 23% after Renong asset offer * P H I L I P P I N E S * CHEMOIL ASIA: Pulling out of Philippines after losses C & P HOMES INC.: Posts loss, plans capital hike * T H A I L A N D * CENTRAL PAPER INDUSTRY: Enter restructuring process SIAM UNITED SERVICES: Posts Q3 loss RAYONG TANK TERMINAL CO.: Creditors reject rehab plan S.KHONKAEN FOOD INDUSTRY: Posts Q3 loss SOUTHERN CONCRETE PILE: Posts Q3 loss SRITHAI FOOD AND BEVERAGE: Posts Q3 loss THAI FILM INDUSTRIES: Posts Q3 loss THAI GERMAN PRODUCTS: Posts Q3 loss THAI INSURANCE: Posts Q3 loss THAILAND CARPET MANUFACTURING: Posts Q3 loss THAI MODERN PLASTIC INDUS.: Posts Q3 loss THAIWIRE PRODUCTS: Posts Q3 loss TONGKAH HARBOUR: Posts Q3 loss TPI AROMATIC: Creditors approve rehab plan TRANG SEAFOOD PRODUCTS: Posts Q3 loss UNION FOOTWEAR: Posts Q3 loss ================= A U S T R A L I A ================= AUSTRALIAN PERSONAL COMPUTER: Scales down Web presence ------------------------------------------------------ The Australian Personal Computer magazine has scaled down its Web presence, halting its continuous daily news service. An article posted on the Web site yesterday said after two years, Newswire was "changing its focus, with a greater emphasis on news analysis, features and opinion. Although the Newswire site will no longer publish breaking news, Newswire will continue as a site and a section of Australian Personal Computer," the article said. "Newswire has played a pioneering role in real-time technology news publishing in Australia, but like many pioneers, the time comes when you feel the need to move on to new frontiers," APC said in a separate statement yesterday. Existing editorial staff of Newswire will be transferring to APC, it said. A source said the site was not earning enough advertising revenue to support a continuous news service. (Fairfax I.T. 24-Nov-2000) BIDORBUY.COM.AU: Next on-line auctioneer facing shut down --------------------------------------------------------- On-line auction house Bidorbuy.com.au is shaping up as the next dotcrash, with the company on the brink of closing its operations as cash supplies dwindle, industry sources said yesterday. The Sydney-based dotcom, which auctioned Olympics paraphernalia for SOCOG, is believed to be struggling to cover overheads in the fiercely competitive and crowded online auction business. Bidorbuy.com.au general manager Stan Zets was not available for comment yesterday. Unlike most other online auction houses, Bidorbuy.com does not charge commission or success fees on transactions, contributing to its cash flow problems, analysts said. Speculation is mounting that companies without solid earnings will not survive the competitive Christmas season. Earlier this week, US etailer Buy.com pulled out of Australia, retrenching 40 employees in the process. Fellow etailer Dstore, which was believed to be negotiating with Buy.com, is now trying to secure a second round of venture capital funding. But EBay managing director Simon Smith claims market dynamics for fee-based auctioneers are different to those of etailing. While EBay, which is Australia's largest online auctioneer, was also a US company that was set up here a year ago, there was little chance of US chief executive Meg Whitman pulling the plug, Mr Smith said. "Buy.com.au imported the whole business model from the US but not it did not have its advantages like the scale of its customer base," he said. "We didn't have to start from scratch but we had all the advantages of a start up. "We have a simple business model, with no inventory or fulfillment costs." Ecorp's EBay subsidiary dominates online auctions, having trumped f2's Sold.com subsidiary in the past two months, Mr Smith claimed. EBay has a sliding fee structure, as well as a success fee. Sold.com.au now takes 3.5 per cent commission on items sold, Stuff.com.au 2.5 per cent, and News Corp's Gofish.com.au 5 per cent for consumer-to- consumer and 10 per cent for business-to-consumer transactions. More than 200,000 items are bought and sold everyday at EBay and more than 1.5 million items are available online in Australia. At its annual meeting, EBay claimed gross merchandise sales for the month of August hit $3.6 million, compared to $1.8 million for Sold.com. The company will be launching Sydney and Melbourne-specific sites later this month to facilitate trade in heavier objects, such as furniture, that are not as easily traded via the post. "We are a market place and we facilitate trade between individuals and create a community feel," Mr Smith said. EBay's global reach was a major competitive advantage, he said, especially in the auctioning of collectables that could be easily posted. "We can leverage off the US website and can boast 18.9 million users around the world." (The Daily Telegraph 24-Nov-2000) GEO2: Water company goes under ------------------------------ Water treatment technology company Geo2 has gone broke and is up for sale, leaving a $4.5 million hole in the company's finances while still owing $5 million to creditors. The Geo2 board put the company in the hands of liquidator SimsLockwood on Tuesday and stopped trading at a new low of 6› a share. It is believed the company appointed the administrator after discussions with the Australian Securities & Investments Commission about its financial viability. "The company has run out of cash," SimsLockwood administrator Mr David Lockwood said yesterday. Mr Lockwood said Geo2 had raised $4.5 million since June but appeared to have spent all the money. "What we are doing is reconciling where all the money has gone. There's a reasonably significant hole," he said. Mr Lockwood said he was looking for an equity investor to put $5 million into the technology company following a restructure and a recapitalisation. He said its assets - equipment, intellectual property and joint venture stakes - were worth about $10 million. Administrators will spend the next week working out which of the company's eight existing projects are core activi- ties, selling off those considered peripheral and looking for funds to commercialise the remainder. Geo2 has marketed itself as an environmentally aware company offering "green" technologies to purify water, including a cyanide gold refinery in China. Last month, the company raised a $1.5 million short-term loan from a secured creditor associated with a former Geo2 director, Mr Charles Hider. In a November 6 statement to the Australian Stock Exchange, Geo2 said the interest rate on the loan was 36 per cent with a default rate of 40 per cent. The deal included an establishment fee of $60,000, a paid guarantee of $30,000 to Mr Hider and legal costs of $14,372. The first month's interest payment of $38,467 was paid upfront and the lenders got 1.5 million options (with an exercise price of 20 cents until October 2003) with the right to convert all or part of the loan into shares and options. The loan was raised to tide over Geo2 while it tried to raise $6.8 million through a non-renounceable rights issue, for which it issued a prospectus. Lockwood Sims will reveal its restructuring plans at the company's annual general meeting next Wednesday. (Australian Financial Review 24-Nov-2000) INTERNET TRAVEL GROUP: To post US$2.09M annual net loss ------------------------------------------------------- Internet Travel Group Ltd is forecasting a $A4 million ($US2.09 million) net loss for this fiscal year. According to ITG chairman Ian Stanwell at the company's annual general meeting, "We now expect to have a small positive EBITDA (earnings before interest, tax, depreciation and amortisation) result, but a net loss after tax of around $4 million for the year ended 30 June 2001." MTIC CORPORATE PTY LTD: Regulator call-in to examine parent ----------------------------------------------------------- Corporate regulators have been called on by an electronic commerce company to investigate the conduct of its listed parent. Owners of the Western Australian company, MTIC Corporate Pty Ltd, claimed on 22 November 2000 their parent company IPT Systems starved them of funds and forced it into insolvency. The owners said as a last resort they appointed adminis- trators Martin Jones and Garry Trevor of Ferrier Hodgson. Adrian Foate, Andrew Mann, and Russell Miln asked the Australian Securities and Investment Commission and the Australian Stock Exchange to investigate the IPT board members and their decision to withhold funds. (The West Australian 22-Nov-2000) VILLAGE ROADSHOW LTD.: S&P credit rating to remain on watch ----------------------------------------------------------- Worldwide credit ratings agency Standard & Poor's will keep its BBB-minus corporate credit rating and its BB-plus subordinated debt issue rating for Village Roadshow Ltd on Creditwatch, where they were placed on September 13. S&P made the decision on news that Village may sell part of its strong radio operation Austereo. "Given Village Roadshow's already less than satifactory cash flow protection measures, the potential sell down of its radio division could undermine the company's credit quality," S&P said in a statement. The agency also will take into consideration Village's pledge to improve its exhibition business, as well as the possibility of asset saless or improved cash flow generation over the next two years. (Asia Pulse 24-Nov-2000) ============================== C H I N A & H O N G K O N G ============================== CENTRAL NORTH ISLAND FORESTRY PARTNERSHIP: May go bankrupt ---------------------------------------------------------- A joint venture between China's Citic and New Zealand's Fletcher Challenge Forests - Central North Island Forestry Partnership -- faces bankruptcy if banking covenants on US$650 million (HK$5.07 billion) of debt are breached by the year's end, the parties said yesterday. "It's a potential consequence but not one that we would favour," Greg Malloy, Citic's representative in New Zealand said. "But receivership is possible," he said. "The ratio breach is effectively an earnings ratio, and it's probable that will occur. If we were to avoid a receivership situation then we would need some kind of recapitalisation with a long-term agreement between the partners and the banks." The joint venture has been plagued by acrimony and initially included Brierley Investments. It bought the 164,000 hectare Kaingaroa State Forest from the government in 1996 for NZ$2.17 billion (HK$6.67 billion). FCL Forests acknowledges now that the partnership paid too much. Brierley exited last year for NZ$43 million, suffering a NZ$130 million loss in the process. Citic has alleged CNI was mismanaged by FCL Forests and that FCL Forests supplied CNI logs too cheaply to Fletcher's mills. These claims are the subject of court action between the partners with Citic wanting FCL sacked as partnership manager. Both parties are in a "discovery phase" after which a High Court hearing date will be set some time in 2001. Mr Malloy said Citic saw two main issues - management of the partnership and terms under which new equity is injected. It calculates the capital needs at more than US$200 million. "We have had discussions, I guess we will have more. Fletchers is probably focused on the rights issue but yes, it looks like we will have a second ratio breach by December 31." According to prospectus documents, CNI breached a banking covenant on agreed earnings ratios in September. FCL Forests investor relations manager Mark Harris said receivership was "one of the scenarios that you need to take account of." Neither Citic nor FCL Forests were prepared to name the members of the banking syndicate. Uncertainty surrounding CNI, along with low log prices and the sheer weight of an FCL Forests' 2-for-1 rights issue at NZ$0.25 has weighed heavily on its share price. The stock closed yesterday at NZ$0.25 - down one cent - against NZ$0.80 before the issue was announced on October 10. The prospectus for the rights issue, which lists possible risks, states receivership for CNI as one. (Hong Kong iMail 23-Nov-2000) KIN DON HOLDINGS LTD.: Posts HK$299.2M FY net loss -------------------------------------------------- Garment maker Kin Don Holdings Ltd. will record a net loss of HK$299.2 million for the year ending November. By comparison, the year before it recorded a net profit of HK$111.5 million. Loss per share the most recent year was 59.14 HK cents compared with earnings per share of 25.75 HK cents the previous year. Revenue fell 19 percent to HK$325.52 million in results qualified by its auditors. No final dividend will be distributed. ================= I N D O N E S I A ================= PT DANKOS LABORATORIES: Pays down US$12.66M in debt --------------------------------------------------- PT Dankos Laboratories has repaid debt totalling US$12.66 million, bringing its outstanding debt to some 200 bln rupiah as of Nov 20, according to a report in Bisnis Indonesia quoting Dankos financial director Justian Sumardi. The remaining 200 billion rupiah includes debt owed by subsidiaries PT Bintang Toedjoe, PT Hexpharm Jaya Laboratories and PT Saka Farma Laboratories. The funds to pay down the US$12.66 million in debt were taken from part of the proceeds of a rupiah bond issue in October. Dankos creditors include Sanwa Bank Singapore, Bank of Tokyo, Mitsubishi Hong Kong Bank Jakarta, Sakura Bank Singapore, Fuji Bank Singapore, ING Indonesia Bank Jakarta, DBS Indonesia and Sumitomo Bank Singapore. (AFX (AP) 22- Nov-2000) PT WENDY CITRA RASA: Creditors approve debt restructure ------------------------------------------------------- Creditors of Anwar Sierad group unit PT Wendy Citra Rasa have agreed to restructure the company's debts, according to Jakarta Commercial Court Judge Putu Supapmi said. Its creditors include Bank Central Asia and the Indonesian Bank Restructuring Agency (IBRA). Supapmi said debts to the company's suppliers will be repaid on schedule, while debts to banks will be repaid within the broad restructuring process of its parent firm PT Anwar Sierad via a combina- tion of a debt-to-equity swap, a convertible bond issue and a rescheduling scheme. The company has total debt of 214.8 billion rupiah. Parent Anwar Sierad's total debts including Wendy's, stand at US$316 million. Supapmi said that of the total debts, US$210 million will be repaid through a debt-to-equity swap, US$90 million via a seven-year convertible bond issue and US$16 million under a rescheduling scheme of up to 15 years. (AFX News (AP) 22-Nov-2000) ========= J A P A N ========= CHIYODA CORP: 970 jobs to be cut in restructuring ------------------------------------------------- Engineering contractor Chiyoda Corp. has unveiled a new restructuring plan which, among other things, calls for cutting 970 jobs from its workforce of 1,100 by March 2002. The plan covers fiscal years 2000 through 2005 and will ask its creditors -- including the Bank of Tokyo-Mitsubishi and trading house Mitsubishi Corp. -- to forgive some 26.2 billion yen in debts. Additionally, the firm will reduce its capital by 14.2 billion yen after obtaining approval at a January shareholders' meeting. Chiyoda also intends to raise capital by issuing new stock worth 9.8 billion yen. Chiyoda President Kiyomitsu Nishio said the current management team will take responsibility for the financial problems by carrying out the new restructuring plan. The company will also seek further financial support from the Bank of Tokyo-Mitsubishi and Mitsubishi Corp. for continuing its businesses and improving its financial stability. The plan is designed to return the firm to a profitable status in 2003 and dissolve 42 billion yen in accumulated losses by March 2005. Currently, however, Chiyoda recorded a 2.26 billion yen pretax loss for the first six months of fiscal 2000 - a dramatic turnaround from a profit of 88 million yen for the same period the previous year. Sales declined 38.8 percent to 47.26 billion yen. Operating losses for the period reached 3.61 billion yen, up from an operating loss of 2.14 billion yen the previous year. Net loss totaled 3.71 billion yen compared with a 117 million yen net profit the same period the prior year. For the whole fiscal year, the company is forecasting 15.3 billion yen in pretax losses and a 4.86 billion yen net loss on sales of 86.6 billion yen. DAIEI INC: Forecasting annual net loss -------------------------------------- On top of a 240 billion yen extraordinary loss in this fiscal year ending February, financially troubled supermarket chain operator Daiei Inc. expects to post an unconsolidated net loss of more than 130 billion yen. That's a wide turnaround from the previous year in which Daiei posted a 1.12 billion yen profit. The company pointed to huge cost overruns for being incurred for its restructuring as the main reason for its turnaround. The extraordinary loss it attributed to costs for the planned closure of dozens of loss-making outlets and the disposal of subsidiaries by the end of the fiscal year, company sources said. INTER-LEASE CORP.: To apply for liquidation on Nov. 27 ------------------------------------------------------ Nonbank lender Inter-Lease Corp. will apply for liquidation on Nov. 27. Outstanding liabilities left by the Nippon Shinpan Co. affiliate total some 560 billion yen, which would rank it as the fifth largest bankruptcy in Japan for the year. Set up in 1974, Inter-Lease was burdened with heavy debts stemming from real estate-related loans it had extended during the speculation-driven bubble economy period. Nippon Shinpan, which owns an 8.8 percent stake in Inter-Lease, recorded a special loss of 46 billion yen for the first half of the year ended Sept. 30 to cover losses stemming from the liquidation. KAWASAKI HEAVY INDUS.: To cut 2,000 jobs ---------------------------------------- Kawasaki Heavy Industries Ltd. reportedly will cut 2,000 jobs by the end of March 2005 pursuant to mid-term business plan. The plan calls for the staff reduction through attrition and by sending workers to companies outside the group. The Japanese heavy machinery manufacturer currently has about 24,000 employees. Kawasaki Heavy also will sell idle assets to raise money for cutting its interest-bearing liabilities from 500 billion yen to 420 billion yen. Board members also will be cut, from 26 to 10. MITSUI CONSTRUC.: Negative net worth; to seek debt waiver --------------------------------------------------------- Mitsui Construction Co. has a negative net worth and plans to ask creditor banks to waive debt in order to straighten out its finances by the end of the first quarter next year. The Tokyo-based construction firm's parent-only liabilities exceeded assets by 71.5 billion yen as of September, accoridng to Mitsui Construction President Kazuhiro Inamura at a press conference. For the six months to September, the company recorded extraordinary losses of 91.8 billion yen due to disposal of latent losses on real estate holdings earmarked for sale, as well as settlement of problem loans to affiliate companies under more stringent accounting standards. Inamura said the company would draw up a comprehensive restructuring plan by year's end, adding that it would consider such possibilities as forming alliances or merging with a competitor. In an effort to reduce its liabilities, Inamura said Mitsui Construction would ask key creditor banks, including Sakura Bank, to waive debts totaling roughly 100 billion yen so that it can dispose of sour assets. It will also ask major shareholders, such as realtor Mitsui Fudosan Co., to buy additional shares to shore up its capital base. It would be the second such request. Inamura and the company's current management would step down after formulation of the reconstruction plan to take responsibility for the company's poor performance, sources close to the firm said. Mitsui Construction's fortunes took a turn for the worse after excessive investments in real estate and golf course development soured after the collapse of the asset-inflated bubble economy. If it goes ahead with the debt relief request, Mitsui Construction will be the seventh company in Japan's construction sector to ask for creditor banks' debt forgiveness. This year alone, two ailing contractors -- Kumagai Gumi Co. and Hazama Corp. -- have already called on their creditors to give up massive loans to them. Meanwhile, Sakura Bank said the same day its plan to provide full support to the contractor remains unchanged, adding that the company will be able to rebuild its business. Mitsui Fudosan said Friday that it is possible for Mitsui Construction to reconstruct its management and that it will continue placing orders with Mitsui Construction. Mitsui Construction's core business performs well and it will continue to receive full support from Sakura Bank, the company noted. (Japan Times Online 25-Nov-2000) ========= K O R E A ========= DAEHAN BANK: Some s'holders helped secrete 18B won HANGDO BANK: Some s'holders helped secrete 18B won SAMYANG BANK: Some s'holders helped secrete 18B won NASAN BANK: Some s'holders helped secrete 18B won --------------------------------------------------- The Korea Deposit Insurance Corp. has revealed that six of the largest shareholders of various liquidated merchant banks, including Daehan, Hangdo, Samyang, and Nasan, stole a total of W18 billion in company assets. KDIC said Thursday that it uncovered the thefts during the course of its recent investigation of the personal assets of the largest shareholders of failed merchant banks. In the case of Nasan, its former largest shareholder Ahn Byung-kyun placed under his own name, company real estate valued at W1.2 billion. Similarly, Cho Joon-rae, who was the largest shareholder of the now-defunct Hangdo, transferred company real estate worth W7.78 billion to various members of his family when it became apparent that the government was going to suspend the bank's operations. (The Digital Chosun 23-Nov-2000) DONG-AH CONSTR.INDUS.:Court begins receivership proceedings KOREA EXPRESS CO.: Court begins receivership proceedings ----------------------------------------------------------- Dong-Ah Construction Industrial Co Ltd and Korea Express Co officials confirm that the Seoul District Court will begin court receivership proceedings for the two companies. The court appointed Kim Dong-yoon as receiver for Dong Ah, and named Chang Ha-rim and Korea Express president Kwak Young-wook as co-receivers of Korea Express, an official at the Seoul district court said. "Only after agreement from creditor banks to the receivership, the court will grant final approval for placing the two companies under receivership," the official said. This process usually takes several months, the official added. The court decision comes less than three weeks after the two companies were declared insolvent and their assets and debt frozen. (AFX News Limited 24-Nov.-2000) HYUNDAI ENGIN.& CONSTR.: CSFB suggests debt-for-equity swap ----------------------------------------------------------- Amid intense wrangling over the fate of Hyundai Engineering & Construction (HEC), a leading foreign brokerage yesterday recommended a debt-for-equity swap for the terminally ailing contractor. U.S.-based brokerage Credit Swiss First Boston (CSFB) said that a debt-for-equity swap by creditors may be the last plausible solution to HEC's bankruptcy crisis. Creditors are expected to initially swap about 1 trillion won ($847 million) worth of loans into equities, the CSFB said, estimating the optimum debt level for HEC was 3 trillion won, compared with its 5.2 trillion won liability at the end of October. "HEC's 1.29 trillion won self-rescue package was welcomed by the government and creditors, but may not settle the company's fundamental liquidity shortage problems," said the CSFB in a report released to Internet media. "An estimated 1 trillion-won debt-for-equity swap will probably occur in the first half of next year." The CSFB report noted that HEC will be able to raise between 700 billion won and 1.2 trillion won, including 600 billion won in cash, under its latest self-rescue measures. As a result, HEC is expected to cut its debt to 4.4 trillion won by the end of this year, avoiding an insolvency crisis. But, without further drastic debt cuts to 3 trillion won or lower, HEC may become insolvent next year, said the report, should all of the firm's maturing debts not be rolled over and its operating profit in 2001 reach 600 billion won. "Hyundai insisted that it will raise an additional 600 billion won through real estate sales for the purposes of debt reductions. But its outlook is not bright,particularly in light of current market circumstances," said the report. CSFB forecast that Hyundai's attempt to attract about $1 billion in investment from the American International Group into its ailing financial units may materialize by year's end, noting that the Seoul government will extend help. Hyundai watchers have said that should the AIG deal collapse, the entire group would once again face the danger of a fresh liquidity crisis, clouding the survival of HEC. The CSFB report said that the government has switched from a hard line stance on the Hyundai crisis and is likely to make its final conclusion on the fate of HEC by the end of the first quarter of 2001. "The Hyundai crisis holds a prime key to the settlement of Korea's credit crunch. A successful solution of the crisis will create positive effects for the commercial paper market," it said. In the wake of the announcement of HEC's bailout steps, many foreign analysts forecast that the company would run into a serious insolvency crisis next year. About 3.4 trillion won worth of HEC-issued bills and debts will come due in 2001. Including the recently rolled over debt of 800 billion won, the ailing contractor's total debt payment volume next year will rise to 4.2 trillion won. (Korea Herald 24-Nov-2000) HYUNDAI ENGIN.& CONSTR.: Vows to cut debts to W2.7T in 2001 ----------------------------------------------------------- In a move to eliminate lingering market uncertainty over its viability, Hyundai Engineering & Construction (HEC) declared yesterday that it would reduce its debts from the current level of 4.8 trillion won ($4.1 billion) to 2.7 trillion won by the end of next year. HEC plans to bring down the debt load to 4.1 trillion won by year's end and further lower it to 2.7 trillion won by the end of next year by implementing its latest self-rescue plan and generating additional funds from normal operations. The company said that it has already presented the debt reduction plan to its main creditor, Korea Exchange Bank, and credit rating agencies such as the Korea Management Consulting & Credit Rating. It was reported that Chung Mong-hun, chairman of Hyundai Asan Corp. and de facto owner of the Hyundai Group, met with KEB President Kim Kyung-lim and explained the plan. HEC, which narrowly averted bankruptcy at the end of last month, put forward a self-rescue plan to raise 1.29 trillion won Monday, but fears remain that the company's financial crunch will last thorough next year. HEC has about 2.55 trillion won in loans reaching maturity next year (1.97 trillion won from domestic financial institutions and $534 million from overseas). Including the 714 billion won in debts which were rolled over this year, its total liability for next year is estimated at around 3.27 trillion won. HEC plans to reduce borrowing from financial institutions to 1.75 trillion won with funds secured by selling Sosan farmland, which should bring in 300 billion won, and from 450 billion won in reserve funds and 212.3 billion won of liquidity left over after fulfilling its self-rescue plan by the end of this year. In addition, the company plans to raise 1.84 trillion won next year by revolving half of its maturing bonds totaling 1.35 trillion won, obtaining 550 billion won in fresh loans and loan rollovers, $3.6 million in export financing and another $2 million in project financing. If all goes as planned, 137.7 billion won will be left after all financial obligations are met, officials explained. To revolve maturing bonds next year, the company asked credit rating agencies to upgrade its credit rating to investment grade. It has also asked banks for standby credit for emergency needs. HEC officials see a rating upgrade as the key to its funding plans. Meanwhile, the company has 429.8 billion won in debts coming due next month. It plans to repay them with operation profits amounting to 85.9 billion won, 210 billion won in advance payments from the sale of Sosan farmland and 46 billion won in proceeds from the sale of an apartment complex in Pundang, south of Seoul. (Korea Herald 24-Nov-2000) KOREA GENERAL CHEMICAL: To be liquidated Nov. 30 ------------------------------------------------ Korea General Chemical Corp., considered a typical nonviable state-run company, is to be liquidated Nov. 30, 27 years after its founding, the Commerce, Industry and Energy Ministry said yesterday. Korea Development Bank, which owns 99 percent of the ailing company, will officially declare the dissolution of the company at a shareholders meeting and take steps for liquidation. Following the dissolution, employees should tender their resignations. The factory will come to a halt next month. The factory could continue operation if the ministry is successful during ongoing negotiations with a local business interested in purchasing the chemical works. Korea General Chemical is the sole local producer of aluminum hydroxide, but a committee promoting the privatization of state-run companies was unimpressed when it picked prime candidates for liquidation earlier this year. "Liquidation is unavoidable; the accumulated deficit for the last five years reached 145 billion won and profitability can hardly be guaranteed," the ministry said. But company employees still held out hope over a 121 percent increase in exports over last year which brought in $17 million. The labor union went on a partial strike Nov. 17 and no aluminum hydroxide, a chemical for treating sewage, has been produced in Korea since then. (Korea Herald 24-Nov-2000) SAMSUNG COMMERCIAL VEHICLE CO.: Files for bankruptcy ---------------------------------------------------- Samsung Commercial Vehicle Co filed for bankruptcy at Taegu's district court, asking for court protection from its creditors. The company's petition says debts exceed assets by 11.8 billion won (US$ 10.1 million). It has an accumulated deficit totaling 450.2 billion won, including the loss of capital amounting to 440 billion won. The court will review the application and release its findings after questioning the company's president. The financial crisis in 1997 led to a tailing off of demand for the company's products. Some 340 billion won were injected last September and foreign buyers were sought to no avail. The company had assets of 643.8 billion won against debts of 655.6 billion won as of October 31. SKM LTD.: Declared insolvent; files for court receivership ---------------------------------------------------------- SKM Ltd, manufacturer of audio cassette and video tapes, has been declared insolvent and filed for court receivership after failing to repay 6 billion won in promissory notes. According to the Yonhap News Agency, the company owes an estimated 70 billion won to banks -- about 25 billion won to Korea First Bank, another 20 billion won to Korea Exchange Bank and 5 billion won each to Cho Hung Bank, Korea Development Bank, Kookmin Bank and Seoulbank. =============== M A L A Y S I A =============== DRB-HICOM GROUP: Rehab to be completed soon LION GROUP: Rehab to be completed soon ------------------------------------------- The debt restructuring exercises of the DRB-Hicom Group amounting to RM6 billion and the Lion Group, amounting to about RM4 billion, will be completed soon. The Corporate Debt Restructuring Committee (CDRC) is expected to complete the exercise in about a month. "We are in the final stages but are talking with foreign banks who have taken on a tough negotiating stance," said Datuk C. Rajendram, CDRC chairman and executive deputy chairman of Rating Agency Malaysia Bhd. He was speaking to the Press at RAM's 10th anniversary celebration in Kuala Lumpur last Tuesday. Currently CDRC has RM15 billion debts accrued by 16 companies undergoing restructuring. Rajendram was confident of clearing them soon. On CDRC's success, he said initially there were 75 applications totaling RM46 billion for debt restructuring but 26 companies with debts of RM7 billion were rejected or transferred to Pengurusan Danaharta Nasional Bhd. "We do not have statutory power. If we think it cannot be done, then we transfer," Rajendram said. Of the remaining 49 companies with debts of RM39 billion, he said 33 companies with debts totalling RM24 billion have already been restructured. "DRB-Hicom and Lion Group make up RM10 billion of the debts and the remaining RM5 billion will also be completed soon," he said. According to Rajendram, the restructured companies have a 98.5 per cent rate of return to their respective creditors. He also called for the CDRC to be a permanent body and for legislation which would favor borrowers. "Now creditors have an advantage over borrowers and this can destroy entrepreneurship and value of assets as the legislation favors liquidation rather than restructuring," he added. "The CDRC should be made permanent and be formed into a statutory body like the Chapter 11 in the United States where companies have a platform to negotiate." He attributed one of the causes of the problems to banks having a mismatch of loans and deposits. "Banks take short term deposits and give long term loans. To avoid this mismatch, the Government has stressed on the bond market where cash flow should match funds," Rajendram added. He foresees interest rates firming with more companies turning to bonds as it means cheaper funds for longer periods. "It is the ideal time for big companies to come to the bond market," he said. Meanwhile Deputy Finance Minister Datuk Dr Shafie Mohd Salleh said in his speech that the credit rating business has facilitated the phenomenal growth of the corporate bond market which was valued at RM6.3 billion in 1990, but had reached RM90 billion by end 1999. While RAM had played an important part in promoting a risk-based credit rating culture, Shafie said other credit rating institutions such as the consumer credit bureau had also helped guard against excessive risk-taking behaviour that have contributed to financial crises all over the world. "Our experience in promoting the bond market and the credit rating industry offers a useful lesson for other developing countries that are in the process of creating a domestic bond market." He called on rating agencies to compete not only in the domestic market but also in the region and internationally to face the changing market place.(AsiaGateway 23-Nov- 2000) ESSO MALAYSIA: Posts RM31M after-tax loss for Q3 ------------------------------------------------ Esso Malaysia Bhd (EMB) has reported an unaudited after tax loss of RM31 million in the third quarter of this year compared to an after tax loss of RM27 million for the same quarter last year. In a statement released to the Kuala Lumpur Stock Exchange (KLSE) here on Thursday, EMB said the turnover for the quarter increased by 48 percent compared to the correspond- ing period last year reflective of the strong rally in crude and product prices which began in mid-1999. As prices rose, however, margins continued to be impacted by adverse price recovery lags in the controlled products sector. The statement said that Liquified Petroleum Gas (LPG) margins were further reduced when the government implemen- ted a new benchmark late last year resulting in lower price recovery. EMB said that throughput at the Port Dickson Refinery averaged 64 thousand barrels per day (KBD) in the current period compared to 75KBD in the same quarter of 1999. The lower crude rate was due to a 10-day shutdown in July 2000 for minor maintenance work on the refinery process unit. In addition, low margins did not support processing crude for export sales. For the next quarter, EMB expects demand for petroleum product to increase with the economic growth. EMB said although there would be further recovery of price lags in controlled products, volatile crude/product prices would continue to cause uncertainty in the overall margins. (Malaysian National News Agency 24-Nov-2000) TIME ENGINEERING: dot.com IPO for cash to cut debts --------------------------------------------------- Time Engineering Bhd -- which is RM5 billion (S$2.3 billion) in debt -- will sign the underwriting agreement for the initial share sale of its Time dotCom Bhd unit tomorrow after missing a Nov 15 target, the proceeds from which are earmarked for reducing its debts. Time Engineering shares rose as much as 5.5 per cent, their biggest one-day gain in five weeks, on optimism that the share sale means there won't be further sale delays. Time Engineering's stock has fallen 10 percent this month after missing a target to sell shares in Time dotCom by Nov 15. UNITED ENGINEERS: Shares fall 23% after Renong asset offer ---------------------------------------------------------- United Engineers Malaysia Bhd. shares fell 23 percent after it said it would use new shares to buy $1.76 billion in assets from parent Renong Bhd., diluting stakes of minority shareholders and leaving them in the dark about Chairman Halim Saad's plans. The asset shuffle reinforced investor concern that UEM is being called upon for a second time in three years to help Renong and its controlling shareholder, Halim, strengthen their hold on the group. The plan, along with other related proposals, would raise Halim's stake in Renong to 69 percent from 16.5 percent. It would raise Renong's UEM stake to 54 percent from 38 percent, while diluting minority shareholders' stakes by a quarter. "This is unfair treatment of minority shareholders," said Nor Hayati Abdul Hamid, who helps manage 200 million ringgit at Metrowangsa Asset Management Bhd. It's "related to corporate governance, which would be another reason foreigners would stay away from Malaysia." The plan means UEM will also be saddled with the task of having to sell the assets needed to repay the group's debts. To fund managers still smarting from the 1997 bailout of Malaysia's most-indebted company that also left them in the cold, the latest plan is a reminder of how the nation's best-connected tycoons can continue to thumb their noses at investors. Some of the minority investors in UEM that will see their stakes reduced include the largest Malaysian pension fund, the Employees Provident Fund, state-investment arm Khazanah Holdings Bhd. and Lembaga Tabung haji, a state-run pilgrim fund. Halim, 47, is a protege of Malaysian Finance Minister Daim Zainuddin. His company, Renong, was formed in 1989 by pooling many of the interests of the ruling United Malay National Organization political party. UEM shares fell 1.14 ringgit to 3.86 ringgit when they resumed trading today after a four-day halt. Earlier, the stock fell 30 percent. That was the biggest one-day decline since Nov. 18, 1997, a day after it told investors it had bought a 31 percent stake in Renong, a move widely seen as rescuing the parent and Halim. UEM shares were the most active, with 29.1 million shares traded, more than 15 times its six-month daily average of 1.9 million. UEM plans to begin selling the assets as soon as it completes the purchase, and hopes to get at least get at least a 10 percent return from the sale, said its managing director Ramli Mohamad. Shares of Renong, which has until Nov. 30 to accept UEM's purchase offer, fell 12 sen, or 7.9 percent, to 1.39 ringgit. It was the second-most active stock, with 6.5 million traded, about four times its six- month daily average. Halim, who currently owns 16.5 percent of Renong, plans to buy Time Engineering Bhd.'s 21.6 percent stake in Renong. Additionally, he has the option to buy a 31 percent stake in Renong from UEM. All those purchases would give him 69 percent in Renong. Also, with UEM's asset purchase, Renong's 38 percent stake in UEM would be raised by 16 percent. "There's no reason why UEM needs to do this," said Ang Kok Heng, who helps manage 150 million ringgit at TA Asset Management Sdn. It's Halim, who "has to do something to make the takeover of Renong worthwhile." UEM will have to sell the assets it is taking over from Renong to repay holders of an 8.4 billion ringgit bond sold by its toll-road unit Projek Lebuhraya Utara-Selatan Bhd, or PLUS. That may not be easy, investors said. "If Renong couldn't sell the assets, what makes UEM think it's any easier for them to do so?" said Chong Sui San of Malaysia British Assurance, who's considering selling some of the UEM shares her 800 million ringgit fund holds. "Renong is dumping its troubled assets in UEM's lap." Ramli said the sale of the assets would pare down the debt at PLUS and raise the value of PLUS. UEM could also sell fewer shares in PLUS later as it would need less money for debt repayment, Ramli said. A share sale in PLUS was part of the debt reorganization plan at UEM. Among the assets UEM is taking over are stakes in six publicly traded companies. They are 12 percent of banking group Commerce Asset-Holding Bhd., 39 percent of Crest Petroleum Bhd., 60 percent of hotels operator Faber Group Bhd., 3.2 percent of Camerlin Group Bhd., 50 percent of bus operator Park May Bhd. and 47 percent of Time Engineering Bhd. As of June 30, three of the companies were unprofitable. HSBC Securities, Credit Suisse First Boston and BNP Paribas cut their recommendations on UEM, telling investors to sell the company's shares. Under Malaysian exchange rules, a stock is allowed to fall as much as 30 percent in each of the two trading sessions a day. Meanwhile, Halim may have tried to unveil some good news to offset the slide in UEM and Renong shares. Time dotCom Bhd., owned by Renong's unit Time Engineering, signed an agreement today with Commerce International Merchant Bankers Bhd. and other investment banks and brokerages to manage its long-awaited initial share sale. Still, "people just don't believe in these maneuverings anymore, when they" take advantage of minority share- holders, said Phua Lee Kerk, who helps manage S$350 million ($199 million) at APS Asset Management Pte. The Edge weekly said on its Web site that Halim has secured loans of 3 billion ringgit from three banks to pay UEM for the 31 percent Renong stake. Yesterday, Halim denied he had secured the financing. UEM's move to buy the Renong assets is delaying the company's plans for an initial share offering by PLUS. Last week, UEM had said it may sell shares in PLUS before June. The sale had originally been slated for December. "A lot of our energy is spent handling this PLUS" sale, Ramli said. "We want to start to grow, but to grow, we need to be substantially free of debt, and this" purchase of Renong assets "is the best way to do it." (Bloomberg 24- Nov-2000) ===================== P H I L I P P I N E S ===================== CHEMOIL ASIA: Pulling out of Philippines after losses ----------------------------------------------------- The New Petroleum Players Association of the Philippines (NPPAP) confirms that one of its members, ChemOil Asia, will terminate its operations in the country by year end. In an interview, NPPAP president Fernando Martinez said ChemOil has decided to scrap its 25-year contract with the government as investment horizon in the country remains dim. "Here's a foreign investor that came -- with the expecta- tion of oil deregulation -- pulling out, and it sends a very bad message in the industry that situations in this country is bad as far as investments are concerned," Martinez said. He said ChemOil decided to shut down operations in the country amid huge losses, aggravated by the worsening political disorder. One of the world's largest terminal operators, ChemOil entered the Philippines when the oil industry was deregulated a few years back. It currently operates a terminal in Nunoc Surigao del Sur in Mindanao. C & P HOMES INC.: Posts loss, plans capital hike ------------------------------------------------ For the first nine months of the year, C & P Homes Inc. posted a net loss of P561 million, a drastic turnaround from net income of P37 million for the same period in 1999. In the meantime, the country's largest low-cost housing developer plans to increase its capital stock to P15 billion from P5 billion. Analysts said the move aims to address the company's obligations and pave the way for the entry of a strategic partner in the future. In a disclosure to the Philippine Stock Exchange, C&P corporate secretary Gemma Santos said the increase in capital stock will be done by issuing P10 billion worth of preferred shares and P5 billion in common shares. =============== T H A I L A N D =============== CENTRAL PAPER INDUSTRY: Enter restructuring process --------------------------------------------------- Central Paper Industry Public Co., Ltd. (CPICO) has completed negotiations with Siam City Bank Public Co., Ltd., its major financial institution creditor, and is entering into the formal legal process with the Corporate Debt Restructur-ing Advisory Committee (CDRAC). After signing a debtor-creditor agreement, the legal process will be withdrawn. RAYONG TANK TERMINAL CO.: Creditors reject rehab plan ----------------------------------------------------- A Bt4.67 billion debt restructuring plan for Rayong Tank Terminal Co Ltd, a unit of Thai Petrochemical Industry Plc, was rejected at a meeting of creditors, according to a TPI attorney. The attorney said only 30.64 percent of creditors agreed to the plan while major creditor Sumsung Construction voted against it. A Sumsung Construction representative said that if the proposed plan was approved and implemented, the company's debts would not be fully repaid. According to the plan, Rayong Tank Terminal is to be disposed in line with its parent company restructuring plan under which noncore assets will be sold. The proceeds raised from disposal of Rayong Tank Terminal will be added to the debt repayments by parent company TPI. The proceeds and TPI's own cashflow then will be allocated among creditors for debt repayment, he said. The rejection of Rayong Tank Terminal's restructuring plan inevitably will affect TPI's restructuring plan, and as a result, TPI will file a petition to amend the plan. (AFX News Limited 24-Nov-2000) SIAM UNITED SERVICES: Posts Q3 loss ----------------------------------- Siam United Services recorded a consolidated loss of 37.8 million baht for the third quarter of this financial year, up from a loss of 27.8 million baht for the same period the prior year. For the first nine months of the FY, the company posted a 180.6 million baht loss, over twice its 82.3 million baht loss for the same nine-month period last year. S.KHONKAEN FOOD INDUSTRY: Posts Q3 loss --------------------------------------- S. Khonkaen Food Industry recorded a consolidated loss of 3.4 million baht for the third quarter of this financial year, down significantly from a loss of 12 million baht for the same period last year. For the first nine months, its consolidated loss was 14.9 million baht, up from a 9.7 million baht loss for the same period the prior year. SOUTHERN CONCRETE PILE: Posts Q3 loss ------------------------------------- Southern Concrete Pile recorded a 7.5 million baht loss for the third quarter of this fiscal year, down from a loss of 17.2 million baht for the same period last year. For the first nine months of the year, the company posted a loss of 51.2 million baht, down from a loss of 79 million baht for the same period last year. SRITHAI FOOD AND BEVERAGE: Posts Q3 loss ---------------------------------------- Srithai Food and Beverage posted a consolidated loss of 106 million baht for the third quarter of this year, a turnaround from a profit of 4.3 million baht for the same period last year. For the first nine months, the company recorded a loss of 289.2 million baht, compared with a profit of 8 million baht for the first nine months of last year. THAI FILM INDUSTRIES: Posts Q3 loss ----------------------------------- Thai Film Industries recorded a consolidated loss of 189.5 million baht for the third quarter of this financial year, over 50 percent than the 409.5 million baht loss it recorded for the same period the previous year. For the first nine months, the company posted a loss of 380.7 million baht, likewise halved from the 835.3 million baht loss it posted for the same period last year. THAI GERMAN PRODUCTS: Posts Q3 loss ----------------------------------- Thai-German Products recorded a 112.1 million baht consolidated loss for third quarter of this fiscal year, down 300 percent from the 461 million baht loss it posted for the same period last year. For the first nine months of the year, however, the company recorded a profit of 1.1 billion baht, a turnaround from the 1.7 billion baht loss it posted for the same period the previous year. THAI INSURANCE: Posts Q3 loss ----------------------------- Thai Insurance recorded a 2.8 million baht loss for the third quarter of this year, a major turnaround from the profit of 5.4 million baht it posted for the same period last year. For the first nine months, the company recorded a loss of 193,000 baht, compared with a profit of 26.6 million baht for the same period the previous year. THAILAND CARPET MANUFACTURING: Posts Q3 loss -------------------------------------------- Thailand Carpet Manufacturing posted a loss of 24,000 baht for the third quarter of this fiscal year, down dramatically from a loss of 29.4 million baht for the same period the previous year. For the first nine months, however, the company posted a profit of 8.1 million baht, up from a profit of 2.4 million baht for the same period the year before. THAI MODERN PLASTIC INDUS.: Posts Q3 loss ----------------------------------------- Thai Modern Plastic Industry recorded a 11.6 million baht loss for the third quarter of this financial year, down from a loss of 40.7 million baht for the same period last year. For the first nine months of the year, its loss was 306 million baht, up from a 125 million baht loss for the same period last year. THAIWIRE PRODUCTS: Posts Q3 loss -------------------------------- ThaiWire Products recorded a loss of 25.4 million baht for the third quarter of this year, a huge turnaround from a 44.7 million baht profit for the same period last year. For the first nine months, its loss totaled 83.5 million baht, compare with a profit of 121.1 million baht for the same period the previous year. TONGKAH HARBOUR: Posts Q3 loss ------------------------------ Tongkah Harbour recorded a consolidated loss of 3.5 million baht for the third quarter of this year, down from a loss of 5 million baht for the same period last year. For the first nine months, its loss was 4.4 million baht, down from a 28.6 million baht loss for the same period the previous year. TPI AROMATIC: Creditors approve rehab plan ------------------------------------------ An attorney for parent Thai Petrochemical Inudstry Plc has confirmed that affiliate TPI Aromatic's creditors approved the company's debt restructuring plan. Under that plan, TPI Aromatic's assets will be disposed and the company terminated. TRANG SEAFOOD PRODUCTS: Posts Q3 loss ------------------------------------- Trang Seafood Products recorded a 20.4 million baht loss for the third quarter of this financial year, down from a loss of 59.7 million baht posted for the same period last year. For the first nine months of the year, however, the company posted a 36.9 million baht profit, compared with a 69.7 million baht loss for the same period last year. UNION FOOTWEAR: Posts Q3 loss ----------------------------- Union Footwear recorded a 4.5 million baht consolidated loss for the third quarter of this financial year, a turnaround from a profit of 20.6 million baht for the same period last year. 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 Maria Vyrna Ni¤eza, 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 ***