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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

           Monday, December 18, 2000, Vol. 3, No. 245

                                         Headlines


* A U S T R A L I A *

BHP: Keeping HBI open the lesser of two evils
IT&e: In dire need of a restructure
RIO TINTO: Japanese partners sue on alleged contract breach
SATELLITE GROUP: Creditors vote for takeover


* C H I N A  &  H O N G  K O N G *

PAUL Y-ITC: Posts $50.59M 1H loss
SUN TELEVISION: Posts 1H loss
THEME INT'L: Scales back losses on cost cuts
TOM.COM: Restructuring to cut losses
TUNG FONG HUNG: Post 1H loss
WAH YEE TUN REST.AND COFFEE CAKE CO.:Facing winding up pet.
WALBRIGHT INT'L LTD: Facing winding up petition
WELLFUL INT'L LTD: Facing winding up petition
WHEELER TRADING CO.(HK) LTD.: Facing winding up petition
WILKER ENTERPRISES LTD: Facing winding up petition


* I N D O N E S I A *

PT DAYA GUNA: S&P lowers corporate rating to `D'


* J A P A N *

KANSAI KOGIN: Bankruptcy lies ahead?
NET ONE SYSTEMS: Shares fall on negative cashflow report
TOKYO SHOGIN CREDIT UNION: Facing bankruptcy
YAMAHA CORP: Considering closure of 2 its resorts


* K O R E A *

CHEJU BANK: Bank restructuring hits obstacle
DAEWOO HEAVY INDUS.& MACHINERY: Debt-equity swap completed
DAEWOO SHIPBLDG.& MARINE ENG.: Debt-equity swap completed
HANA BANK: Bank restructuring hits obstacle
HANVIT BANK: Bank restructuring hits obstacle
HYUNDAI GROUP: FTC fines for intra-unit transactions
HYUNDAI LIFE INSURANCE: Misses reform plan deadline
KOREA EXCHANGE BANK: Bank restructuring hits obstacle
KUMHO INDUSTRIAL: Sells office building to pay debt
KWANGJU BANK: Bank restructuring hits obstacle
KYO NGNAM BANK: Bank restructuring hits obstacle
LG GROUP: FTC fines for intra-unit transactions
PEACE BANK: Bank restructuring hits obstacle
SAMSUNG GROUP: FTC fines for intra-unit transactions
SK GROUP: FTC fines for intra-unit transactions


* M A L A Y S I A *

SUBANG JAYA DEVELOPMENT: Receives winding up petition


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

PILIPINO TEL.CORP.: Signs debt pacts with creditors


* S I N G A P O R E *

SANYO COMPRESSOR SINGAPORE: Parent closes it down


* T H A I L A N D *

PRASIT PATANA: Notifies SET of possible Q3 losses
THAI PETROCHEM.INDUS.: CBC approves rehab plan


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

BHP: Keeping HBI open the lesser of two evils
---------------------------------------------
BHP will persevere with its troubled $2.5 billion hot
briquetted iron (HBI) plant after a detailed review
concluded that keeping it open was economically viable.
The plant is not expected to make a positive contribution
to earnings until at least 2003 but BHP said yesterday that
keeping HBI operational was the "most appropriate portfolio
value decision."

"It's the most important portfolio decision at this point
in time and we believe the right one for shareholders," BHP
Minerals president Mr Ron McNeilly said.

Continued operation of HBI was expected to generate a
positive net present value of about $100 million compared
with a valuation of negative $400 million and a net
liability of $650 million if it were closed.

"It [the decision] is about managing the value of an
existing investment," BHP managing director Mr Paul
Anderson said. "The difference between immediate closure
and continued operation is more than $500 million in
value."

However, there is still no certainty that HBI will stay
open in the longer term with BHP noting that the continued
operation of the plant would be set strict technical and
financial criteria. The decision also comes amid a
weakening market for the briquettes and despite the fact
the HBI plant is yet to achieve a benchmark target of 120
days of continued production. HBI will also have a negative
impact on profit of up to $230 million until fiscal 2003.

Securities analysts and fund managers said the company had
made the right decision. "Given the information they had to
consider, it was the appropriate decision but they are
going to have to continue to look at it very closely,"
Rothschild Australia Asset Management associate director Mr
Tim Barker said.

BHP shares dipped 43c to $19.12 on news of the decision.
"The market is still trying to work it out," Zurich
Financial Services vice president of Australian equities Mr
Darko Kuzmanovic said.

BHP has committed to spend another $110 million over the
next 18 months to ramp HBI up to its capacity of 2.5
million tonnes a year. (Sydney Morning Herald 15-Dec-2000)

IT&e: In dire need of a restructure
-----------------------------------
Australian-listed IT&e has dropped steadily from a November
share price of $A0.95, closing at $A0.21 on Dec. 12. The
reasons behind the decline became clear to investors on 11
December, as the company announced a negative accounting
error and a "blow out" in costs. The unexpected resignation
of three IT&e key executives, including CEO, Jeremy Jilla,
suddenly made sense.

Although announcing a restructuring plan to improve
finances, the information technology service provider is
clearly perceived by investors as a "dot bomb." (The
Australian Financial Review 15-Dec-2000)

RIO TINTO: Japanese partners sue on alleged contract breach
-----------------------------------------------------------
Rio Tinto's relationship with its Japanese partners in the
Robe River iron ore joint venture in the Pilbara hit a new
low yesterday when the Japanese launched legal action
accusing Rio of breaching an agreement covering the $1
billion West Angelas development.

In writs filed in the Supreme Court of Victoria, the
Japanese trio Mitsui, Sumitomo and Nippon also accused Rio,
the main partner and manager of the joint venture, of
breaching its fiduciary duty to them. The legal action has
been on the cards since Rio secured control of North
Ltd with its $3.5 billion takeover bid this year.

It was the North bid that delivered Rio its 53 per cent
interest in Robe River, Australia's third-ranked iron ore
producer behind Rio's Hamersley and BHP. Under North's
control, the Robe River joint venture was aggressively
planning the development of the West Angelas iron ore
deposit as a 20 million-tonne-a-year operation.

A key component of the development was the building of a
new rail line through the Pilbara to the coast at a cost of
more than $350 million. But Rio slammed the brakes on the
West Angelas development once it was in control of North as
it wants any development of West Angelas to be built on
the basis that it shares Rio's existing rail infrastruc-
ture.

In a background note to their writs, the Japanese said the
railway was a "significant component of the West Angelas
project which was agreed to by all participants (albeit
North). The Japanese participants consider the railway to
be in the best interests of this exciting new development,"
the note said.

The Japanese said that in August the "railway works were
suspended without the Japanese participants agreement."
They said they regretted having to issue the legal
proceedings but that they were "left with no choice once
Rio Tinto unilaterally suspended the railway works."

Under North's management, the West Angelas development was
"officially recognised" with a ground-breaking ceremony on
July 17. Senior representatives of all partner companies
were involved. Rio was last night making no apologies for
is actions. It said development of West Angelas was
proceeding and that it believed that "outstanding issues
can be satisfactorily resolved through further
discussions."

It said it would continue to take action it believed to be
in the best interests of the joint venture. (The Age 15-
Dec-2000)

SATELLITE GROUP: Creditors vote for takeover
--------------------------------------------
Creditors in Satellite Group yesterday voted to allow
property developers Mr Ian Widdup and Mr Jim Byrnes to
effectively take over the company, opening the way to
receive a return on their investment.

Administrator of the listed entity, Mr Tony McGrath of KPMG
confirmed that creditors voted "overwhelmingly" to allow Mr
Widdup's Finnbell and Mr Byrnes' Consolidated Byrnes
Holding to acquire 90.1 per cent of Satellite. The
remaining 9.9 per cent stake will be held by existing
shareholders.

Mr McGrath is now preparing a deed of company arrangement
to "forgive all debts owed by the Satellite group". The
media assets are not included in this deal. A meeting of
Satellite shareholders is to be held to vote on the
proposal in the new year.

Under the plan, $200,000 will be paid to the administrator
to pay off Satellite's debts, allowing an effective
"backdoor" listing of new assets in the Satellite shell. It
is envisaged about $360 million worth of new assets will be
transferred. The revamped company will have an initial
capitalisation of about $100 million.

"Up until today, the recommendation was for liquidation. We
have offered a solution which not only ensures that
shareholders do not automatically lose all of their
investments, but in fact adds value back to shareholders,"
Mr Widdup said. (Sydney Morning Herald 15-Dec-2000)


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

PAUL Y-ITC: Posts $50.59M 1H loss
---------------------------------
Paul Y-ITC Construction Holdings Ltd. recorded an interim
loss of $50.59 million for the six-month period ended Sept.
30. That was quite a turnaround from the $282,000 profit
posted in the same period the previous year. Turnover was
$5.337 billion, while the loss per share was 5.2 cents. A
one cent dividend was declared.

SUN TELEVISION: Posts 1H loss
-----------------------------
Satellite television operator Sun Television Cybernetworks
Holdings posted a net loss of HK$63.1 million for the six
months ended Sept. 30. The company said it mainly was due
to start-up investment on its newly launched theme channel.

The company, formerly Leung Kee Holdings until its takeover
by Sun Television in March, recorded a net loss of HK$8
million last year while primarily engaged in construction.
Turnover was HK$17.9 million during the period, compared
with HK$35.64 million a year ago.  Of that turnover, HK$3.3
million was derived from media business since the March
takeover.

Losses per share were 1.21 HK cents, up from 0.94 HK cent
last year.  No dividend was recommended.  The HK$63.1
million net loss included the HK$35 million paid-in cash to
acquire a 51 per cent stake in Macau Travel Channel from
Kwok Luen Programming, operator of Macau Travel Channel for
Macau Satellite Television, executive chairman Bruno Wu
Zheng said.

Mr Wu said Sun TV would re-launch Macau Travel Channel as
Sun TV's second theme channel to provide additional avenues
for generating revenue with limited investment. The
company's first channel is its primary history and
documentary offering, which was launched in August.

Since the acquisition of Leung Kee in March, Sun TV has
invested about HK$150 million in building its television
broadcasting business, which contributed most of the
losses, Mr Wu said.  However, he said about 90 per cent of
the start-up costs for the television broadcasting business
had been committed in the six months to Sept. 30. These
included programme acquisition, construction of a
production centre, all capital expenditure and marketing
expenses.

"The capital expenditure in the second half-year would be
substantially reduced," Mr Wu said. "The net losses would
be substantially below our [full-year loss] estimation."

Sun TV projected net losses would be HK$120 million for the
full year to March 31.  Sun TV has HK$137.4 million cash on
hand. (South China Morning Post 15-Dec-2000)

THEME INT'L: Scales back losses on cost cuts
--------------------------------------------
Extensive cost reduction helped fashion retailer Theme
International Holdings to trim but nonetheless post a net
loss of $6.05 million for the half year ended Sept. 30. The
amount was down 65.24 percent from the same period the
previous year.

"This is a relief after the heavy financial burden that has
plagued the company for years," said Theme's new executive
director Lam Foo-wah.

The once debt-laden fashion retailer's improved financial
position was a result of the implementation of total
quality management (TQM) and tighter cost control, Mr Lam
said yesterday. In addition to closing down four outlets,
the company earlier laid off more than 30 staff, bringing
its number of workers down to 50, in a bid to lower costs,
Mr Lam said.

The overall cost-cutting programme saved some $30 million
for Theme, Mr Lam said, adding that he hoped the firm would
be back in the black again in the near future. The firm
confidently expected to see a further 20 per cent reduction
in costs next year.

Its operating loss dropped 48.17 per cent to $5.52 million
for the half year ending September 31. However, turnover
shrank 12.26 per cent to $106.36 million for the period,
compared to $121.22 million for the same period last year.

Theme executive director Raymond Wong Shing-loong said the
drop in turnover was mainly due to a shortage of funds and
insufficient raw materials purchasing to facilitate its
operation at that time. Theme's gross profit margin was
70.4 per cent for the six months to September, up from 65.9
per cent last year.

The company lost more than $1 billion in the two years to
March 31, 1999. It was subsequently taken over by mainland-
based silk clothing maker High Fashion International (0608)
with a $165.5 million debt-for-equity swap in August of
this year.

The former chairman of Theme, Kenneth Lai Ngan-long, was
declared bankrupt and under law could only act as a
consultant for the company. Facing weak retail consumption,
Mr Lam said Theme plans to lower its average product price
by 15 per cent to 20 per cent to boost sales.

But Mr Lam added they are still upbeat on their business in
the longer term and that the company has plans to open 60
new shops in due course. Up to 20 of the new shops that are
under negotiation would be set up in China. Theme's
business foothold is in the Greater China region. It now
has 14 retail outlets in Hong Kong, 52 in China and 41 in
Taiwan.

Loss per share was 0.65 cent for the six months to
September 30, compared with 2.77 cents loss per share for
the same period in 1999. The firm did not declare an
interim dividend. Theme's improved results did not have any
impact on its stocks, which closed unchanged at $0.10
yesterday. (Hong Kong iMail 16-Dec-2000)

TOM.COM: Restructuring to cut losses
------------------------------------
Tycoon Li Ka-shing's Internet company Tom.com is
retrenching 10 staff and shuffling another 20 into other
divisions of Mr Li's business empire, in a move described
by a spokesman as "restructuring."

A spokesman confirmed that about 10 staff would be sacked
for not meeting performance targets as part of an annual
internal review. Twenty others will be relocated to
Hutchison Telecom and other parts of the Hutchison
conglomerate.

"These are definitely not layoffs," stressed a spokesman.
"This is not a layoff exercise."

Tom.com laid off 80 staff in July and 50 in October to
reduce costs in the face of growing investor disquiet. But
losses still widened 10 per cent over the third quarter to
$163 million. Tom.com burnt through $42.3 million per month
between July and September, down from $55.3 million in the
preceding three months.

This latest cost-cutting should see cash-burn fall to under
$30 million per month, the company said. The Tom.com
spokesman said employees could take full compensation
packages if they did not want to move over to other
Hutchison divisions.

"We try to find posts for the staff elsewhere. It's
possible the staff won't take that opportunity and will
voluntarily find their own jobs, or the receiving
department won't take them. Then we would pay out the
compensation," she said.

The stock tumbled more than 3 per cent earlier in the week
after stockbrokers ING Barings issued a sell rating on the
stock citing its high cash expense rate, its lack of
business focus and its failure to compete with other China
portals such as Netease, Sina and Sohu. Analyst Douglas Kim
said it would be three years before it made a profit.

Tom.com closed at $2.525 yesterday, its lowest close of the
year. Barings cut their price target for the stock from $7
to $1. Tom.com is one of a handful of large Chinese-
language Internet portals competing for market share in the
fast-growing Greater China market.

Alongside Sina.com, Sohu.com and Chinadotcom, Tom.com has
ambitions to be China's Yahoo! But portals have been
disappointed by sluggish Internet advertising and
negligible business-to-consumer e-commerce.
None has yet broken even.

Tom.com's revenue for the first half of 2000 was a paltry
$6 million. Rival Chinadotcom's advertising revenue
actually dropped last quarter. Tom.com's response to
growing investor clamour for revenues was to spend $400
million on controlling stakes in advertising firm Yang
Chang Press and mainland sports site Shawei.com, funded by
a $385 million share placement.

Entrepreneur Jimmy Lai Chee-ying's decision to close down
Internet e-Commerce firm AdMart this month with 334 job
losses underlined the trouble businesses have had making
money online. Mr Lai lost $936 million in the venture,
according to analysts. In other dotcom layoffs,
Hongkong.com sacked 47 workers and Renren.com dismissed 102
workers in August. (Hong Kong iMail 16-Dec-2000)

TUNG FONG HUNG: Post 1H loss
----------------------------
Tung Fong Hung (Holdings) Ltd., a Chinese pharmaceuticals
distributor, recorded a net loss of HK$19.36 million for
the six months ended Sept. 30. That was down from the
HK$66.26 million net lost it posted for the same period a
year earlier. Loss per share was 3 HK cents compared with
24 HK cents for the previous year's quarter. Revenue fell
13 percent to HK$136.74 million. No interim dividend
will be distributed.

WAH YEE TUN REST.AND COFFEE CAKE CO.:Facing winding up pet.
-----------------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on February 7, 2001, on the
petition of Lai Choi Yat and Wong Yip Yuk for the winding
up of Wah Yee Tun Restaurant and Coffee Cake Co. Limited. A
notice of legal appearance must be filed on or before
February 6.

WALBRIGHT INT'L LTD: Facing winding up petition
-----------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on February 14, 2001, on the
petition of Nam Ngai for the winding up of Walbright
International Limited. A notice of legal appearance must be
filed on or before February 13.

WELLFUL INT'L LTD: Facing winding up petition
---------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on January 10, 2001, on the
petition of Sin Hua Bank Limited for the winding up of
Wellful International Limited. A notice of legal appearance
must be filed on or before January 9.

WHEELER TRADING CO.(HK) LTD.: Facing winding up petition
--------------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on February 27, 2001, on the
petition of Dow Corning Asia Corporation trading as Down
Corning Asia for the winding up of Wheeler Trading Company
(Hong Kong) Limited. A notice of legal appearance must be
filed on or before February 26.

WILKER ENTERPRISES LTD: Facing winding up petition
--------------------------------------------------
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on February 28, 2001, on the
petition of Chan Man Lai for the winding up of Wilker
Enterprises Limited. A notice of legal appearance must be
filed on or before February 27.


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

PT DAYA GUNA: S&P lowers corporate rating to `D'
------------------------------------------------
Standard & Poor's lowered its long-term corporate credit
rating on publicly listed Daya Guna Samudera (DGS) to `D'
from selective default.

At the same time, Standard & Poor's lowered its rating on
the $225 million in notes due 2007 and issued by DGS
International Finance Co. BV -- guaranteed by Daya Guna --
to `D' from double-'C' following the failure of the company
to make full payment of its $11.25 million coupon due on
Dec. 1, 2000.

Although Daya Guna paid $5 million on Dec. 1, 2000, and
expects to pay the remaining $6.25 million on Jan. 5, 2001,
that date will breach the 30-day grace period allowed under
the US dollar note documents, and constitute a default on
the note issue. The company managed to sell some idle
vessels to secure the funds required to pay the interest
due (as it did for June's interest payment), but the
proceeds from the sale are being made in two stages, only
one of which has been effected.

As a result, Daya Guna will only be able to complete the
payment in January 2001, after which, Standard & Poor's
will restore the corporate credit rating on the company to
selective default. It reflects the company's failure to
repay short-term loans of $83m (not rated) to its bank
creditors since 1999 and the rating on the notes to double-
'C', Standard & Poor's said.

Daya Guna, Indonesia's largest integrated fishing company,
suffers from severe liquidity problems and a lack of
financial flexibility. The weak credit quality of
Indonesia's banking system and volatility in the rupiah
have severely restricted the company's funding options,
forcing it to fund most of its own working capital.

The company faces negative operating cash flows due to the
ongoing social unrest close to its main fishing grounds in
the Arafura Sea and its processing operations at Benjina
and Kimaan in the Maluku region of eastern Indonesia.
Consequently, production levels have suffered signifi-
cantly.

Funding support from major shareholder, PT Bintuni Minaraya
(51% owner of DGS), which is facing liquidity problems of
its own, is unlikely, Standard & Poor's said. Both Daya
Guna Samudera and Bintuni Minaraya have been delisted from
the Jakarta Stock Exchange. (Indoexchange News 15-December-
2000)


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

KANSAI KOGIN: Bankruptcy lies ahead?
------------------------------------
According to a number of recent media reports, Japanese
financial regulators are set to start bankruptcy procedures
against the unlisted Japanese credit union Kansai Kogin.

The Financial Reconstruction Commission (FRC) will send an
administrator to start the process of dealing with the
credit union's failure, following a recent inspection that
revealed the credit union was insolvent due to bad loans,
the reports said. Based in Osaka, western Japan, Kansai
Kogin is the nation's largest credit union with 967.4
billion yen ($8.64 billion) in outstanding loans and 1.09
trillion yen in deposits as of the end of March.

Kansai Kogin, whose customers are largely ethnic Koreans,
had rapidly expanded via a series of mergers with other
financial firms in the region.  A Kansai Kogin spokesman
declined to comment on the report, adding that the credit
union will hold a news conference at 4:30 p.m. (0730 GMT).

An FRC spokesman also declined to comment on the reports.
The Nihon Keizai Shimbun reported on Friday that another
troubled Japanese credit union, Tokyo Shogin Credit Union,
would also be forced to start bankruptcy proceedings. No
comment was immediately available from the firm.

Reports of those failures, which came amid rumours that a
Japanese regional bank was in trouble, further hurt
sentiment towards the yen in the foreign exchange market.
The yen was already weak against other major currencies on
concerns about the Japanese economy. ($1=111.91 Yen)
(Reuters 15-Dec-2000)

NET ONE SYSTEMS: Shares fall on negative cashflow report
--------------------------------------------------------
Shares of Net One Systems Co. fell as much as 11 percent
after a newspaper reported the company is likely to post a
negative group operating cash flow for the year ending
March 31 due to a delay in client payments.

The computer network systems service provider could post a
negative group operating cashflow of 12 billion-13 billion
yen ($107 million to $116 million), according to an article
in the Nihon Keizai.  Net One Systems traded as low as 3
million yen, down 360,000 yen. The shares traded recently
at 3.15 million yen, a 5.1 percent loss.

TOKYO SHOGIN CREDIT UNION: Facing bankruptcy
--------------------------------------------
Tokyo Shogin Credit Union, one of the largest credit
cooperatives in Japan financing Korean businesses, is
facing collapse under huge bad debts.

The Financial Reconstruction Commission is set to send
administrators to Tokyo Shogin Credit Union and Kansai
Kogin, another Japanese company heavily involved in
financing Korean credit cooperatives, according to one of
the agency's Chief Cabinet Secretary Yasuo Fukuda.

Asked about rumours the South Korean government could bail
out Kansai Kogin in Osaka, western Japan, and Tokyo-based
Tokyo Shogin Credit Union, Fukuda told confirmed
discussions were happening about that possibility, but he
said he had "not heard of details."

The government will protect all the deposits at the credit
cooperatives, according to a Jiji Press report. But Kansai
Kogin hit back, saying "If the Financial Reconstruction
Commission takes action under the (corporate)
rehabilitation law, we will begin procedures in court," the
cooperative said in a statement. "We cannot help but
declare that the Japanese authorities have acted brutally
and are attempting to force the collapse of the South
Korean community in Japan."

The failure of the two cooperatives set up by ethnic
Koreans would be a blow to Japan's Korean business
community, the evening edition of the Asahi Shimbun
said. An estimated 700,000 ethnic Koreans live in Japan
with the largest number based around the western city of
Osaka, the main city of the Kansai region.

Authorities notified Kansai Kogin and Tokyo Shogin Credit
Union in September that their capital-to-asset ratios had
fallen below four percent, the level deemed minimum for
sound lending, Jiji said.

"According to our own assessment, our capital adequacy
ratio was 4.58 percent, well above the four percent line
that credit cooperatives are supposed to pass," a Kansai
Kogin statement said. "But later, authorities unilaterally
provided their own calculations, ignoring our own
assessment. Authorities forcefully classified doubtful
loans as bad loans."

Both firms, set up in the 1950s, had massive bad loans
dating from real-estate investments made during Japan's
"bubble economy" years in the 1980s, Jiji said. "Kansai
Kogin is also alleged to have extended dubious loans to its
affiliates," it added. (Agence France Presse  15-Dec-2000)

YAMAHA CORP: Considering closure of 2 its resorts
-------------------------------------------------
Yamaha Corp. is considering closing two of its seven resort
facilities, including Japan's largest equestrian club, in a
restructuring move calculated to stem the resort units'
tide of red ink.

Yamaha has averaged an annual operating loss of 1 billion
yen to 2 billion yen in recent years from its resort
operations, which also include skiing and marine sports
facilities. According to company president Shuki Ito,
Yamaha will look at whether and which of its seven resort
facilities "should be operating three to five years later."

One of the facilities Yamaha is considering closing is
Tsumagoi, an equestrian club in Kakegawa, Shizuoka
Prefecture, considering the top such club in Japan. Ito
says the company must balance its reputation with its
proftiabliity. Built on 1.7 million square meters and
opened in 1974, the equestrian club can accommodate
international competitions.

Another closure Yamaha is considering is its Nemu no Sato
hotel and cottage complex in the Ise-Shima National Park
area in Mie Prefecture. Nemu no Sato has a music hall and
sport facilities and can accommodate 800 people. Operations
at the complex began in 1967, and have become costly.


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

CHEJU BANK: Bank restructuring hits obstacle
HANA BANK: Bank restructuring hits obstacle
HANVIT BANK: Bank restructuring hits obstacle
KOREA EXCHANGE BANK: Bank restructuring hits obstacle
KWANGJU BANK: Bank restructuring hits obstacle
KYO NGNAM BANK: Bank restructuring hits obstacle
PEACE BANK: Bank restructuring hits obstacle
-----------------------------------------------------
The government-led drive for restructuring the banking
sector has run into trouble as merger talks between Kookmin
Bank and Housing and Commercial Bank (H &CB) are in danger
of falling apart.

Early yesterday morning, Kookmin President Kim Sang-hoon
made a bombshell announcement to suspend the merger
negotiations with H &CB due to strong opposition from its
labor union.  Kookmin's sudden move shocked bureaucrats
expecting the marriage of the nation's two strongest banks
to give a shot in the arm to government efforts to overhaul
the banking industry and thus put it back on track.

Although top economic policymakers have reiterated their
hands-off stance toward the consolidation of healthy banks,
they have hoped that mergers among strong players would
prompt weak banks to follow suit, thus leading to a
voluntary big bang in the banking sector.  Industry
watchers said that the government's restructuring scenario,
or inducing voluntary mergers among healthy banks and
placing weak ones under a financial holding company, may
end up in smoke in the wake of Kookmin's announcement.

"Since Kookmin and H&CB are the top two players in the
nation, a failure of their marriage could deal a severe
blow to the government's blueprint for second-phase
financial restructuring," an analyst said.

Government officials also voiced concern that Kookmin's
discontinuation of the merger negotiations may have an
immense negative impact on the second-stage bank
restructuring program as well as the nation's push for
economic reform as a whole.

"Should a merger of Kookmin and H &CB be aborted due to
labor opposition, it would negatively affect the banking-
sector reform," said an official at the Financial

Supervisory Commission overseeing the nation's financial
and corporate overhaul.  It is problematic for the Kookmin
Bank president to announce a halt of the merger talks
simply because its labor union is against the move. "Labor
and management should solve the problem of layoffs
concomitant with a merger," the official said

The discontinuation of the merger talks between Kookmin and
H &CB is also feared to have a negative effect on the
merger between KorAm Bank and Hana Bank, and the marriage
of Shinhan Bank and Cheju Bank, a troubled regional bank.
The merger talks between KorAm and Hana is stalled as its
controlling shareholder, the J.P. Morgan-Carlyle Group
consortium, remains lukewarm about the proposed marriage
between the two mid-size healthy banks.

Although KorAm President Shin Dong-hyock says that he is
actively persuading the U.S. consortium to agree on the
marriage, analysts predicted that it remains to be seen
whether the J.P. Morgan-Carlyle consortium will accept it.
Last month, the U.S. consortium acquired the largest 40.1
percent stake in KorAm by making a capital investment of
444.7 billion won.

Shinhan and Cheju have also run into a stumbling block in
their negotiations on a merger, the first of its kind
between a strong bank and a weak one, as Cheju's labor
union is strongly bucking against the move.  In addition,
Kookmin's move is feared to hurt a government plan to put
banks injected with public funds under the same roof of a
financial holding company.

The government originally planned to place five weak banks
- Hanvit, Korea Exchange, Peace, Kwangju and Kyongnam -
under the envisioned holding company but the plan has hit a
snag as Commertzban, or the second largest shareholder of
Korea Exchange Bank, has postponed its decision on the
issue.  Due to the German bank's foot-dragging, the
government intends to put the remaining four banks under
the holding company, but labor unions of the four banks are
stepping up their opposition to expected layoffs and office
reductions.

Despite the unexpected development, the government is
determined to launch a financial holding company as
planned. "The government will set the holding company in
motion in February next year, which will have Hanvit,
Peace, Kwangju and Kyongnam under its wing," an FSC
official said. (Korea Herald 15-Dec-2000)

DAEWOO HEAVY INDUS.& MACHINERY: Debt-equity swap completed
DAEWOO SHIPBLDG.& MARINE ENG.: Debt-equity swap completed
----------------------------------------------------------
Creditors have completed a debt-for-equity swap worth 2.21
trillion won for two companies spun off from now defunct
Daewoo Heavy Industries.

According to its main creditor Korea Development Bank,
creditors granted a debt-for-equity swap of 1.17 trillion
won to Daewoo Shipbuilding & Marine Engineering, and
another of 1.04 trillion won for while Daewoo Heavy
Industries & Machinery. Creditors also increased the
shipbuilder's capital by 747 billion won. They expanded the
machinery maker's capital by 627 billion won. The two
companies now plan to list their stocks on the Korea Stock
Exchange by year end.

HYUNDAI GROUP: FTC fines for intra-unit transactions
LG GROUP: FTC fines for intra-unit transactions
SAMSUNG GROUP: FTC fines for intra-unit transactions
SK GROUP: FTC fines for intra-unit transactions
----------------------------------------------------
South Korea's antitrust body yesterday imposed some US$37
million (S$64.4 million) in fines on the country's four
largest chaebols for illegal cross-unit transactions. The
penalties for the Hyundai, Samsung, LG and SK conglomerates
totalled 44.4 billion won (S$64 million), the Fair Trade
Commission (FTC) said.

The FTC said the unfair financial transactions, aimed
mostly at tightening the control of founding families,
totalled 2.5 trillion won in value.  The widespread illegal
transactions between sister units included trading
securities at below-market prices, it said.  The FTC said
Hyundai group sold unlisted shares to its former chairman
Chung Mong Hun at below-market prices, allowing him to
secure 300 million won in illegal gains.

Samsung chairman Lee Kun Hee also sold securities to his
son Lee Jae Yong at abnormally low prices, allowing the
junior Lee to secure 6.4 billion won in illegal gains, it
said. The penalties imposed were 14.3 billion won against
Hyundai, 10 billion won for Samsung, 12.3 billion won for
LG and 7.8 billion won for SK.

In a seperate measure, the FTC filed a formal complaint to
prosecutors over unfair transactions for the first time.
The FTC said the four chaebols had set up eight
"camouflaged" units, with Samsung holding three
unregistered subsidiaries.
Some defiant chaebols are now reported to be preparing a
counter lawsuit against the FTC's latest move. (AFP,
Straits Times  15-Dec-2000)

HYUNDAI LIFE INSURANCE: Misses reform plan deadline
---------------------------------------------------
Hyundai Life Insurance failed to present a recapitalization
plan to the Financial Supervisory Commission by the Dec. 14
deadline.  The company has asked for an extension of the
deadline to the end of this month.  Hyundai Life sought
capital injection by other Hyundai Group finanical units,
but these firms could not help because they also face
similar funding difficulties, an industry watcher said.

The insurance company is highly likely to be declared
insolvent, since the FSC will not accept its request for
more time, the source said. The FSC will convene a meeting
of its members Dec. 22. (Korea Herald 16-Dec-2000

KUMHO INDUSTRIAL: Sells office building to pay debt
---------------------------------------------------
Kumho Industrial, formerly Kumho Tire, has sold off its
building in Sorin-dong, central Seoul, to Global Realty
Advisors (GRA) of Singapore for W38 billion and plans to
use the proceeds to repay debt.

The building currently is used by Kumho Petrochemical,
which will move to the new Kumho Group central office
building in Kwanghwamun. The group also plans to sell off
its new Kwanghwamun building, with negotiations already
under way with a potential foreign buyer. Once the building
is old, the group plans to lease it back from the buyer.
GRA is Prudential Insurance's real estate investment arm
for Asia.


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

SUBANG JAYA DEVELOPMENT: Receives winding up petition
-----------------------------------------------------
Faber Group, owner of the Sheraton hotel chain in Malaysia,
said one of its property units had received a winding-up
suit from a supplier over unpaid dues. Closely held Subang
Jaya Development was sent a petition by Perabot Van Hin, a
Malaysian furniture company.

Faber company executives were not available for comment.
Faber, the hotel unit of Malaysia's biggest industrial
group Renong, said on Wednesday it will complete its debt
rescheduling by Dec 31. The completion of the plan, which
includes reducing Faber's shares outstanding by half, would
allow the stock to resume trading next Friday, the company
said. Trading has been halted since Nov 17.

"The outlook for the group will be positive once the
restructuring is in place," chairman Abdullah Mohd Yusof
said.

Faber sold RM1.56 billion (S$717 million) of bonds and
RM233.7 million of loan stocks to repay money owed to
banks.  It said in its latest annual report that it owes
creditors RM1.8 billion. It plans to sell some of their
hotels to repay bondholders later. Mr Abdullah said they
have not decided which hotel to sell. (Bloomberg News,
Straits Times  15-Dec-2000)


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

PILIPINO TEL.CORP.: Signs debt pacts with creditors
---------------------------------------------------
Pilipino Telephone Corp., a subsidiary of Philippine Long
Distance Telephone Co., has signed a series of agreements
with its creditor banks and Marubeni Corp. of Japan for the
restructuring of the mobile phone company's debts.

The agreements expanded the coverage of the original Master
Restructuring Agreement signed on June 21, Piltel said in a
statement. Marubeni yesterday signed the amendment and
accession agreement signifying the Japanese firm's official
entry into the restructuring process.

This followed the signing of the same agreement on Dec. 12
by Piltel and its creditor banks which showed the latter's
formal acceptance of the inclusion of other creditors in
the restructuring process. The other creditors include
Marubeni, trade creditors, convertible bondholders and
preferred shareholders.

On top of the MAA, Marubeni and Piltel also signed a
restructuring agreement and an amendment to the original
build-transfer agreement. The terms of the restructuring
agreement are similar to those offered to the creditor
banks while the amendment to the BTA fixes the final
contract price upon which the restructuring will be based.
The Piltel-Marubeni agreement involves the restructuring of
about $279 million in debts.

"After this, dealing with the bondholders would be much
easier," said an industry source.

Piltel's total debts amounted to about P34.9 billion. Its
creditors are divided into three groups: the creditor
banks, Marubeni Corp. of Japan and the bondholders. Each
group's exposure is approximately a third of the total
debts. Marubeni's $279-million exposure to Piltel involved
a turnkey telephone rollout project in Mindanao.

In October, after several months of unfruitful talks,
Marubeni finally signed a memorandum of understanding to
restructure Piltel's debt. Piltel signed its MRA with the
banks involving some $332 million early this year. Under
the MRA, half of the debt to banks will be converted into
peso-denominated Piltel preferred stock convertible into
preferred stock in Philippine Long Distance Telephone Co.

About 25 percent of the debts are payable in 10 years under
a "bullet" repayment scheme. The other 25 percent of the
liabilities will have a 15-year maturity inclusive of a
grace period of four years. Piltel president Napoleon
Nazareno said in an earlier interview that the company was
set to submit next week its exchange bond offer to
bondholders.

The company has decided against offering the bondholders a
simplified version of its proposal to creditor banks.
Nazareno earlier said Piltel was thinking of simplifying
the proposal for the bondholders by setting the maturity
period for the 50 percent of the debts at 13 years, instead
of 10 years and 15 years. He also said Piltel could expect
turnaround in its financial performance within three to
four years after the start of the restructuring program.

From the original plan of wrapping up its debt-
restructuring plan by end-December this year, the company
had extended its deadline to March or April next year
because negotiations with the company's bondholders have
been taking some time. Nazareno also said that with the
peso fall in recent months, Piltel's debts could have
ballooned from P34.9 billion to about P40 billion.
(Philippine Daily Inquirer  16-Dec-2000)


=================
S I N G A P O R E
=================

SANYO COMPRESSOR SINGAPORE: Parent closes it down
-------------------------------------------------
Sanyo Compressor Singapore (SCS), a plant which makes
compressor units for air-conditioners, has been shut down
as part of restructuring by the parent company, amid
concerns that the business would lose money on declining
prices.

The workforce of 150 workers is to be laid off. Mr Derek
Wentz of Sanyo Electric's corporate finance department in
Tokyo, told The Straits Times yesterday that production
shut down last Friday. SCS is to be liquidated by the end
of next year, he said. Production will be shifted to Sanyo
Compressor Indonesia, at Bekasi, east of Jakarta, where
production is due to start in April.

Sanyo Electric said the Singapore company would follow
official regulations by providing each of the 150 laid-off
employees with a compensation package to be determined by
the Singapore Government. Details of the retrenchment
package could not be made known yet.

The SCS plant at Benoi Crescent would be sold some time
next year. The shut down was part of a sweeping
restructuring by Sanyo Electric of its white goods
operations, the Japanese newspaper Nihon Kezai Shimbun
quoted sources as saying.

The newspaper stated that in addition to the Singapore
closure, the company will shut Sanmex SA de C.V, a maker of
vacuum cleaners in Mexico and Sanyo California, which sells
the machines in the US. SCS was unavailable for comment.
(Straits Times  16-Dec-2000)


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

PRASIT PATANA: Notifies SET of possible Q3 losses
-------------------------------------------------
Hosptial chain operator Prasit Patan has notified the Stock
Exchange of Thailand of investment losses totaling Bt3.757
billion. Aside from investment losses at its two
subsidiaries - Phuket Paradise Co. and Dulwich nternational
- the company posted a total loss of Bt 1.2 billion.

Prasit Patana said the value of buildings and construction
works were reduced to Bt 2.55 billion, causing the company
to post a net loss of Bt 7.3 billion between July and
September. That was up from a net loss of Bt 620 million
for the same period the previous year.

THAI PETROCHEM.INDUS.: CBC approves rehab plan
----------------------------------------------
Creditors jumped a major hurdle Friday in the fight to
rehabilitate Thailand's most indebted company, Thai
Petrochemical Industry Plc (TPI), when the Central
Bankrtupcy Court approved the firm's restructuring plan
after the Supreme Court denied the petition of TPI chief
executive officer Prachai Leophairatana.

Prachai objected to the Central Bankruptcy Court judges
presiding over the endorsement of TPI's debt restructuring
plan, citing a possible conflict of interests. A Supreme
Court statement read aloud at the Central Bankruptcy Court,
said Prachai's petition was neither valid nor in accordance
with Civil Law.

Prachai filed a new petition asking the Central Bankruptcy
Court to further postpone its decision on the restructuring
plan until criminal charges filed by him against Effective
Planners have been investigated. The court denied the
petition.

Central Bankruptcy Court deputy chief justice Kraisorn
Barameeuaychai confirmed that the court formally endorsed
TPI's restructuring of 3.2 billion dollars in debt. The
court OK, following creditors' earlier approval of the
plan, allows TPI to begin a process of rehabilitation and
repayment of its mountain of debt. The court must meet
again to discuss how to restructure TPI's subsidiaries.

The approval is a blow to TPI chief executive Prachai
Leophairat, who had been attempting to delay the decision,
which will result in his stake in Southeast Asia's largest
petrochemical firm being drastically cut. Creditors will
swap missed interest payments for shares in the company as
part of the restructuring.

About 2,000 disgruntled TPI employees staged a rally
outside the court as the bench was ruling on the
restructuring plan, which they fear will mean layoffs
for some of the company's 20,000 workers. The protests were
peaceful, as 700 police kept order and the demonstrators
dispersed by the early afternoon, vowing to hold another
rally soon at one of TPI's plants.

The demonstrators charged that the ruling showed that the
Thai government was allowing foreign creditors to take
advantage of TPI and possibly sell off non-core assets.
TPI's creditors, which include Bangkok Bank, have
reportedly said that there would not be any layoffs in
parts of the company which are retained.

Uncertainty over the case, which is seen as a test of
Thailand's poor debt-repayment culture as well as an
indicator of efforts to reform the Thai economy
in general, had recently hampered trade on the local
bourse. Shares on the Stock Exchange of Thailand (SET)
closed the morning session 0.9 percent higher after the
court threw out a petition by Prachai to delay the
ruling by having the judges replaced.

Bangkok Bank, the most heavily exposed of TPI's creditors,
rose 0.50 to 26.25 baht in the morning. TPI was unchanged
at 3.70 baht. TPI became a major casualty of the 1997
economic crisis when the baht collapsed, leaving it unable
to pay back the heavy load of unhedged dollar loans
it took out in the early 1990s. The firm was ruled
insolvent in March but its management was allowed to remain
in control until creditors agreed on a rehabilitation
coordinator. (Agence France Presse  15-Dec-2000)


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

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Copyright 2000.  All rights reserved.  ISSN: 1520-9482.

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