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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

            Friday, January 26, 2001, Vol. 4, No. 19

                          Headlines

A U S T R A L I A

FRANKLINS:  Two Firms Deny Role in Break-up
LUCENT TECHNOLOGIES:  Massive Layoffs Seen


C H I N A  &  H O N G  K O N G

BESTWAY:  Posts $9.378 Net Loss
FUIJIAN:  Fails to Pay Samurai Bond


I N D O N E S I A

BANK MANDIRI:  Can Pay $560M Foreign Debts


J A P A N

CHIYODA LIFE: Negotiations Delayed
ORICO LIFE:  Prudential Holdings Buys Shares
TAISHO INSURANCE:  Two Firms Interested


K O R E A

DAEWOO SHIPPING:  Will Repay 200B Won in Loans
SSANGYONG MOTOR:  Creditors Extend Workout Program


M A L A Y S I A

KUALA LUMPUR INDUSTRIES:  Gets a RM300M Capital Infusion


P H I L I P P I N E S

BW RESOURCES:  Megaworld Expects to Take Over
MIMOSA ESTATE:  Leisure Complex to Be Privatized Soon


T H A I L A N D

COUNTRY FINANCE: Will Receive a Portion of Claims
KRISDAMAHANAKORN:  Fails to Meet Debt Restructuring Goals
NAWARAT PATANAKARAN:  Submits Reorganization Plan


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

FRANKLINS:  Two Firms Deny Role in Break-up
-------------------------------------------   
Germany's Aldi and Wal-Mart of the U.S. have denied they were
part of The break-up of supermarket chain Franklins.         

Franklins had been struggling for the past two years with
accumulated losses of $160 million, according to the Thursday
issue of the Sydney Morning Herald.

Some 290 Franklins stores are being pursued by bidders Coles Myer
and Woolworths and working on deals based on regional lines.

Jose Gomez, Wal-Mart's international corporate affairs spokesman,
said suggestions that the company was interested in taking over a
clutch of Franklins outlets in NSW and Queensland were "market
rumors and speculation."

Dutch food group Ahold, Tesco of the U.K. and local chains
Foodland and Metcash are others mentioned in connection with the
imminent sale of Franklins, a subsidiary of Hong Kong's Dairy
Farm.

Negotiations with Dairy Farm will be finalized after the results
of a strategic review will be revealed by the end of March.


LUCENT TECHNOLOGIES:  Massive Layoffs Seen
------------------------------------------
Lucent Technologies, a phone and networking company, will lay off
some 16,000 employees as part of a major restructuring to
"significantly improve cash flow," resulting in a US$2 billion
savings for the company.

The company announced that it might post a pro forma loss of
$US1.02 billion for its first fiscal quarter ended December 31
last year. The result came on the back of a 26 percent slump in
revenue to $US5.84 billion for the first fiscal quarter of 2001,
according to the Thursday issue of Fairfax I.T.

The layoffs will be made through a combination of forced
management actions and attrition. The employees will be informed
anytime between February 15 and early March.

Affected departments will be marketing, sales and corporate
center functions reducing certain manufacturing centers.

Lucent has more than 1,450 employees in Australia in Adelaide,
Brisbane, Canberra, Gold Coast, Melbourne, Sydney and Perth. It
also has a Bell Labs division in Sydney's North Ryde.


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

BESTWAY:  Posts $9.378 Net Loss
-------------------------------
Bestway International turned to the red with a $9.378 million net
loss for the half-year ended September 30, 2000, compared with
the $4.614 million profit from a year earlier, CN-Market News
reported on Monday.

Turnover totaled $180 million. Loss per share was at 0.66 cent
and no interim dividend will be distributed.


FUIJIAN:  Fails to Pay Samurai Bond
-----------------------------------
Fujian Investment and Enterprise Corp., the investment arm of
China's Fujian province, failed to make a 287 million yen
interest payment on 14 billion yen Samurai bonds that will mature
in 2006.

China's central bank chief Dai Xianglong said government
investment firms will not be allowed to default on their foreign
debts, according to the Wednesday issue of Bloomberg.


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

BANK MANDIRI:  Can Pay $560M Foreign Debts
------------------------------------------
Bank Mandiri is confident that it can repay $560 million in
foreign loans maturing this year.

ECW Nelloe, Bank Mandiri president, said the company still has $2
billion in offshore borrowings that will mature in 2002,
Indoexchange News reported on Wednesday.

"We are confident that we can pay the debt as Bank Mandiri's
financial condition has improved," he said. These debts are owed
to four banks whose names he refused to reveal.

When four state-banks were merged in August 1999 it recapitalized
and realized a profit of Rp 2 trillion.

The bank is planning to buy Rp7.5 trillion of restructured loans
from the Indonesian Bank Restructuring Agency this year.


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

CHIYODA LIFE: Negotiations Delayed
----------------------------------
Chiyoda Mutual Life Insurance Co. will prolong negotiations for
seeking an investor until mid-February as its administrators do
not want to take the safety net provided by the government.

The safety net has provided 145 billion yen relief to failed
Daihyaku Mutual Life Insurance Co. by the Life Insurance
Policyholders Protection Corp. Chiyoda has a 500 billion capital
deficit.

Administrators revealed that the negotiations with American
International Group, which offered support, had been stalled,
according to the Wednesday issue of the Japan Times On Line.

According its application for protection applied with the court,
Chiyoda administrators were given until March to formulate their
rehabilitation plan before it is eligible for government
assistance.


ORICO LIFE:  Prudential Holdings Buys Shares
--------------------------------------------
Prudential Corporation Holdings Ltd. will buy Orient Corp.'s
entire stake of 360,000 outstanding shares in Orico Life
Insurance Corp. by February 13 for 23 billion yen.

Prudential wants to establish a presence in Japan, the largest
insurance market in Asia, while Orient Corp. will concentrate on
its credit sales business, Japan Times On Line reported on
Wednesday.

Orico Life Insurance has 18 billion yen in capital with 108.6
billion yen in total assets. During the first half of last year
ending Sept. 30, it had 12.9 billion yen in premiums. Its major
shareholders are Orient with 72.22 percent, Orico Trading Co.
with 13.89 percent and Orient Research Institute Co. with 11.11
percent. Dai-Ichi Kangyo owns the remaining 2.78 percent.

Orient Corp. had a consolidated special profit of 4.4 billion yen
because of the sale of Orico shares and suffered an
unconsolidated special loss of 2.7 billion yen.

As a result, Orient revised upward its consolidated earnings
forecast for the current business year ending on March 31 to a
net profit of 1.5 billion yen from the earlier estimate of a loss
of 4.1 billion yen released in late November.

In contrast, Orient downgraded its unconsolidated earnings
estimate for the current fiscal year to a net loss of 11 billion
yen from the earlier forecast of a 9.4 billion yen loss.


TAISHO INSURANCE:  Two Firms Interested
---------------------------------------
Two Japanese companies have proposed to take over Taisho Life
Insurance Co. with an initial capital of 1 billion yen.

Yamato Mutual Life Insurance Co. and Softbank Corp. will set up a
joint life insurance firm that will inherit Taisho Life's
insurance policies, according to the Wednesday edition of the
Japan Times On Line.

This will be the first time two companies from different sectors
have entered the insurance market. The granting of license is
being studied.

The new company will have employees from Yamato Mutual taking
over and Taisho Life policies will be transferred to the new
firm.

Taisho Life was declared bankrupt in August of last year because
of a capital-building scandal involving its largest shareholder
Yoshihiko Kokura, the head of Claremont Capital Holding Inc.,
accused of defrauding the company of 8.5 billion yen.


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

DAEWOO SHIPPING:  Will Repay 200B Won in Loans
----------------------------------------------
Daewoo Shipping & Engineering Co. will be able to repay its
financial institutions loans amounting to 200 billion won after
it completes its workout program this year, World News connection
reported on Sunday.

The sales target for this year is 2.86 trillion won, a 6 percent
increase from the previous year; operating profit is set for
210.7 billion won and ordinary profit for 128.5 billion won.

The company had agreed with creditors to improve productivity,
lower costs and introduce effective capital management to provide
additional funds.

Daewoo Shipping's workout program started on in August 1999,
waiving payments until late 2002 for debts worth 700 billion won.


SSANGYONG MOTOR:  Creditors Extend Workout Program
--------------------------------------------------
Ssangyong Motor received approval from creditor banks for the
extension of its workout program to the end of this year with
labor unions agreeing not to strike during the workout period.

Cho Hung Bank and other creditors did not raise objections to
Ssangyong Motors' workout program with the labor union guarantee,
according to Monday edition of World News Connection.

A company source said, "The labor union seems to have realized
that if the company doesn't succeed during the workout plan,
there would be no future for both the company and workers. The
decision allows the company to focus on expanding sales with a
stable management base."

Ssangyong Motor reported record sales of 116,273 cars at home and
abroad last year, worth 1.8 trillion won (US$1.4 billion).


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

KUALA LUMPUR INDUSTRIES:  Gets a RM300M Capital Infusion
--------------------------------------------------------
Taman Equine Sdn Bhd., a property developer, will pour RM300
million in capital into Kuala Lumpur Industries Holdings Bhd. as
part of the latter's restructuring plan.

Taman Equine will acquire 1.5 million KLIH shares at RM1 each
through a reverse takeover exercise, according to the Saturday
edition of the New Straits Times.

The reverse takeover exercise forms an integral part of KLIH's
restructuring scheme, pending finalisation and agreement with the
company's creditors. Also included in the scheme is a capital
reduction and transfer of its listing status.

In 1998, KLIH was suspended from trading and then placed under
the special administration of Pengurusan Danaharta Nasional Bhd.

KLIH's main line is property development, insurance, construction
and leasing.

KLIH and Datuk Patrick Lim Soo Kit, Taman Equine executive
chairman, on Thursday signed the memorandum of understanding to
facilitate the acquisition. The MoU is an extension to the
earlier agreement signed on June 8 last year.

A special administrator will be appointed to formulate the
proposal for key terms of understanding.

Under the proposal a new company (NewCo) will be formed embarking
on a fund-raising exercise for the issuance of new Taman Equine
shares.

KLIH and Equine will finalize the proposal in eight months and
then the latter will takeover KLIH property development projects.

Among the projects are the Baba Nyonya Resort in Malacca, Emville
in Negri Sembilan, Pandan Mewah Heights, Pinwang Industrial Park
and Taman Medan, all in Selangor, and Bandar Putra Palm Villa in
Johor Bahru.


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

BW RESOURCES:  Megaworld Expects to Take Over
---------------------------------------------
Megaworld is expected to takeover BW Resources after its 72.72
percent stake or 1.2 billion common shares with a par value of P1
has been freed from lock-up.

Luke Tan, Megaworld investor relations officer said, "As of now,
we don't have any specific direction on what to do with the
shares," the Philippine Daily Inquirer reported on Wednesday.

Megaworld acquired 1.2 billion shares of BW as part of an asset-
for-share swap involving the transfer of the company's Malate
property, which will house the Sheraton Marina complex. Andrew
Tan, Megaworld chairman, had intended to be a passive investor in
the company. The shares, however, were locked up for a period of
one year.

Sheraton Marina was supposed to be BW's flagship project and was
set to have the casino operations of the Philippine Amusement and
Gaming Corp.


MIMOSA ESTATE:  Leisure Complex to Be Privatized Soon
-----------------------------------------------------
Clark Development Corp. (CDC) will offer Mimosa Leisure Estate, a
235-hectare casino hotel leisure complex in Pampanga, to
interested firms without assuming the loans.

Rogelio L. Singson, CDC president, said that CDC would be
prioritizing the proposal from the group of creditor banks of
beleaguered Mondragon International Philippines, Inc. (MIPI),
which owns Mimosa. These include Metropolitan Bank and Trust Co.,
Far East Bank and Trust Co., Asian Banking Corp., United Coconut
Planters Bank, and Land Bank of the Philippines.

Even though the banks have not submitted a plan yet, it is
interested in how MIPI will pay its debts, Business World
reported on Wednesday.

Mr. Singson declined to identify the investors but hinted that
these are entirely different groups from those who have expressed
interest in running the casino firm in the past.


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

COUNTRY FINANCE: Will Receive a Portion of Claims
-------------------------------------------------
Country Finance and Securities Co. and 12 other finance companies
will receive Bt30.5 billion, or 31.44 percent, of claims by the
end of March, the Financial Sector Restructuring Authority said.

The 13 companies are Country Finance and Securities Co., Lila
Finance and Securities Co., Siam Commercial Trust Co., Thai-
Oversea Trust Co., Dhana Nakorn Finance and Securities, Premier
Finance, Bangkok Metropolitan Trust, Union Finance, Bara Finance
and Securities, Thai Financial Syndicate, Thai Thamrong Finance,
Cathay Finance and Securities and Metropolis Trust and Securities
Plc.


KRISDAMAHANAKORN:  Fails to Meet Debt Restructuring Goals
---------------------------------------------------------
Krisdamahanakorn Public Company Limited (KMC) has failed to
realize the goals set in its debt restructuring agreement for the
third quarter of last year, according to the report of Finansa
Securities Ltd., a financial advisor.

Operating performance of normal property development business
outperformed the projected figures of the third quarter of 2000.
Revenue from sales of property is 1,007.27 percent higher than
the projection.  

Revenue from property management, interest income, and revenue
from golf course are 142.42 percent, 129.46 percent, and 13.17
percent higher than the projection, respectively, the Stock
Exchange of Thailand reported on Tuesday.

Rental income and other income are 30.45 percent and 94.42
percent lower than the projection, respectively.

Cost of sales is 499.47 percent higher than the projection due to
increase in sales of property. However, selling & administration
expenses are 57.07 percent lower.

Gross profit is 2,483.25 percent higher than expected. Actual
gross margin is 54.52 percent compared to the projected one at
21.63 percent. Since KMC has adjusted its sales and marketing
strategies as per the rehabilitation plan, sales have
dramatically increased.

In addition, costs and selling and administration expenses are
under proper control. Operating profit before interest expenses
is 392.38 percent higher than the projected one.

Interest expenses are 99.03 percent higher than the projection
since the debt restructuring with some lenders was not completed
in the third quarter as expected. KMC has to realize high
interest expenses based on existing high interest rates and loan
amounts. However, part of the interest expenses incurred in the
third quarter of last year will be reversed to profit from debt
restructuring after the debt restructuring is completed.  

Interest expenses booked by KMC in the third quarter will not be
taken into consideration in debt restructuring with lenders.

Reversal of revenue from sales, revenue from construction
service, cost of sales, cost of construction service, and
provision for doubtful accounts from contract termination are
lower than the projection, since KMC cannot terminate contracts
as quickly as expected partly due to the returned termination
mails (which cannot terminate contracts immediately according to
the accounting principles).

Profit from debt restructuring, reversal of losses from asset
impairment, and profit (loss) from sales of assets are below the
projected figures because the debt restructuring was not
completed. These transactions will finally occur in the fourth
quarter of 2000 and in 2001.


NAWARAT PATANAKARAN:  Submits Reorganization Plan
-------------------------------------------------
Nawarat Patanakarn Public Co. Ltd. submitted its reorganization
plan to the Stock Exchange of Thailand on January 23.

The plan calls for the company to reduce its registered capital
from Bt2.9 billion to Bt1.45 billion through unissued 146 million
shares at a par value of Bt10 per share.

Foreign shareholders increased their share from 30 to 40 percent
of the paid-up capital.

The capital increased from Bt181 million to Bt1.81 billion by
means of a debt to equity conversion involving 163 million shares
valued at Bt10 per share.

Convertible debts worth Bt469 million were issued to secured
creditors claiming 15 percent of total debt and other financial
institutions completed on December 27 last year.

On November 30 the plan administrator entered into the debt
restructuring agreement with The Siam Commercial Bank Public
Company Limited, representing the creditors.

Chaiprakarn Company Limited, the plan administrator, also
appointed Ernst & Young Corporate Services Company Limited to be
the Independent Accounts in reviewing the report of cash, cash in
banks, working capital and excess cash to creditors.



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