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                        A S I A   P A C I F I C

                Friday, January 5, 2001, Vol. 4, No. 4

                               Headlines


A U S T R A L I A

KGRIND: Headed for Liquidation


C H I N A  &  H O N G  K O N G

BEIJING WANGFUJING:  Department Store Group Swaps Shares
CHINA NETCOM: Revenue Loss Expected
ZHENGZHOU BAIWEN:  Approved Rescue Plan Foils Delisting


I N D O N E S I A

PT PLN:  Reaches Agreement on US$290M Claim


J A P A N

KYOEI INSURANCE:  FSA Allows Sale of Prudential Policies


K O R E A

DAEWOO MOTOR:  Plans to Lay Off 6,884 Workers
HYUNDAI ELECTRONICS:  Escapes Default with Cash Infusion
SSANGYONG CEMENT:  Taiheiyo Investment Postpones $854M Repayment


M A L A Y S I A

MALAYSIAN AIR LINES:  New Partner to be Picked this Month


P H I L I P P I N E S

PILIPINO TELEPHONE:  Bond Conversion Nears Conclusion
URBAN BANK:  Four More Executives Indicted for Estafa


S I N G A P O R E

HARIMAU INVESTMENTS:  Proposes Voluntary Liquidation
VAN DER HORST: Reports $23M Net Loss


T H A I L A N D

ROBINSON DEPARTMENT STORE:  Closes Victory Monument Branch
THAI DURABLE TEXTILE:  Signs Restructuring Agreement


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

KGRIND: Headed for Liquidation
------------------------------
KGrind, a failed broadband youth portal, was caught trading while   
being insolvent and may be on the verge of liquidation, according
to a Wednesday report from the Sydney Morning Herald.

Ferrier Hodgson, in a report to creditors, found the company
violating section 268(1) of the Corporation Law for improper
accounting recordings. KGrind has been insolvent from late April
2000.

The report revealed that certain PAYE tax and staff
superannuation entitlements were left unpaid. Senior KGring
management officials were apparently aware of the situation. The
company's chief financial officer in September admitted that the
accountancy records were inadequate.

KGrind owes $120,000 in superannuation, $109,000 in annual leave
and $285,000 in employee notice payments. It failed to pay wages
totalling $160,000, the report said.


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

BEIJING WANGFUJING:  Department Store Group Swaps Shares
--------------------------------------------------------
Beijing Wangfujing Department Store (Group) Co. Ltd. will
exchange its 55 percent stake in Shuang An Plaza with Nantong
Wangfujing Department store, together with some debt rights.

The assets were valued 150 million yuan. The move will relieve
the company of the burden of loss making assets and related
expenditures, Quamnet News reported on Thursday.


CHINA NETCOM: Revenue Loss Expected
-----------------------------------   
China Netcom will slash Internet Protocol (IP) phone tariffs by
50 percent, hurting revenue in the short term, but possibley
stimulating usage and new subscriptions, according to the
Wednesday edition of the South China Morning Post.

The state media said the company had slashed tariffs on calls to
the United States and Canada to 2.4 yuan (about HK$2.24) per
minute from 4.8 yuan. Charges for calls to Taiwan, Hong Kong and
Macau were reduced to 1.5 yuan from 2.5 yuan, while charges for
calls to other international destinations fell to 3.2 yuan from
4.8 yuan, it said.

IP phone operators were allowed for the first time to charge at
will, based on their costs. Some 70 percent of China Netcom's
revenues last year came from IP phone.

The cut in rates will likely dampen investor sentiment towards
market newcomers like China Netcom and Jitong in an effort to
raise money to increase their infrastructure. Last month, China
Netcom raised US$300 million from private investors and is still
studying a planned IPO.


ZHENGZHOU BAIWEN:  Approved Rescue Plan Foils Delisting
-------------------------------------------------------
Shareholders of department store operator Zhengzhou Baiwen have
approved a rescue plan, foiling the store's plan to delist as a
public traded company on the mainland, according to the Wednesday
edition of the South China Morning Post.

Zhengzhou owed the banks 2.5 billion yuan with assets of only 600
million yuan. The main creditor, China Cinda Asset Management
filed a petition in Zhengzhou Intermediate Court to wind up the
firm.

The rescue plan will give the new owner, Sanlian Group, control
over the company with the shareholders preferring the plan rather
than filing for bankruptcy. Shareholders likewise approved the
principles of the reorganization but details -- such as which
assets would be injected into the company -- will have to be
worked out later.

Sanlian spokesman Miao Oingkai said they are trying to convince
shareholders that they can create a positive value out of assets
that now have a negative net worth.


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

PT PLN:  Reaches Agreement on US$290M Claim
-------------------------------------------  
PT PLN and Overseas Private Investment Corp. (OPIC), a U.S.
government insurance firm, had agreed on Monday to terms for
payment schemes on the US$290 million insurance claim for failed
power purchase contracts, Asia Pulse reported on Tuesday.

OPIC's insurance claim surfaced after PLN failed to pay
independent power producer (IPP) MidAmerican Energy Holding $572
million for power supplies from its geothermal power plant in
Dieng, Central Java in compensation, as ordered by an arbitration
panel in 1999. But the amount was reduced to $260 million through
negotiations with PLN.

Since the financially strapped PLN could not pay MidAmerican,
this prompted the latter to file claims with OPIC insurance.


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

KYOEI INSURANCE:  FSA Allows Sale of Prudential Policies
--------------------------------------------------------   
The Financial Service Agency (FSA) will allow Kyoei Life
Insurance to sell Prudential Life Insurance Co. policies, the
first time since filing for bankruptcy in October as part of the
firm's revival plan.

This marks the first time FSA has allowed a life insurance
company be allowed to sell other insurance products. The ban on
sales of insurance products by agents was lifted in August.

The revival plan was devised to discourage Kyoei sales personnel
from flocking to competing insurance companies and will undermine
the company's recovery, the Daily Yomiuri reported last week.


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

DAEWOO MOTOR:  Plans to Lay Off 6,884 Workers
---------------------------------------------  
Daewoo Motor will lay off 6,884 workers or 32 percent of its
workforce and hopes to save 234 billion won a year from job and
wage cuts. There are 21,789 workers including temporary workers
with 13,000 workers or 60 percent members of a union, the Manila
Times reported on Wednesday.

Among those who will be affected will be 5,494 factory workers
and 1,390 white-collar employees. Since November of last year a
total of 2,028 workers have volunteered to quit.

The union has accepted the Daewoo management layoff plan because
creditors threatened to deny them fresh loans, possibly prompting
the court to start liquidation proceedings.

The company is said to be losing 100 billion won a month and a
reported loss of 1.42 trillion won in sales of 4.66 trillion in
the first nine months of last year. Its interest-bearing debt
burden stands at $7.45 billion as of June 30 last year.


HYUNDAI ELECTRONICS:  Escapes Default with Cash Infusion
--------------------------------------------------------
The government, through Korea Development Bank, will spend about
2.7 trillion to buy 80 percent of Hyundai Electronics Industries
(HEI) Co.'s corporate bonds due this year, avoiding a possible
default on its debts, Bloomberg reported on Wednesday.

The company must repay 951 billion won of corporate bonds and 440
billion won of loans due in the first three months of this year.
Hyundai's total liabilities rose to 14.5 trillion won in 1999
when it bought rival LG Semiconductor Co.

In the second quarter, HEI needs to repay 300 billion of loans
and 200 billion won of LG Semicon's debt that it assumed. It also
has 261 billion in bonds coming due.

There will be a sale for overseas corporate bonds worth $500
million in the first quarter of this year. During the third
quarter of last year, one-third of its operating income went to
pay interest.

Howard Hwang, a Hyundai spokesman, said the government is just
giving the company a break and will eventually require the
company to repay the bonds.


SSANGYONG CEMENT:  Taiheiyo Investment Postpones $854M Repayment
----------------------------------------------------------------  
Taiheiyo Cement Corp. will increase its 28 percent stake in
Ssangyong Cement Industrial Co. by investing 300 billion won,
prompting creditors led by Chohung Bank to delay repayment on a
third of 3.5 trillion won debt, Bloomberg reported on Wednesday

Creditors will also sell 67.4 percent in Ssangyong Information &
Communications Corp. owned by the cement maker to an American
company for as much as 440 billion won.

The repayment delay and investment are crucial to reviving
Ssangyong Cement, which saw sales slump during the nation's 1998
recession.


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

MALAYSIAN AIR LINES:  New Partner to be Picked this Month
---------------------------------------------------------
The government will choose from five or six candidates, including
some foreign airlines, to be its partner in managing Malaysian
Air Lines (MAS) by the end of this month, according to the
Wednesday edition of the South China Morning Post.

The government has a 29 percent stake in the airline worth M$1.79
billion. MAS incurred losses of M$700 million last year because
of mandated low fares on domestic routes and a shrinking share in
the market.

Two of the interested foreign airlines, Swissair and Qantas
Airways, are opposed by Malaysian Prime Minister Mahatir Mohamad.

Prime Minister Mohamad wants the foreign airline to meet certain
"social obligations":  keeping domestic fares low and limiting
job cuts.


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

PILIPINO TELEPHONE:  Bond Conversion Nears Conclusion
-----------------------------------------------------  
Pilipino Telephone Corp. (Piltel) is close to concluding
negotiations with creditors to convert one-third of the P34.9
billion debt owed to exchange bonds on January 17, 2002, Business
World reported last week.

The new exchange bonds will bind the bondholders to the master
restructuring agreement (MRA), Piltel said.

The convertible bonds were originally issued in 1996 by wholly
owned subsidiary Piltel International Holdings Corp.

Napoleon L. Nazareno, Piltel president and chief executive
officer, said the formal offer to convert bonds is an important
step for the rehabilitation of the company.

The company also has debts to creditor banks and suppliers,
including Japanese firm Marubeni Corp. Piltel, with the help of
parent firm Philippine Long Distance Telephone Co. (PLDT), has
been negotiating with its various creditors for the restructuring
of its loans for almost two years now.

Piltel and creditor banks agreed to expand the coverage of the
original MRA to include Marubeni's $279 million exposure.  Under
the plan, its parent company, PLDT, will bring in $150 million
new capital for the repayment of debts. Tranche A or 50 percent
of Piltel's debts will be converted into Piltel notes. Tranche B
or 25 percent of the obligations will have a 10-year repayment
term, while tranche C will have a 15-year term.


URBAN BANK:  Four More Executives Indicted for Estafa
-----------------------------------------------------    
Four more top executives of Urban Bank were indicted for estafa
for alleged illegal withdrawal of a P5 million time deposit
belonging to San Miguel Corp. president and chief operating
officer Francisco C. Eizmendi, Jr., Business World reported last
week.

Urban Bank president Teodoro C. Borlongan, senior vice-president
Nida S. Santos, vice-president Cecilia M. Magugat, assistant
vice-president Rene Colin D. Gray, and Ortigas branch teller
Marie Cecille A. Lopez were charged for the unauthorized pre-
termination of the time deposit.

Senior State Prosecutor Estherbella N. Rances noted the admission
of Misses Santos and Magugat that they were ordered by Mr.
Borlongan to pre-terminate the Eizmendi deposits.

The four Urban Bank executives will be charge at the Makati
regional Trial Court.


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

HARIMAU INVESTMENTS:  Proposes Voluntary Liquidation
----------------------------------------------------
Harimau Investments has proposed a voluntary liquidation of its
assets, paving the way to returning cash to shareholders.

The closed-end fund needs the approval for the restructuring from
shareholders. Even though it continues to be traded on the SGX,
Harimau will eventually be delisted. The tax implications of the
liquidation of its stock holdings as an investment company was
highlighted, Business Times reported last week.

The report said tax on gains would depend on how long Harimau has
held the relevant investments. For instance, if it has held an
investment for 180 days or less, all of the gains realized on the
sale of the investment will be taxable. However, gains will not
be taxed if the investment has been held for more than 540 days.

Investments held for more than 180 days but less than or equal to
540 days will be taxed at varying rates under Section 10A.

At present the OCBC group owns 19.76 percent of Harimau but is
planning to increase its holdings by 17.53 percent through its
subsidiaries.

OCBC will act as Harimau's investment and restructuring manager
coordinating the implementation of the restructuring plan.


VAN DER HORST: Reports $23M Net Loss
------------------------------------
Van Der Horst (VDH) Ltd. has reported a net loss of $23.7 million
for the financial year ended September 30, less than the $92
million net loss of a year ago while under judicial management,
Business Times reported last week.

Turnover suffered a significant reduction by 26 percent to $18.6
million because of stiff competition, especially in the oil and
gas sector, according to a VDH statement.

Lower net losses partly resulted from a decrease in interest
costs by 76 percent to $2.6 million, which stopped after the
appointment of judicial managers in February of last year. Last
year the group also lost $61.8 million against receivables and
work in progress in Indonesia, particularly pipeline projects in
the absence of provisions.

VDH also paid its bank borrowings of US$51.6 million in 1999 from
the proceeds of the divestment of the group's interest in EAPRC
in February 1999.

Foreign exchange losses occurred mainly because of the
strengthening of the U.S. dollar against the Dutch guilder by 12
percent. One of its foreign subsidiaries has outstanding loans
worth US$55.5 million.

L& M, which has 90 percent of UDH issued capital, has an
investment agreement with VDH tied with the restructuring plan.  
The High Court of Singapore and the creditors approved the
agreement. The capital reduction and the issue of new shares to
L&M are still subject to the approval of shareholders, VDH said.


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

ROBINSON DEPARTMENT STORE:  Closes Victory Monument Branch
----------------------------------------------------------
Robinson Department Store will close its Victory Monument branch
next month, forcing the staff of 80 to be relocated to other
Robinson branches, according to the Thursday edition of the
Nation.

Robinson president Kanok Wongtrangan said Robinson tried to
negotiate a new long-term lease for the branch but the owner
wanted an annual contract. In 1999 the branch had sales of Bt180
million, a 9 percent increase from the previous year.

The company was forced to announce a debt moratorium and undergo
a debt-restructuring program following aggressive expansion
during the 1990s, incurring Bt17 billion of debt in the process.

But Robinson will reportedly have sales revenue of Bt9.1 billion,
a 14 percent increase compared to last year's Bt8 billion.

Robinson will have only 18 branches remaining nationwide.


THAI DURABLE TEXTILE:  Signs Restructuring Agreement
---------------------------------------------------------  
Thai Durable Textile Plc. signed a restructuring agreement on
December 28 with Bangkok Bank involving 84 percent of the
company's outstanding debt, the company stated in a letter to the
Stock Exchange of Thailand on Wednesday.

New equity will be provided by Wing Wah Limited and Khun So
Denduangrudee. Both investors must not own not less than 51
percent of the company. A capital reduction is also planned to
eliminate accumulated losses.

The capital reduction will be discussed in the next board and
shareholders meeting to be held in January 2001 and February
2001, respectively, with the assistance of Allen & Overy
(Thailand) Co., Ltd.



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
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Copyright 2001.  All rights reserved.  ISSN: 1520-9482.

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