/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/011102.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 Friday, November 2 2001, Vol. 4, No. 215 Headlines A U S T R A L I A AUSTAR UNITED: Nov 15 Release Date Set For Cash Flow Statement CHROME GLOBAL: Posts Top 20 Shareholders GOODMAN FIELDER: Director Doug McKay Resigns HORIZON ENERGY: Issues First Quarter Activities Report NEWCREST MINING: Discloses Chairman's Shareholders Address PASMINCO LIMITED: Releases September Quarter Production Result PRESTON RESOURCES: Posts Bulong Operations' Q101 Report C H I N A & H O N G K O N G CIL HOLDINGS: Audited Results, Annual Report Dispatch Delayed HONRICH INTERNATIONAL: Winding Up Sought By Hua Chiao GOLDEN PIONEER: Winding Up Petition Hearing Set KELON ELECTRICAL: Changes Single Largest Shareholder NAM HING: Petition To Wind Up Slated I N D O N E S I A BANK UNIBANK: Executives Banned From Travel Aboard TIMAH TBK: Financial Condition At Critical Stage J A P A N MATSUSHITA ELECTRIC: Implementing 8,000-Employee Job Cut K O R E A DAEWOO CONSTRUCTION: Eased Sanctions Will Bring In US$500M DAEWOO MOTOR: GM May Take Over Bupyong Plant in Six Years HYNIX SEMICONDUCTOR: Creditors Finally Agree on Bailout HYUNDAI CONSTRUCTION: To Supply Steel Pipes to India HYUNDAI SECURITIES: Sale Talks With AIG to Continue HYUNDAI SECURITIES: Union Lawsuit Dropped By Local Court KOREAN AIRLINES: More Than 1,000 Job Cuts Scheduled M A L A Y S I A EPE POWER: Further Defaults Interest Payment KELANAMAS IND: Rescue Plan Obtains Regulatory Approval LAND & GENERAL: Unit's Winding Up Petition Hearing Postponed NCK CORPORATION: No Change in Defaulted Payment Status PICA (M) CORPORATION: Director Haju Ali Resigns as Director RENONG BERHAD: Subsidiary PUTRA Remains In Default RENONG BERHAD: Utilizes Proposed Acceptances To Redeem Bond SELOGA HOLDINGS: Awaits KLSE's Reply Re Extension Requests SRI HARTAMAS: Auditors' Issue Opinion on H101 Report TAI WAH: Buy-in Team In Negotiations With Potential Investors TECHNOLOGY RESOURCES: SC Rejects Naluri's Proposal UNIPHOENIX CORPORATION: Incurs RM65M Audited Loss P H I L I P P I N E S NATIONAL POWER: Coal Demand to Drop 33% PILIPINO TELEPHONE: PLDT Acquires More Shares S I N G A P O R E CHEW EU: Seeks Ways to Improve Financial Position SEMBCORP LOGISTICS: Posts Substantial Shareholding Changes THAKRAL CORPORATION: Creditors Approve Scheme of Arrangement T H A I L A N D SIAM CEMENT: Divesting Non-core Assets THAI PETROCHEMICAL: Rayong Power Plant Draws Bids TPI POLENE: Files Business Reorganization Petition * Central Bankruptcy Court Winds Up Three Finance Firms - - - - - - - - ================= A U S T R A L I A ================= AUSTAR UNITED: Nov 15 Release Date Set For Cash Flow Statement -------------------------------------------------------------- Austar United Communications Limited noted that complete financial data for the third quarter will be released on 15 November 2001 in accordance with its usual practice. The company posted the Appendix 4C Quarterly Report for entities admitted on the basis of commitments: APPENDIX 4C QUARTERLY REPORT FOR ENTITIES ON BASIS OF COMMITMENTS Name of entity Austar United Communications Limited ACN or ARBN Quarter ended (current quarter) 087 695 707 30/09/2001 CONSOLIDATED STATEMENT OF CASH FLOWS Cash flows related to Current Year to date operating activities Quarter (9 months) AUD'000 AUD'000 1.1 Receipts from customers 95,004 284,962 1.2 Payments to suppliers and employees (113,492) (356,959) 1.3 Dividends received - - Net GST received (1) 628 2,878 1.4 Interest and other items of a similar nature received 3,132 7,995 1.5 Interest and other costs of finance paid (12,807) (30,463) 1.6 Income taxes paid (4) (44) 1.7 Other - items 1.24 and 1.26 (19,957) (19,957) 1.8 Net Operating Cash Flows (47,496) (111,588) (1) The Company has adopted UIG 31 Accounting for the Goods and Services Tax (GST) and shown cash flows for the "Current quarter" and "Year to date" on a gross basis. In the first quarter cash flows were shown on a net basis. Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses(2) (25,462) (64,014) (b) equity investments (60) (181) (c) intellectual property - - (d) physical non-current assets (20,493) (69,343) (e) other non-current assets (35,566) (43,993) 1.10 Proceeds from disposal of: (a) businesses - 2,913 (b) equity investments - - (c) intellectual property - - (d) physical non-current assets - - (e) other non-current assets 4,500 12,646 1.11 Loans to other entities (200) (200) 1.12 Loans repaid by other entities 2,000 12,000 1.13 Other (provide details if material) (1,367) 164 Net investing cash flows (76,648) (150,008) 1.14 Total operating and investing cash flows (124,144) (261,596) Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. - 202,320 1.16 Proceeds from sale of forfeited shares - - 1.17 Proceeds from borrowings - - 1.18 Repayment of borrowings - - 1.19 Dividends paid - - 1.20 Other (provide details if material) (1,572) (3,358) Net financing cash flows (1,572) 198,962 Net increase (decrease) in cash held (125,716) (62,634) 1.21 Cash at beginning of quarter/ year to date 253,216 190,134 1.22 Exchange rate adjustments to item 1.20 - - 1.23 Cash at end of quarter 127,500 127,500 (2) In 2001, the Company has contributed $64,014,000 $25,462,000 in the third quarter) to Telstra Saturn Ltd (TSL) pursuant to the TSL NZ$900 million debt facility whereby the Company is required to contribute NZ$0.50 for every NZ$1.00 of Tranche B debt drawn. On 01/10/2001 the Company reached agreement with Telstra Corporation to restructure the Shareholders Agreement. Under the terms of the restructured arrangement, Telstra Corporation will, in the short term, contribute funding to TSL in the form of subordinated debt. PAYMENTS TO DIRECTORS OF THE ENTITY AND ASSOCIATES OF THE DIRECTORS PAYMENTS TO RELATED ENTITIES AND ASSOCIATES OF THE RELATED ENTITIES Current Quarter AUD'000 1.24 Aggregate amount of payments to the parties included in item 1.2 19,957 1.25 Aggregate amount of loans to the parties included in item 1.11 - 1.26 Explanation necessary for an understanding of the transactions The Company paid $19,957,000 to its' ultimate parent entity, UnitedGlobalCom Inc (UGC). The payment was to reimburse UGC for direct costs paid on behalf of the Company and to settle accrued management fees and other costs incurred by UGC on behalf of the Company since the Initial Public Offering in July 1999. NON-CASH FINANCING AND INVESTING ACTIVITIES 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows N/A 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest N/A FINANCING FACILITIES AVAILABLE Add notes as necessary for an understanding of the position. Amount Amount available used AUD'000 AUD'000 3.1 Loan facilities 400,000 400,000 3.2 Credit standby arrangements - - RECONCILIATION OF CASH Reconciliation of cash at the end Current Previous of the quarter (as shown in the quarter quarter consolidated statement of cash flows) AUD'000 AUD'000 to the related items in the accounts is as follows. 4.1 Cash on hand and at bank 15,240 7,229 4.2 Deposits at call 112,260 245,987 4.3 Bank overdraft - - 4.4 Other (provide details) - - Total: cash at end of quarter (item 1.22) 127,500 253,216 CHROME GLOBAL: Posts Top 20 Shareholders ---------------------------------------- Chrome Global Limited posted its top 20 shareholders: DISTRIBUTION OF SHAREHOLDERS AS AT 24/09/2001 RANGE OF HOLDINGS NO OF NO OF % HOLDERS SHARES 1 - 1,000 24 17,186 0.1 1,001 - 5,000 263 894,408 1.4 5,001 - 10,000 246 2,145,002 3.3 10,001 - 100,000 403 12,840,578 20.0 100,001 and over 60 48,275,458 75.2 TOTAL 996 64,172,632 100.0 TOP TWENTY SHAREHOLDERS AS AT 24/09/2001 ORDINARY FULLY PAID SHARES NAME NUMBER % Philip John De La Harpe (De La Harpe Family A/C) 6,060,000 9.4 Netprince Pty Ltd 5,000,000 7.8 Cygnet Nominees Pty Ltd 3,125,000 4.9 Patrick Barry & Warren Leslie Barry (Barry Family A/C) 3,125,000 4.9 Sydney Equities Pty Ltd 3,000,000 4.7 Angela Baum 2,500,000 3.9 Blackmort Nominees Pty Ltd 1,510,000 2.3 Group #2 Caroline De La Harpe Philip De La Harpe 1,500,000 2.3 Gary Knights (Knights A/C) 1,250,000 2.0 Paul Davey 968,000 1.5 Overnight Nominees Pty Ltd 886,125 1.4 First Capital Group Ltd 886,125 1.4 Salen Morgan Pty Ltd 800,000 1.3 Australian Electronic Publishing Pty Ltd 800,000 1.3 Perelli Pty Ltd 600,000 0.9 Eric Lindsay Bolto 600,000 0.9 Gordon Alfred Sklenka 590,750 0.9 Poynton and Partners 588,000 0.9 Chang Hong Eng 401,643 0.6 Bradley Allen Potter 400,000 0.6 The Directors of Chrome Global Limited appointed Mr Brian McMaster, of Ernst & Young, as administrator of the Company and its subsidiaries, on October 23, 2001. GOODMAN FIELDER: Director Doug McKay Resigns -------------------------------------------- The Chairman of Goodman Fielder Limited, Mr Jon Peterson, has announced that the Chief Operating Officer, Mr Doug McKay, has resigned to pursue other career opportunities. Mr Peterson said Mr McKay would therefore not stand for re- appointment as an executive Director at the Annual General Meeting on 16 November 2001. "The Board is disappointed but understand Mr McKay's decision to leave the company following the completion of the strategic review and subsequent moves to streamline the organizational structure of the company" Mr Peterson said. "Mr McKay has made a significant contribution to the company since he joined in 1998 and was a major participant in the strategic review that will transform Goodman Fielder over the next couple of years." Mr McKay is currently finishing The Advanced Management Program at Harvard Business School and intends to take a break over Christmas with his family in New Zealand before embarking on a new career opportunity in the New Year. HORIZON ENERGY: Issues First Quarter Activities Report ------------------------------------------------------ The Directors of Horizon Energy Investment Management Limited (HEIML), the manager for Horizon Energy Investment Group (Horizon), released Wednesday the quarterly update for the three months ended 30 September 2001. OPERATING PERFORMANCE Horizon's only investment is its 25% interest in the Loy Yang Power partnership (LYP). LYP's key operating results for the period are show in the table below: 3 MONTHS TO 3 MONTHS TO 30 SEP '01 30 SEP '00 Generation revenue $146.8 m $149.3 m Other revenue $12.5 m $11.7 m Total revenue $159.3 m $161.0 m Available Capacity Factor (ACF)(1) 100.5% 99.1% Generation Sold 3,950 GWh 3,931 GWh The key observations to be noted are: * LYP's generation revenue for the September 2001 quarter of $146.8 million was 1.7% lower than the previous corresponding period. The small decrease in generation revenue reflects lower pool prices during the quarter compared to the September 2000 quarter (refer below) and a higher proportion of LYP's generation revenue being exposed to pool prices, but also the positive benefits of higher contract prices for the quarter. * LYP continues to operate in line with world's best practice, with plant ACF increasing slightly to 100.5%, reflecting over capacity generation FINANCIAL CONDITIONS OF LOY YANG POWER As anticipated in its June 2001 quarterly update and 2001 Annual Report, LYP is required to increase the Senior Debt Service Reserve requirement from 3 months of debt repayments to 6 months. The increase in debt service reserve requirement occurred due to debt service coverage ratio triggers and does not constitute an Event of Default under the LYP financing documents. The increase in Senior Debt Service Reserve requirement will result in approximately $100 million of additional surplus project cashflow being accumulated into the senior debt service reserve account. This takes priority over payments to Junior Debt and will result in further capitalization of Junior Debt payments until the reserve reaches the required level. The capitalization of LYP Junior Debt was specifically provided for under the LYP financing documents. The key financial issue currently facing LYP is the maturity of a $500 million tranche of senior debt in May 2003 and investigation is currently under way to determine the best alternative for dealing with the repayment of this tranche of debt. ELECTRICITY MARKET DEVELOPMENTS Demand weighted pool prices for the September 2001 quarter averaged $27.48 per MWh, approximately 96.1% below the September 2000 quarterly average of $53.88 per MWh, though 20.0% higher than the September 1999 quarter of $22.89 per MWh. The decrease from the September 2000 average reflected, in part, the extended outage of a 500MW unit at Loy Yang B during much of the September 2000 quarter which inflated the average price. A milder than average winter in 2001, coupled with higher supply side generator availability across the market generally, has also contributed to this result. On the back of lower pool prices, flat load contract prices for the 2002 and 2003 calendar years have softened since the end of the June but remains in the low to mid $40s per MWh. Activity in the contract market also slowed during the quarter. Part of this slow down can be attributed to retailers having contracted the majority of their load requirements for 2002, with some remaining cautious about locking in longer-term prices. NEMMCO announced on 16 October that contrary to recent media reports, Edison Mission Energy's Valley Power electricity 300 MW peak generation plant is on schedule to meet this summer's peak electricity load requirements. However, if some of the new gas- fired generation capacities do not become operational before the summer peak or if the current outage at Loy Yang B power station(2) extends into summer, there is a possibility that the next few months could be another volatile period for the electricity market. OUTLOOK Subject to successfully dealing with the repayment of the $500 million bullet due in May 2003, the outlook for LYP is positive with contract prices for 2002 and 2003 remaining in the low to mid $40s per MWh, coupled with potential benefits from cost effective additional capacity. The refinancing of the $500 million bullet will be a major step towards putting LYP on a stronger financial footing thereby unlocking the value of Horizon's investment. Until such time, however, an investment in Horizon should still be seen as speculative but the opportunity for capital gains remains a real possibility. For further information contact: Dennis Eagar MANAGER, EXTERNAL AFFAIRS Horizon Energy Investment Management Limited Ph: (02) 8232 6771 NEWCREST MINING: Discloses Chairman's Shareholders Address ---------------------------------------------------------- Newcrest Mining Limited disclosed Executive Chairman I R Johnson's address to shareholders: "I would like to present to you a brief overview of the Company's activities during the past year, the issues which we are facing today and the outlook for the Company. YEAR IN REVIEW "You would be aware that in September this year Russell Barwick resigned as Managing Director of Newcrest after little more than twelve months in the role. "We acknowledge Russell's efforts during that time and thank him for his contribution. It had become clear to both Russell and the Board that there were major differences concerning what would be required of him as the Company continued its rapid growth. This was disappointing to both Russell and the Board but it was an issue that had to be resolved. "I can assure you that the differences between Russell and the Board did not relate to the Company's direction or strategy, nor to any of the key elements or viability of the operations which underpin our business. We have found it difficult in the past to identify the right person for the top job and the shape, size and complexity of the Company's activities make that task no easier now. It may take time but the Board is determined to make the right appointment. "In the meantime the Board has asked, and I have agreed, that I will take on the role of Executive Chairman until a new Managing Director is appointed, to ensure the smooth operation of the Company and continuation of our growth strategy which remains the primary focus of our activities. "Fortunately one of Newcrest's key strengths is its strong and extremely capable team of senior executives. This team, and those who work for them, have been the driving force of the Company over the past few years, and I am confident they will continue to be so into the future. "I am pleased to be able to announce here that we have further strengthened our senior executive team with a new appointment to the position of Executive General Manager Operations, Mr Tony O'Neill, who was in charge of WMC Resources Gold Division until it was sold last month, has agreed to take up the position, with immediate effect. His strong operating background, and his understanding of the gold industry, will be invaluable to us as he takes over immediate responsibility for the Cadia and Gosowong operations, and Ridgeway next year. Mr Steve Reid, who currently holds the position at Newcrest, has indicated his desire to return to Canada, for personal reasons. "The 2000/2001 year was marked by a number of key decisions and events, as the Company continued to pursue its aggressive growth strategy. "When I spoke to you at last year's Annual General Meeting, I indicated that while achieving maximum operating efficiencies and profit are important objectives, those goals could never take precedence over safety. I assured shareholders that every effort was being made, and would continue to be made, to ensure a safe working environment for all our workers. "I am pleased therefore to report that in the past year the Company's overall safety performance has improved. The Lost Time Injury Frequency Rate rose from 3.9 last year to 4.6 for the 2000/01 year, an increase that was countered by falls in the Restricted Duties Injury Frequency Rate and the number of Serious Potential Incidents. The RDIFR dropped to 33.7 from 37.8 in the previous Year and there was also a better than 50% reduction in the number of SPI's compared with the previous period. We expect these are early indicators of further overall improvement in the Company's safety performance which would see a substantial reduction in the Lost Time Injury Frequency Rate for the current year. "Also as I reported to you at our Annual Meeting last year, steps had been implemented to actively lower the overall cost of the Company's operations. I reported to you then that operations had been suspended at Telfer. That decision has clearly been vindicated as Newcrest has been able to lower its overall average cash cost of production by A$35 per ounce. "In February this year changes were implemented to Newcrest's organizational structure so as to fully optimize the management of existing operations and the development of new projects. This resulted in a number of redundancies at the company's head office in Melbourne and closure of its Sydney office. Those, and other changes, enabled the Company to streamline its management and reduce its costs of administration by almost A$5 million per annum. This improved even further its competitive position. "Continuing the focus on costs, in June this year the New Celebration operation was sold. This had become the Company's highest cost mine and both internal and external reviews confirmed this situation was likely to continue. "The cumulative effect of these decisions has been to significantly reduce Newcrest's average cost of production thereby improving its operating margin and fundamental competitiveness. In the September quarterly report which was released just over a week ago, we reported that the Company's average cash cost of production had now come down to A$260 per ounce in the quarter just finished. This compares with A$295 per ounce a little over a year ago and now places Newcrest in the lowest quartile on the cash cost curve of world gold producers. "Concurrent with the relentless drive to improve the Company's cost competitiveness, the hard work has continued to also maintain its strong growth strategy. "During the 2000/2001 year construction of the Ridgeway Underground Gold Mine proceeded at full speed. This operation, which is expected to begin commissioning in March 2002, will lift the Company's production and profitability to a new level. This project has been one of Newcrest's key priorities and I am pleased to say that after twenty months of construction and having spent A$186 million with a further $100 million still to be spent, it is still on time and on budget. This is a credit to the management and development team under the leadership of Bruce Price, who will speak to you further about this project later in the meeting. "The strong focus on exploration has also been handsomely rewarded, especially around existing mine sites, with a better than 30% increase in Newcrest's gold inventory. During the year an additional 11 million ounces of gold resources were identified, bringing to 42 million ounces the total estimated resources. Significantly the bulk of those increases came from the Telfer and Cadia districts where Newcrest is the only gold producer and has a tight strategic holding in each area. Telfer and Cadia are now recognized as being two of Australia's most significant gold provinces and Newcrest's dominant position in both of them is a major asset that will benefit the Company for many years to come. "The Company's capacity to push as hard as it did during the past year to develop its pipeline of growth projects, and to search for new deposits has been underwritten by the strong performances of its two principal mines at Cadia and Gosowong, which have both been strong cash generators during the year. "The Cadia Hill Gold Mine, which is now entering its fourth year of production, produced in excess of 300,000 ounces of gold (and 26,000 tonnes of copper as a by-product) at an average cash cost of A$272 per ounce. As mining moves deeper into the Cadia Hill orebody additional challenges are being encountered, such as increasing waste removal and truck haulage distances, which will require ongoing improvements in operating efficiencies for the Company to keep costs at an acceptable level. "The Gosowong Mine, in far east Indonesia, has also continued to perform at or above expectations during the year. Although a much smaller operation physically than the Cadia Hill Gold Mine, the high grade of the Gosowong orebody has enabled this operation to also make a strong contribution to the Company's cashflow. During the year it produced in excess of 220,000 ounces of gold at a low cash cost of A$222 per ounce. It is a credit to Newcrest's local management, its partners, PT Aneka Tambang and the provincial and national authorities that this operation has continued to perform strongly during recent uncertain times. "At the Boddington operation in Western Australia mining of the remnant oxide pits has continued, albeit at a reducing rate, with Newcrest's 22% share of production during the 2000/01 year just 50,000 ounces. Not surprisingly production costs have continued to climb and are now at a level higher than all of Newcrest's other operations. The Company's interest in Boddington centres on the potential to develop the underlying Wandoo gold deposit as a new operation, but I will talk about that later. "The flagship operations at Cadia Hill and Gosowong, together with contributions from New Celebration, Ridgeway and Boddington resulted in gold production of almost 800,000 ounces for the year. This was almost 200,000 ounces less than the preceding period, the major difference of course being the closure of Telfer. Nevertheless, as I have indicated, the changes that were made enabled the Company to reduce its cash costs substantially. With its hedging programmed, of which I will speak to you in more detail in just a moment, Newcrest was able to achieve an average sale price for each ounce of gold almost $120 better than the prevailing spot gold price for the year. Even with its continuing strong exploration activities and the cost of restructuring and closing some of its operations, this enabled it to post a profit after tax of $38 million for the year. "This result enabled the Company to pay shareholders a modest full year dividend of 5 cents per share. As its new mines are brought into production Newcrest will be able to generate a stronger result and provide stronger returns to shareholders. "The profitability of Newcrest's business will continue to be impacted by external factors such as the world economic cycle, the gold price and the value of the Australian dollar. "Let me outline then for you the issues which the Board sees confronting Newcrest as it moves forward. "The tasks of finding new mines, building them and then operating them successfully are technical tasks which the Company is well equipped to handle with its workforce of skilled and well trained geologists, engineers, metallurgists and other technical people. "The price at which it sells its gold and copper is something it does not control. As with most other commodities, the price of these two products can, and does, fluctuate quite dramatically both in the short-term and the longer term. By way of example let me take a moment to show you how the Australian dollar gold price has moved during the past ten years. "In the gold business, it takes, on average, between five and ten years to bring a deposit from discovery through feasibility, then construction and finally into production. "When Newcrest commits to new projects, such as it did at Ridgeway in 1999 end Cadia in 1996, the only way it can be certain that it will achieve an acceptable price for its product, once an operation comes into production is to forward sell, or hedge a proportion of its product and its currency. This enables the Company to effectively put in place a floor price for the gold and copper each project will produce regardless of any adverse movement in the commodity and currency cycles. Without that protection your Board could be putting, at risk, the very viability of the Company if there was a sharp or sustained downward turn in commodity or currency values. This protection was put in place when the Company committed to its existing projects, and as funds are invested in the new Telfer project sufficient cover would need to be put into place to support that investment. "In protecting the Company from deteriorations in the gold price or exchange rate there is inevitably some trade off of the benefit which it would receive if Commodity or currency prices were to substantially improve. This is a conscious decision and is a price that your Board believes the Company should pay to ensure that it continues to survive, even in bad times. Trade- offs, for example, include some currency hedges which were put in place to protect Newcrest from a strengthening Australian currency. Despite the weakness of the Australian dollar since that time, the Company has still managed to achieve an average gold price of more than A$600 per ounce over the last five years. The Company has in place hedging over 6.5m ounces of gold which amounts in approximately 60% of reserves or 15% of resources. It also has a gold loan which was put in place in 1999 extending out to 2011. The bulk of the Company's resources remain unhedged and therefore provide exposure to future movements in the gold price. "This means that Newcrest has been deliberately positioned, not as a short term speculative play, but rather as a long term investment supported by sound fundamentals and more certain returns. "Traditionally, the market has viewed resource stocks differently from other stocks, such as industrial companies, with resource companies enjoying higher price earning ratios. That distinction has now disappeared with the result that resource companies need to ensure their fundamental financial position is strong. Your Board has positioned Newcrest as a growth stock with a strong and stable base, capable of being measured favorably against other resource and non-resource companies. "Your Board believes that its strategy of building a sound long term future for Newcrest is consistent with the changed market view of resource companies and will ultimately deliver far stronger returns to you, the owners. It is however a long term strategy which is different to the short term thinking affecting so many of today's investment decisions. "Other current influences include the drive for rationalization and consolidation throughout the global resources sector. No resource company is unaffected by this process and that includes Newcrest. Your Board's singular focus has been, will continue to be, to achieve the best possible outcome for all shareholders. We do not propose letting ourselves become distracted, however, from the primary task of improving the Company's fundamentals, that is the discovery, development and efficient operation of gold mines. "Merger and acquisition opportunities shall only be considered if they clearly add value for shareholders or improve Newcrest's position on the world cost curve. Such opportunities are rare and organic growth remains the prime focus of generating shareholder wealth at an acceptable level of risk for your investment. "What then does the year ahead hold for Newcrest? "Within the next six months construction of the Ridgeway project is expected to be completed and commissioning commenced. By June next year Ridgeway would be expected to be making a substantial contribution to Newcrest's overall production and, a low cost operation, a significant enhancement to its bottom line. "At the same time the Company will continue full steam ahead with its Telfer projects. Since the old mining operations closed last year much hard work is being done to understand the mineral endowment of that area and how Newcrest can once again profitably exploit it. As I indicated to you earlier the Company now confidently estimates that there is an additional 7 million ounces or potentially economic gold at Telfer, bringing the total resource estimate to 18 million ounces. It is currently conducting a full feasibility study into exploiting this resource through a fresh approach to the mining and recovery of the gold and copper. "It the feasibility study supports the preliminary views, one year from now Newcrest would expect to be in a position to commit to building a new operation at Telfer to create a mining operation similar in size to the Company's developments in the Cadia field. "At Wandoo, it is unclear at this time as to whether Newcrest will continue to have two joint venture partners, Normandy Mining and Anglogold or whether they will merge into one. Either way, consideration of the feasibility work done to date will determine whether a long term viable operation can be sustained by the Wandoo deposit. Wandoo is a large mineralized system and the Board will keep an open mind as to how best the value of Newcrest's 22% interest in that deposit can be maximized for shareholders. "The exploration results at Cracow in Queensland and at Toguraci just 2 kilometers from our Gosowong mine in Indonesia are also very encouraging. If the viability of those projects can be established, and there is still much work to be done, the Toguraci deposit could make a small but significant contribution by late 2002/early 2003 and the Cracow operation sometime after that. Both of those projects are small at this stage but as they are relatively high grade they have the potential to provide a high margin return which would supplement the base load of the Company's larger operations. Among the Company's grassroots exploration activities the better results are coming from the Ashburton project in Western Australia. "Against the backdrop of these exciting new projects and exploration prospects Newcrest will continue to refine its existing operations, focus on its costs, and continue to manage the risks inherent in its business. It will strive at every opportunity to improve the profitability of all that it does. "As I indicated to you at the beginning of my address some hard decisions have been taken and some short term loss of production has been incurred in order to reshape the business, to make the Company one of the world's lowest cost gold producers. This will insure that no matter how tough conditions ahead may become Newcrest will be able to endure those conditions as well, if not better, than the majority of its competitors. PASMINCO LIMITED: Releases September Quarter Production Result -------------------------------------------------------------- Pasminco Limited released its solid September quarter production result: SOLID SEPTEMBER QUARTER PRODUCTION RESULT 3 MONTHS 3 MONTHS ENDED ENDED (TONNES) 30/9/01 30/9/00 Mine production - contained zinc 211,321 194,028 - contained lead 68,146 47,226 Metal production - zinc 166,745 171,078 - lead(1) 79,950 64,353 ------- ------- Total production 526,162 476,685 (1) = Includes quenched bullion production from Cockle Creek smelter, all of which is now refined at Port Pirie. September quarter production of zinc and lead from the Company's mines and smelters was 10% higher than the corresponding quarter in 2000, and 2% higher than the previous quarter. The increase over the corresponding quarter in 2000 was driven largely by the impact of the continuing production ramp up at the Century mine. Highlights of the quarter were strong rebounds in lead and zinc production at Port Pirie following the blast furnace shutdown in the June quarter. MINING The Century mine produced 115,811 tonnes of contained zinc in concentrate, equivalent to 92% of rated capacity. Zinc recoveries were 75%, down marginally on the previous quarter, due mainly to the focus on maintaining acceptable silica levels in concentrate. Silica levels in zinc concentrate averaged 4.0% during the quarter. Process changes and more consistent feed grades to the mill are expected to lift recoveries by 1-2% in the December quarter. Lead concentrate production was 53,325 tonnes, but is expected to be lower in the December quarter due to the depletion of stocks of lead concentrate which had not been piped to the port at Karumba during project start-up. Contained metal output at Broken Hill was lower than both the previous quarter and corresponding quarter of last year, because of industrial action which primarily affected ore volumes and sandfill constraints underground requiring an adjustment to production plans. At Elura contained metal production was impacted by an unscheduled mill shutdown. Rosebery contained metal output was down marginally due to a variety of minor operational issues. Operations at Gordonsville and Clinch Valley were on track for the quarter. SMELTING Zinc metal production for the quarter was lower than both the previous quarter and the corresponding quarter in 2000. At Budel production was lower due to a planned roaster shutdown, while at Clarksville output was down slightly on the previous quarter. Stable operations were maintained at the Hobart and Cockle Creek smelters. Following a blast furnace shutdown at Port Pirie in the June quarter, Iead and zinc production rebounded strongly. METAL PRICES The zinc price continued to weaken over the September quarter, and as shown above has been in downtrend for the past 12 months. Brook Hunt commented in their September report: 'The tragic events of September 11 have overshadowed all markets and worsened the economic outlook. LME zinc stocks rose by a further 71,000 tonnes during the quarter. CURRENCY HEDGING Approximately 70% of the Company's currency option positions were closed out soon after the announcement of voluntary administration. The loss on close out was $647 million. BUSINESS IMPROVEMENT PROGRAM During October, every division exceeded its Business Improvement Program (BIP) initiatives target. On a cumulative basis, the BIP initiatives are well ahead of target, but offsetting adverse movements are larger than expected due to restructuring charges of $1.7 million and unexpected costs in Australian Smelting. The production and cost performance is continuing to improve across the Group with sound results at Rosebery and Elura and the Australian smelters. Century continues to perform strongly and is currently ahead of its targets. Overseas, the US mines and the Clarksville zinc plant continue to better their cost forecasts. Budel continues to perform well although its BIP results were lower during October as a result of the impact of a shut down. PRODUCTION STATISTICS FOR THE QUARTER ENDED 30 SEPTEMBER 2001 3 Months 3 Months Ended Ended 30/09/2001 30/09/2000 MINING BROKEN HILL MINE Ore Treated (Tonnes) 659,037 713,414 Assaying - Zinc % 6.7 6.7 - Lead % 2.8 3.6 - Silver g/t 32.0 44.2 Zinc Concentrate (Tonnes) 79,523 84,613 Containing - Zinc (Tonnes) 39,534 41,380 Lead Concentrate (Tonnes) 24,041 34,103 Containing - Lead (Tonnes) 16,063 22,201 - Silver (kg) 16,323 24,429 CENTURY MINE(*) Ore Treated (Tonnes) 1,329,259 1,223,861 Assaying - Zinc % 11.9 11.9 - Lead % 2.4 2.9 - Silver g/t 62.0 75.0 Zinc Concentrate (Tonnes) 198,300 175,780 Containing - Zinc (Tonnes) 115,811 102,415 - Silver (kg) 45,989 47,345 Lead Concentrate (Tonnes) 53,325 15,556 Containing - Lead (Tonnes) 35,063 9,905 - Silver (kg) 16,026 4,278 (*) = Century Mine was operational from 1 March 2000 CLINCH VALLEY MINE(*) Ore Treated (Tonnes) 95,794 79,746 Assaying - Zinc % 3.6 3.6 Zinc Concentrate (Tonnes) 5,331 3,948 Containing - Zinc (Tonnes) 3,329 2,472 (*) = Clinch Valley Mine was re-opened in July 2000 ELURA MINE Ore Treated (Tonnes) 280,903 247,062 Assaying - Zinc % 8.4 8.7 - Lead % 5.4 5.4 - Silver g/t 48.0 62.0 Zinc Concentrate (Tonnes) 38,317 36,286 Containing - Zinc (Tonnes) 19,304 18,695 Lead Concentrate (Tonnes) 19,946 17,591 Containing - Lead (Tonnes) 11,278 10,083 - Silver (kg) 6,443 6,720 GORDONSVILLE MINE Ore Treated Total (Tonnes) 428,429 462,424 Assaying - Zinc % 3.4 3.2 Zinc Concentrate (Tonnes) 21,498 21,637 Containing - Zinc (Tonnes) 13,942 13,915 ROSEBERY MINE Ore Treated Total (Tonnes) 173,809 158,548 Assaying - Zinc % 12.5 10.6 - Lead % 4.1 4 - Copper % 0.3 0.4 - Silver g/t 171.3 141.3 - Gold g/t 2.2 2 Zinc Concentrate (Tonnes) 35,215 26,845 Containing - Zinc (Tonnes) 19,401 15,151 Lead Concentrate (Tonnes) 8,809 7,574 Containing - Lead (Tonnes) 5,742 5,037 - Silver (kg) 11,521 9,967 - Gold (kg) 35 41 Copper Concentrate (Tonnes) 1,461 1,839 Containing - Copper (Tonnes) 324 420 - Silver (kg) 8,379 9,392 - Gold (kg) 159 115 Gold Dore (kg) 127 122 Containing - Gold (kg) 87 69 - Silver (kg) 35 32 SMELTING BUDEL ZINK Zinc (Tonnes) 47,658 51,452 CLARKSVILLE ZINC PLANT Zinc (Tonnes) 26,716 30,062 COCKLE CREEK SMELTER Zinc (Tonnes) 22,342 21,979 Lead Bullion (Tonnes) 10,131 9,081 HOBART SMELTER Zinc (Tonnes) 60,378 59,528 PORT PIRIE SMELTER Lead (Tonnes) 65,557 50,895 Zinc (Tonnes) 9,651 8,057 Silver (kg) 106,708 75,549 ARA (*) Lead (Tonnes) 4,262 4,377 (*) = Figures represent Pasminco's 50% share of ARA's total production PRESTON RESOURCES: Posts Bulong Operations' Q101 Report ------------------------------------------------------- Preston Resources Limited posted the first quarter activities report of its subsidiary Bulong Operations Pty Ltd: INTRODUCTION The Bulong project, located 30 kilometers east of Kalgoorlie, Western Australia, is managed by Preston's wholly owned subsidiary, Bulong Operations Pty Ltd. Following is a summary of the Bulong operational activities for the quarter ending September 2001. Detailed operational and financial performance can be obtained from monthly reports previously lodged with the ASX and is also available from our website (www.prestonres.com.au). Principal production statistics are shown in the attached table. SAFETY Changes were made to the Safety Management System to streamline procedures and produce more meaningful statistics to be utilized as key performance indicators. Similar management procedures have been implemented to monitor environmental impacts. The trend in both safety and environmental areas is improving. METALLURGICAL PERFORMANCE 153,505 dry tonnes of ore were fed to the leach plant during the quarter. A total of 1,691 tonnes of nickel was produced, 84 tonnes of cobalt and 8 tonnes of cobalt in cobalt sulphide. Leach extractions for nickel and cobalt were 91.9% and 91.4% respectively. LEACH PLANT 118,791 tonnes of ore was treated compared with 136,526 tonnes in the preceding quarter. The leach plant achieved good performance during the quarter however throughput was impacted by a three day scheduled shut which took place during July and unplanned maintenance spread over the quarter. Unplanned events included the collapse of baffles in heater vessels, the failure of mechanical seals on heater vessel feed pumps, high wear rates in plant piping and blockages in the autoclave feed pumps as a consequence of dislodgment of scale in the high pressure heater vessel. Whilst operational the leach plant regularly exceeded design throughput. REFINERY The cobalt solvent extraction circuit performance was enhanced during the quarter through the controlled addition of cobalt extractant, bringing the concentration up to 14% (design 15%). The cobalt extractant recovery and crud handling circuits were commissioned; these developments will lead to improved SX performance in the current quarter. The nickel solvent extraction circuit performance has been hampered by contamination of the organic phase by cobalt extractant. This will be rectified in October with the planned replacement of the organic inventory. Nickel electrowinning has performed satisfactorily and will further improve as the anode replacement program progresses. The cobalt refinery performance improved significantly with 91% of cobalt produced as metal (last quarter 39%). EXPLORATION Two phases of drilling were completed in the quarter. The first phase which was completed in August was focused on the Australia deposit, a total of 2,335 meters were drilled. The second phase was completed on Boulder Block in September for a total of 2,898 meters. One more round of drilling is due to commence in November 2001 to complete a resource estimate. Results from these resource estimations will be used for future mine scheduling. NICKEL PROCESSING DEVELOPMENT Modifications were made to the ore preparation circuit to reject low grade product streams. This has resulted in 10-12% upgrade in nickel and cobalt values being achieved. It is envisaged that with further minor modifications this can be raised to 15%. Attention continues to be focused on a long term cost effective solution to gypsum scaling in the nickel solvent extraction circuit. Pilot work performed by the A J Parker CRC for Hydrometallurgy demonstrated that selected atitiscalant chemicals are effective in reducing the extent of scale in file SX circuit. These antiscalants are currently undergoing an intensive screening process for potential deleterious side effects. Successful completion of the screening process will result in full-scale testwork in the, current quarter. In parallel with the above and in conjunction with Billiton, the A J Parker CRC is working on the development of synergistic extractants using Bulong process solutions. Agreement was reached with WMC regarding the trial processing of nickel and cobalt bearing residues from the Kwinana Nickel Refinery. A 1,000 tonne sample was delivered to Bulong site and two trial campaigns were completed. Processing of the material verified the feasibility of treatment and yielded valuable information on the deportment of copper impurities. As a result of the trial, Bulong and WMC have conducted testwork to develop a copper removal process. Full-scale testwork will commence in the current quarter. A number of orebody specific leach tests have been conducted as part of the atmospheric leaching program with encouraging results. The Company has had several strong expressions of interest to contribute to the syndicated research program and is investigating the most appropriate corporate packaging to provide cost effective participation to contributors. MARLBOROUGH NICKEL PROJECT The Marlborough nickel project, located on the central Queensland coast, 75km north west of Rockhampton, hosts one of the largest nickel deposits in the world, with a global resource of 210 mt grading, 1.02% nickel and 0.06% cobalt contained within ten separate deposits. The project remains on care and maintenance. CORPORATE The Company is continuing to negotiate with Barclays and the bondholders to restructure Bulong project debt and further details will be released as arrangements are finalized. PRODUCTION STATISTICS Sept 2001 QTR 2001/2002 FINANCIAL YTD Mine Production (High Grade) t 98,860 98,860 Nickel Grade % 1.68 1.68 Cobalt Grade % 0.12 0.12 PROCESSING Ore Leached t 118,791 118,791 Nickel % 1.78 1.78 Cobalt % 0.12 0.12 AUTOCLAVE EXTRACTIONS Nickel % 91.9 91.9 Cobalt % 91.4 91.4 Nickel Leached t 1,939 1,939 Cobalt Leached t 135 135 REAGENT USAGE Acid kg/t ore 435 435 Limestone kg/t ore 133 133 METAL PRODUCED Nickel t 1,691 1,691 Cobalt t 84 84 Cobalt in Cobalt t 8 8 Sulphide PROCESS INVENTORY Nickel t 202 202 Cobalt t 31 31 ================================ C H I N A & H O N G K O N G ================================ CIL HOLDINGS: Audited Results, Annual Report Dispatch Delayed ------------------------------------------------------------- The directors of CIL Holdings Limited (the Company) announced that there will be a delay in the publication of the results of the Group for the year ended 30th June 2001. Pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules), the annual report for the year ended 30th June, 2001 including its audited annual accounts has to be published and sent to shareholders within four months from the end of the financial year pursuant the Listing Rules applicable to the Company at the material times. The Company proposes to change its auditors, which is the reason for the delay. The present auditors have yet to resign, however, the Company is currently in talks with the new auditors. The new auditors will commence audit on the Group's accounts once its appointment has been confirmed. Upon preliminary discussion with the potential new auditors, the Directors anticipate that the announcement of the final results of the Company for the year ended 30th June 2001 will be postponed to be published on or before 31st December, 2001 and the dispatch of the annual report to approximately three weeks thereafter. In relation to the unaudited results, the Company is in the process of finalizing its accounts for the year ended 30th June 2001 and expects the publication of the unaudited results for the same period to be on or around 30th November 2001. The Company will make a further announcement once the unaudited results of the Company become available. The delay in the publication of the audited consolidated final results and the delay in the dispatch of the annual report constitute a breach paragraph 8(1) and 11(1) of Appendix 7b of the Listing Rules at the material times. In this regard, the Stock Exchange of Hong Kong Limited (the Stock Exchange) reserves its right to take appropriate action against the Company and/or its Directors. The Directors have not dealt in the shares of the Company since 1st May, 2001 and have undertaken to the Stock Exchange that they will not deal in the shares of the Company until the audited consolidated final results for the year ended 30th June, 2001 are released and published. HONRICH INTERNATIONAL: Winding Up Sought By Hua Chiao ----------------------------------------------------- Hua Chiao Commercial Bank Limited Hong Kong Branch (whose undertakings have been succeeded by Bank of China (Hong Kong) Limited is seeking the winding up of Honrich International Limited. The petition was filed on August 7, 2001, and will be heard before the High Court of Hong Kong on November 14, 2001. Hua Chiao holds its registered office at Bank of China Tower, 1 Garden Road, Central, Hong Kong. GOLDEN PIONEER: Winding Up Petition Hearing Set ----------------------------------------------- The petition to wind up Golden Pioneer Investment Limited is set for hearing before the High Court of Hong Kong on November 28, 2001 at 9:30 am. The petition was filed with the court on August 14, 2001 by Sin Hua Bank Limited, Hong Kong Branch (whose undertakings have been succeeded by Bank of China (Hong Kong) Limited whose registered office is situated at Bank of China Tower, 1 Garden Road, Central, Hong Kong. KELON ELECTRICAL: Changes Single Largest Shareholder ---------------------------------------------------- The Board of Directors of Guangdong Kelon Electrical Holdings Company Limited announced that it has been informed by GKG, the single largest shareholder of the Company holding 337,915,755 legal person shares in the Company representing approximately 34.06% of the existing issued share capital of the Company, that it entered into an October 29 sale and purchase agreement with Greencool pursuant to which GKG has agreed to sell to Greencool a total of 204,775,755 legal person shares in the Company, representing approximately 20.64% of the existing issued share capital of the Company for a total consideration of RMB560,000,000. Immediately following Completion, GKG will hold 13.42% of the existing issued share capital of the Company and Greencool will become the single largest shareholder of the Company by virtue of its shareholding of 20.64% of the existing issued share capital of the Company. Greencoo1 is not connected with GKG, the Company, the directors, chief executive or substantial shareholders of the Company or its subsidiaries or any of their respective associates (as defined in the Rules Governing the Listing of Securities on the Stock Exchange). Trading in the shares of the Company was suspended at the request of the Company with effect from 10:00 a.m. on 30 October 2001 pending the release of this announcement. Application has been made to the Stock Exchange for the resumption of trading of the shares of the Company with effect from 10:00 a.m. on 1 November 2001. NAM HING: Petition To Wind Up Slated ------------------------------------ The petition to wind up Tai Embroider Company Limited will be heard before the High Court of Hong Kong on November 28, 2001 at 9:30 am. The petition was filed with the court on August 15, 2001 by Yiu Hing Leung of Flat F, 12th Floor, Cheong Tai Building, 36 Tai Ho Road, Tsuen Wan, New Territories, Hong Kong. ================= I N D O N E S I A ================= BANK UNIBANK: Executives Banned From Travel Aboard -------------------------------------------------- Finance minister Boediono ordered the Directorate General of Immigration to deny PT Bank Unibank Tbk's (Unibank) executive board members the privilege to travel abroad, IndoExchange reported Tuesday, after Unibank's liquidation and freeze under IBRA's supervision on Monday. "Those who were banned were parties that, according to Bank Indonesia, had relations to unsettled Unibank's liabilities," Boediono said refusing to reveal the names of the banned executives. Meanwhile, Chairman of Capital Market Supervisory Board (Bapepam) said that Bapepam would examine whether Unibank shares' ownership was given to a foreign party. TIMAH TBK: Financial Condition At Critical Stage ------------------------------------------------ PT Timah Tbk (TINS), which is predicted to suffer a cash flow deficit at the end of 2001 as the result of increasing number of illegal miners, is in critical condition following its declining financial performance, Bisnis Indonesia reported Thursday. "We are in a critical condition and need three to four parallel efforts to fix financial performance," TINS President Director Erry Riana Harjapamekas said at an extraordinary shareholders' meeting, which decided to cancel plan to distribute the second batch of dividend worth Rp59.86 billion on 13 December 2001. In order to save the company, Management is planning to take cost cutting measures such as dropping operations of the high cost dredge from 22 units to only 12 units, halting land mining, and delaying expansions. In addition, cutting the number of employees by around 3,750 or around 80% of the total 5,211 employees is another if the tin price remains at around US$3,500-US$3,750 per ton. "The company needs around Rp338 billion to restructure the company's financial performance. The state tin company is also looking into a possible merger, acquisition, and being acquired by other state companies or private companies," Harjapamekas said. The worst scenario possible, if the condition of TINS worsens by the end of 2001, is liquidation, he added. "Liquidation is the last alternative." TINS incurred a net profit of Rp25 billion per September 2001, dropping 92% from the same period last year, which stood at Rp296 billion. The operation profit fell 44% from Rp343 billion to only Rp191 billion due to an increase in production cost by 4% to Rp1.1 trillion from Rp780 billion. ========= J A P A N ========= MATSUSHITA ELECTRIC: Implementing 8,000-Employee Job Cut -------------------------------------------------------- Matsushita Electric Industrial Co Ltd will cut some 8,000 jobs via early retirement in the second half of the fiscal year to March, PRNews reported Wednesday, quoting a company official. The company, which currently employs 139,000 staff, hopes that the move will generate annual savings of Y100 billion from the next fiscal year. A total of Y158 billion in savings is also expected from a variety of restructuring programs to be implemented in the second half. ========= K O R E A ========= DAEWOO CONSTRUCTION: Eased Sanctions Will Bring In US$500M ---------------------------------------------------------- Daewoo Construction is expected to receive some US$500 million in accounts receivables from Pakistan due to the lifting of economic sanctions imposed against the country by the United States, the Korea Herald reported on November 1. The Pakistani government previously entered into a construction agreement with Daewoo for an expressway project worth US840 million, to be paid in installments between 1998 and 2008. Pakistan was to complete the payment of only one installment in 1998 because of its worsening economic conditions. However, U.S. support for Pakistan has heightened the possibility that the debt payments to Daewoo are to be paid in the near future. On the status of the remaining debt, a Daewoo official was quoted as saying "Since we have received insurance payments from the Korea Export Insurance Corp., the remaining claims amount to some $500 million. We are already receiving inquiries from U.S. pension funds which want to purchase our accounts receivable." Daewoo Construction is currently undergoing a creditor-imposed debt workout program. DAEWOO MOTOR: GM May Take Over Bupyong Plant in Six Years --------------------------------------------------------- Contrary to previous reports, Daewoo Motor Corporation's aging Bupyong Plant may be acquired by General Motors Corp. (GM) in six years, the Asian Wall Street Journal reported Wednesday, citing Daewoo chairman Lee Jong-dae. Lee previously issued a statement saying that GM is expected to include the aging car plant in its acquisition list after the expiration of their bilateral marketing cooperation contract in 2007 or 2008. However, GM Asia-Pacific director Allan Perriton said that the American auto giant should make its final decision on Bupyong's acquisition only after maintaining a marketing relationship over the six years. HYNIX SEMICONDUCTOR: Creditors Finally Agree on Bailout ------------------------------------------------------- A bailout plan for the ailing Korean chipmaker Hynix Semiconductor was finally approved by its creditors, paving the way for the company's eventual recovery, the Asian Wall Street Journal reported on October 31. Hynix main creditor Korea Exchange Bank announced that the bailout requires lenders to convert W4 trillion of their loans into bonds convertible into Hynix shares after six months. By early December, six creditor banks will extend the some W650 billion of fresh funds to Hynix, in order for it to make facility investments. The bailout plan however sparked serious concerns from foreign investors and bankers who saw the move as an intervention on the part of the South Korean government on the country's corporate sector. Under World Trade Organization (WTO) guidelines, private companies can't receive direct financial assistance from the state, and in this case the government owns large stakes in several of Hynix's creditor banks. Thus, investors see the injection of fresh funds from creditor banks as tantamount to an injection of government money into the ailing chipmaker. HYUNDAI CONSTRUCTION: To Supply Steel Pipes to India ---------------------------------------------------- Hyundai Corporation will supply 20,000 tons of steel pipes worth US$7 million to an Indian oil company, BPCL, from December 2001 until February 2002, the Korea Herald reported yesterday. The steel pipes, which are manufactured by SeAh Steel Corporation, shall be supplied in three shipments. Hyundai sells an annual average of over 30,00 tons of steel pipes India and has done so for the past 10 years. India's steel pipe market is estimated at US$100 million a year. The construction company is currently undergoing a rigorous self-rescue program that saw it spinning off several of its units in order to save on labor costs. HYUNDAI SECURITIES: Sale Talks With AIG to Continue --------------------------------------------------- Contrary to earlier reports, negotiations between Hyundai Securities Co. and American International Group (AIG) on the acquisition of controlling stakes in Hyundai Securities, Hyundai Investment & Trust Co. and subsidiary Hyundai Investment Trust Management Co., have not fallen apart, according to a Korea Herald report yesterday, citing a statement by the Financial Supervisory Commission (FSC). According to the FSC, the government plans to close the deal as soon as possible considering that the preliminary agreement signed by the parties is effective only until yearend. AIG, together with U.S.-based investment firm W.L. Ross Co. and the government signed the preliminary agreement to acquire the said controlling stakes for W1.1 trillion. Earlier reports cast doubts on whether the sale would continue because AIG made new demands to which Hyundai protested because they were not part of the preliminary agreement. The financial watchdog confirmed that the negotiations were stalled but only because AIG needed more time to review legal matters as a result of the Sept. 11 attacks. HYUNDAI SECURITIES: Union Lawsuit Dropped By Local Court -------------------------------------------------------- A lawsuit filed by Hyundai Securities Co.'s labor union to block the planned investment of American International Group Inc. and W.L. Ross & Co., was dismissed by a local court, according to a Wednesday Asian Wall Street Journal. The injunction filed by the union specifically aimed to prevent Hyundai from issuing new preferred shares to the investors at W7,000 per share. The union pointed out that the issuance at the said amount would hurt shareholder value. The court however dismissed the case for lack of evidence, prompting union officials to declare that they will file another lawsuit but this time to ban the share issue. The lawsuit was one of the remaining stumbling blocks in the negotiations for the acquisition of controlling stakes in Hyundai Group's three affiliates, Hyundai Securities, Hyundai Investment Trust & Securities Co. and its unit, Hyundai Investment Trust Management Co. KOREAN AIRLINES: More Than 1,000 Job Cuts Scheduled --------------------------------------------------- Korean Air plans to lay off 6 percent of its work force, totaling more than 1,000 workers, by yearend. The airline hopes the decision will help it get through the increasingly worsening economic slump and the negative impact of the September 11 attacks on the global airline industry, the Korea Herald reported on November 1. The September 11 attacks also prompted a very sharp increase in insurance fees. As part of the downsizing, the country will retire 25 executives, about 20 percent of the total number. As part of the planned layoffs, the company will retire 25 executives, or 20 percent of the total. Korea's largest carrier aims to save around W150 billion for the year as a result of the job cuts and other cost-reduction efforts. In an effort to cut costs, the company has already reduced the number of its domestic offices from 32 to 21. Overseas branches were also reduced from 74 down to 63. =============== M A L A Y S I A =============== EPE POWER: Further Defaults Interest Payment -------------------------------------------- EPE Power Corporation Berhad (he Company), subsequent to the announcement dated 15 October 2001, has further defaulted in the payment of monthly interest of RM494,419.20 due to several banks (Lenders) under its revolving credit (RC) facilities. The total principal outstanding on the RC facilities as at 31 October 2001 is RM94.6million. With the assistance of financial advisor Commerce International Merchant Bankers (CIMB), the Company has presented a debt restructuring scheme to the Lenders and the debt restructuring agreement and relevant documentation are currently under preparation. KELANAMAS IND: Rescue Plan Obtains Regulatory Approval ------------------------------------------------------ Kelanamas Industries Berhad (KIB or the Company), in reference to the First Announcement on 20 February 2001 pursuant to Practice Note 4/2001 issued in relation to Criteria and Obligations Pursuant to Paragraph 8.14(2) of Kuala Lumpur Stock Exchange (KLSE)'s Listing Requirements, announced: The Proposed Rescue cum Restructuring Scheme and Proposed Special Warrants Issue are conditional upon approvals of the following being obtained: 1. the Securities Commission (SC); 2. the Foreign Investment Committee (FIC); 3. the KLSE, for the transfer of the listing status of KIB to NEWCO and the subsequent listing of and quotation for the NEWCO Shares arising from the Proposed Rescue cum Restructuring Scheme; 4. the KLSE, for the admission of the NEWCO Warrants 2001/2004 pursuant to the Proposed Special Warrrant Issue on the Official List of the KLSE and for the listing of and quotation for the NEWCO Warrants 2001/2004 as well as NEWCO Shares to be issued upon exercise of the NEWCO Warrants 2001/2004; 5. the High Court pursuant to Section 64 and Section 176 of the Companies Act, 1965; 6. the shareholders of KIB at a general meeting to be convened; 7. the shareholders of NEWCO at a general meeting to be convened; and 8. any other relevant authorities. Status of the Proposed Rescue cum Restructuring Scheme are as follows: I. FIC has approved the application vide a letter dated 19 December 2000 subject to a condition that the NEWCO incorporated pursuant to the Proposed Rescue cum Restructuring Scheme shall have at least 15 % Bumiputra participation by 30 June 2001. Subsequently based on an appeal by KIB, FIC via a letter dated 24 March 2001 has extended the period from 30 June 2001 to 1 January 2002. II. On 11 April 2001, KIB obtained a Court Order to extend the time period to convene the Court Convened Meeting for a further period of ninety (90) days from 11 April 2001. An application will be made by the Company to obtain to convene the Court Convened Meeting pending the outcome of our appeal application to SC. III. SC has rejected the Proposed Rescue Cum Restructuring Scheme vide a letter dated 13 June 2001 as SC deems that DB is not suitable to undertake the rescue and restructuring of KIB. On 18 June 2001, the Board of Directors of KIB has resolved that an application will be made by the Company to appeal against the SC's above said decision within one (1) month from 13 June 2001. The appeal application was submitted to SC on 14 July 2001. SC has revised and approved the total valuation of the landed properties of Dolomite Berhad and its subsidiary companies at RM 222,570,000 vide its letter dated 5 September 2001. KIB has made an application to KLSE on 10 September 2001 for an extension of time of three (3) months from 14 September 2001 in order to comply with the Practice Note 4/2001 in relation to Criteria and Obligation of the KLSE's Listing Requirement. However, KLSE has approved an extension of two (2) months from 15 September 2001 to 14 November 2001 to enable the Company to resubmit the revised Proposed Scheme to the Securities Commission. LAND & GENERAL: Unit's Winding Up Petition Hearing Postponed ------------------------------------------------------------ The Board of Directors of Land & General Berhad informed that the Court has postponed the hearing date of the winding-up petition of Lang Furniture (Selangor) Sdn Bhd, a wholly-owned subsidiary of the Company, to 7 December 2001. NCK CORPORATION: No Change in Defaulted Payment Status ------------------------------------------------------ NCK Corporation Berhad (Special Administrators Appointed), in compliance with Practice Note No. 1/2001, announced that there is no change to the details in respect of the default in payment to the Lenders as announced previously on 28 September 2001 other than a repayment of RM458,800.00 by a project debtor, Idaman Tegas Sdn Bhd under the terms of a Contract Assignment Agreement entered into between Idaman Tegas Sdn Bhd, RHB Bank Berhad and Perumahan NCK Sdn Bhd (PNCK), a subsidiary of NCK Corporation Berhad. PNCK's amount owing to RHB Bank Berhad is accordingly reduced by the above mentioned RM458,800.00. PICA (M) CORPORATION: Director Haju Ali Resigns as Director ----------------------------------------------------------- Pica(M) Corporation Berhad posted Change in Audit Committee notice: Date of change : 19/10/2001 Type of change : Resignation Designation : Director Directorate : Non Independent & Non Executive Name : Dato'Mahmud Bin Haji Ali Age : 56 Nationality : Malaysian Qualifications Bachelor of Arts, University Malaya; Diploma in Management, Malaysian Institute of Management Working experience and occupation Formerly a directors of TA Securities Bhd, a member company of KLSE Directorship of public companies (if any): Rapid Synergy Bhd Family relationship with any director and/or major shareholder of the listed issuer: Nil Details of any interest in the securities of the listed issuer or its subsidiaries Direct-97,733 shares or 0.09% as at 30/06/2001; Indirect- 1,197,291 shares or 1.10% as at 30/06/2001 Composition of Audit Committee (Name and Directorate of members after change) En. Subki bin Haji Ahmad (Independent & Non Executive Director); Mr. Noel John A/L M. Subramaniam (Independent & Non Executive Director) Remarks : Dato' Mahmud Bin Haji Ali was the chairman of the Audit Committee. RENONG BERHAD: Subsidiary PUTRA Remains In Default -------------------------------------------------- Renong Berhad (Renong) announced that further to the announcement made on 29 September 2001, Projek Usahasama Transit Ringan Automatik Sdn Bhd (PUTRA), a wholly owned subsidiary of Renong, has remained in default of its interest servicing obligations in respect of its RM2.0 billion Commercial Financing Facilities. The outstanding interest/profit payment as at 30 October 2001 is RM401.2 million. On 20 April 2001, PUTRA has requested that its financiers extend the moratorium period on the interest/profit payments and waive the penalty margin of 1% per annum (where applicable) on all interest/profit payments outstanding for the period beginning 30 September 1999 until PUTRA's Proposed Debt Restructuring Scheme (the "Scheme") is in place. The decision from the financiers on this matter is still pending. Currently, PUTRA is working closely with the relevant agencies on the Scheme. RENONG BERHAD: Utilizes Proposed Acceptances To Redeem Bond ----------------------------------------------------------- On behalf of Renong Berhad (Renong or Company), Alliance Merchant Bank Berhad (formerly known as Amanah Merchant Bank Berhad) announced that on 30 October 2001, the entire proceeds of approximately RM1,394 million from the proposed acceptances by Renong and Cantuman Bahagia Sdn Bhd, a wholly-owned subsidiary of Renong, of the conditional voluntary offer involving the disposal of 309,795,506 ordinary shares of RM0.50 each in United Engineers (Malaysia) Berhad to Syarikat Danasaham Sdn Bhd for a total cash consideration of RM1,394,079,777 (Proposed Acceptances) have been utilized to partially redeem the 7-year zero coupon redeemable secured bond issued by Renong Debt Management Sdn Bhd, a subsidiary of Renong, to Projek Lebuhraya Utara-Selatan Berhad. SELOGA HOLDINGS: Awaits KLSE's Reply Re Extension Requests ---------------------------------------------------------- Seloga Holdings Berhad (SHB or the Company) is still in the process of preparing and finalizing a detailed plan to regularize their financial condition with its advisers and bankers. However, due to the current uncertainties and adverse economic conditions worldwide brought about by events of 11 September 2001, it has been very challenging and increasingly difficult for the Company to finalize the plan to regularize its financial condition before the Dateline. The Company also requires more time to consider various proposals which may involve fund raising and the sourcing of the necessary funds/financing is imminent to finalize the structure of the proposals and to ensure the certainty of the proposals to be undertaken. In light of the current weak economic and share market condition, the sourcing is likely going to require a longer time than the timeframe currently permitted by the KLSE. On 17 October 2001, the Company applied to the KLSE for a further extension of three (3) months from 1 November 2001 to 1 February 2002 for the Company to regularize its financial plan the soonest possible. As to date, the Company is awaiting a decision from the KLSE on granting SHB an extension of time. SRI HARTAMAS: Auditors' Issue Opinion on H101 Report ---------------------------------------------------- The Auditors of Sri Hartamas Berhad have issued a disclaimer of opinion in their report for the financial year ended 30 June 2001 due to: 1. Appointment of Special Administrators In the previous financial year, Pengurusan Danaharta Nasional Berhad (Danaharta) had on 16 June, 2000 appointed Special Administrators to the Company. During the financial year, Danaharta had also appointed Special Administrators to the following five subsidiaries of the Company: Date of Appointment Affected Subsidiaries (a) 21 August 2000 Sri Hartamas Hotels Sdn Bhd (b) 18 October 2000 Cempaka Mewah Sdn Bhd Mawar Tiara Sdn Bhd Mewah Rembang Sdn Bhd Puncak Permata Sdn Bhd The Special Administrators are currently in the process of preparing or implementing various workout proposals that could involve changes as to the amounts and classification of certain balance sheet items, the final outcome of which is uncertain as at the date of this report. 2. Issue on Going Concern As at 30 June, 2001, the audited financial positions are as follows: Group Company 2001 2000 2001 2000 RM'000 RM'000 RM'000 RM'000 Net loss for the year 364,017 197,706 213,192 133,540 Net current liabilities 684,033 456,605 579,005 554,737 Shareholders' deficit 461,335 97,249 249,454 36,262 The above financial position raises substantial doubt that the Group and the Company will be able to continue as a going concern. The ability of the Group and the Company to continue as a going concern is dependent on the on-going negotiation with their bankers' and secured creditors, the success of future operations and the outcome of the various workout proposals currently being prepared or implemented by the Special Administrators and their subsequent approval and successful implementation. In addition to the adjustments already made in the financial statements, further adjustments relating to the recoverability of the assets, carrying amount and their classification or to the amount and classification of liabilities might be necessary should the Group and the Company be unable to continue as a going concern. Legal Suit Against Metrolux Sdn Bhd On 11 August, 2000, the High Court of Kuala Lumpur (High Court) found Metrolux Sdn. Bhd. (Metrolux), one of the subsidiaries of the Company together with MBf Property Services Sdn. Bhd. to be jointly liable for 20% of the damages sustained by the residents of Blocks 2 and 3 of Highland Towers (the Suit). Metrolux being one of the ten defendants in the Suit, had lodged a Notice of Appeal against the High Court's decision. Subsequently, Metrolux has decided not to proceed with the appeal. The maximum exposure, if any, arising from the judgment amounts to RM20 million as advised by Metrolux's solicitors. However, the eventual quantum of the damages has not been assessed by the High Court as at the date of this report as certain defendants had appealed against the High Court's decision. The assessment of the eventual quantum of the damages has been deferred pending the decision of the Court of Appeal. As a result, there is an uncertainty as to the ultimate exposure to Metrolux. Pending the outcome of the assessment, the directors of Metrolux are unable to assess the eventual quantum of the damages, if any, and no provision for any liability that may result has been made in the financial statements of Metrolux or the Group for the financial year ended 30 June, 2001. In addition to the above, two separate suits have been filed with the High Court for loss of lives, property losses and compensation in relation to the collapsed Block 1 of Highland Towers. These suits have been put in abeyance pending the outcome of the Suit. Metrolux is one of the nine defendants in the suits of Block 1. The directors of Metrolux are unable to ascertain the quantum of damages, if any, at this juncture. Operations of The Group The activities of the Group and the Company have been significantly curtailed while certain development activities have been deferred, pending the preparation and eventual implementation of the various workout proposals. The recoverability and the viability of the development properties of the Group and the Company are dependent on the successful implementation of the various workout proposals, the outcome of on-going negotiations with the Group's bankers and creditors and the success of the future operations of the respective subsidiaries. Winding-up of Sri Hartamas Contractors Sdn Bhd On 20 March, 2001, an order was issued to wind up Sri Hartamas Contractors Sdn. Bhd. (In liquidation) (Contractors), one of the wholly owned subsidiaries of the Company, by the Kuala Lumpur High Court for failure to settle judgment sum of approximately RM440,000 owing to Oriental Enterprise Sdn Bhd. The Board of Directors of Contractors has filed an affidavit to set aside the winding up order on various grounds. As at the date of this report, there is an uncertainty as to whether the Company has lost its effective control over the assets and management of Contractors and Metrolux, a wholly owned subsidiary of Contractors, as the appointed liquidator has not taken control of Contractors. In view of the above uncertainties, the financial statements of Contractors and Metrolux continue to be consolidated. TAI WAH: Buy-in Team In Negotiations With Potential Investors ------------------------------------------------------------- Tai Wah Garments Manufacturing Berhad (TWGB or the Company), in compliance with Kuala Lumpur Stock Exchange Practice Note No. 4/2001, updated the status of its proposed restructuring exercise to regularize its financial condition for the month ended October 2001. The Special Issues subscribers being the Management Buy-in team and the Bumiputra investors are still in the negotiation stage with potential funders for the financing of the special issue shares. TECHNOLOGY RESOURCES: SC Rejects Naluri's Proposal -------------------------------------------------- Technology Resources Industries Berhad has been informed by Naluri Berhad (Naluri) that the Securities Commission (SC) has rejected the proposal by Naluri to utilize the remaining proceeds raised from the disposal of its equity interest in Malaysian Airlines System Berhad to participate in the proposed restricted issue of up to 724,138,000 new ordinary shares of the Company of RM1.45 each and the proposed subscription of the excess shares not subscribed for by the shareholders of the Company pursuant to the proposed rights issue of up to 840,907,661 new ordinary shares of RM1.00 each, as announced by the Company on 28 June 2001. The Company has also been further informed that Naluri will be appealing the decision to the SC. UNIPHOENIX CORPORATION: Incurs RM65M Audited Loss ------------------------------------------------- Uniphoenix Corporation Berhad (UCB) announced that for the financial year ended 30 June 2001 the Group reported an audited loss after tax and minority interests of RM65.0 million representing an increase of 70.7% as compared to the announced unaudited cumulative net loss recorded in the 4th quarter result of RM38.1 million. The reconciliation for the deviation of the results is: RM'000 Net loss for the year as reported in the cumulative 4th quarter result (38,062) Loss derived from de-consolidation of Rubfil Sdn Bhd (Rubfil) accounts (27,611) Minority interest over taken up in previous Year now adjusted 637 Other audit adjustments 72 Net loss for the year as per the audited accounts (64,964) Based on the above reconciliation, the increase in net loss is mainly attributed to the de-consolidation of Rubfil accounts. The Rubfil accounts were de-consolidated because the audited accounts of Rubfil were not available and the Directors of UCB are of the view that UCB was unable to exercise management control over the affairs of Rubfil. The Directors of UCB are of the opinion that the consolidated accounts would be misleading if the unaudited results of Rubfil is consolidated into the Group accounts due to the uncertainty on the existence and the carrying values of the assets as well as the completeness of the liabilities recorded. UCB is not in a position to exercise control over the management and Board of Rubfil because none of the directors of UCB is a director on the Board of Directors of Rubfil. UCB did not appoint any representatives to the Board of Rubfil because on 5 August 1998 the Company has entered into a sale and purchase agreement (SPA) with Rubpro Sdn Bhd to dispose its entire shareholding of 84% in Rubfil for a cash consideration of RM1.00. Pursuant to the SPA, all the representatives of UCB had resigned as directors of Rubfil. However, as to date, the disposal has not been completed, as the purchaser could not fulfill certain conditions required for completion. If the Rubfil accounts were not de-consolidated, the Group would have reported a net loss of RM37.4 million, a mere difference of 1.9% as compared to the unaudited cumulative net loss registered in the 4th quarter result. ===================== P H I L I P P I N E S ===================== NATIONAL POWER: Coal Demand to Drop 33% -------------------------------------- The coal demands of the National Power Corporation (Napocor) are expected to go down to 4.12 million metric tons in 2002 from 6.17 million tons (33 percent) in 2001 due to the rising consumption of Malampaya natural gas for power generation, the Asian Wall Street Journal reported. The coal consumption is expected to drop when the three power plants to be fueled by Malampaya will be fully operational, in 2002. The development of the Malampaya gas field forms part of the government's strategy to diversify its energy sources and shift its energy dependence from expensive imported sources to indigenous sources. By the year 2002, Malampaya natural gas will account for about 25 percent of the country's power needs. The coal forecast is based on demand by its four coal-fired plants connected to the Luzon grid. The ailing state-run power firm is up for privatization early next year and much recently, the Philippine government has decided to buy P11 billion worth of Napocor notes in order to provide bridge financing to enable the company to settle maturing debts. PILIPINO TELEPHONE: PLDT Acquires More Shares --------------------------------------------- Philippine Long Distance Telephone Co. (PLDT) plans to acquire 45,893 preferred shares of its mobile telephone unit, Pilipino Telephone Corp. at P1,000 each, according to a report by the Asian Wall Street Journal on Wednesday. The P45,893,000 purchase of Piltel's preferred shares is part of the ongoing restructuring of the cash-strapped mobile phone company's P39 billion debt. ================= S I N G A P O R E ================= CHEW EU: Seeks Ways to Improve Financial Position ------------------------------------------------- In light of Chew Eu Hock Holdings Ltd and its subsidiaries (the CEH Group) present financial situation, the Board of Directors (the Board) have been seeking ways to revive the CEH Group's financial position. The Board announced that the following measures are being proposed: 1. A major shareholder of CEH, Mr Chew Eu Hock himself, had loaned in the previous year and in the year under review some S$13.1 million to the Company. It is proposed that Mr Chew converts his loan into new CEH shares. 2. Trade and unsecured creditors, other than related companies (the "Creditors") are owed monies by the Company's principal construction subsidiary, CEH Construction. It is proposed that they convert their claims into new CEH shares. The proposal is to be put forward to the creditors through a scheme of arrangement (the "Scheme"). 3. The Scheme by CEH Construction with the Creditors will be pursuant to section 210 of the Companies Act, cap. 50 of Singapore (the "Companies Act"). 4. To facilitate the Scheme, the submission of a petition for an order for CEH Construction to be placed under judicial management. 5. To facilitate the new issues of shares to Mr Chew and the Creditors, a capital reduction exercise to reduce the par value of each ordinary share in the capital of the Company from S$0.20 to S$0.01. Further details are set out in the relevant sections below. As announced on 22 August 2001, the Company had signed a memorandum of understanding with Hiap Hoe in relation to a proposed acquisition of certain property investment and property development companies from Hiap Hoe (the "Hiap Hoe Companies") in consideration for the issue of new shares in the capital of the Company representing a controlling stake to Hiap Hoe. The Board is pleased to announce that CEH, Hiap Hoe and Mr Chew Eu Hock have on 30 October 2001 entered into a supplemental memorandum of understanding (the "Supplemental MOU") setting out in greater detail the commercial terms and proposed structure of the Acquisition with a view to the preparation of definitive and formal agreements between the parties. Details of the Supplemental MOU are set out in the section "Supplemental MOU with Hiap Hoe". As mentioned in the Company's announcement of 22 August 2001, the Hiap Hoe Group is an established group in Singapore with the Hiap Hoe Companies primarily involved in property investment and property development in Singapore. The properties owned by the Hiap Hoe Companies include Bukit Panjang Plaza, Hougang Green shopping mall and properties at 8 Jalan Rama Rama, 25, 25A and 27 Moonstone Lane and Sarinaville at 54 Sims Avenue East. The Directors believe that there is synergy between the property related activities of the Hiap Hoe Companies and the construction activities of the CEH Group and that a combination of the two would be mutually beneficial for both parties. The CEH Group's financial position would also be significantly enhanced by the acquisition of the property-based businesses of the Hiap Hoe Companies. As at 31 July 2001, the consolidated net tangible assets ("NTA") of the CEH Group based on the full year financial results was approximately a negative S$2.9 million. If the Scheme is successfully implemented, the CEH Group will have an NTA of approximately S$20 million to S$40 million, prior to the Acquisition. For purposes of illustration, the indicative combined NTAs of the Hiap Hoe Companies is estimated to be between S$85 million and S$105 million. For illustration purposes only, taking the median of S$95 million as the value of the Hiap Hoe Companies, the consolidated NTA of the enlarged CEH Group would be approximately S$115 million to S$135 million. The Directors therefore believe that if the capital reduction, the Scheme and the Acquisition are successfully completed, the CEH Group's position will be stabilized and with the injection of the new businesses from Hiap Hoe Companies, the CEH Group would be positioned for a full recovery. SUPPLEMENTAL MEMORANDUM OF UNDERSTANDING WITH HIAP HOE As mentioned above and further to the announcement released by the Company on 22 August 2001, the Board is pleased to announce that the Company, Hiap Hoe and Mr Chew Eu Hock have on 30 October 2001 signed the Supplemental MOU. Details of the Supplemental MOU are as follows: Terms of the Supplemental MOU Pursuant to the Supplemental MOU, and subject to satisfactory due diligence by both parties, the parties will enter in a definitive put and call option agreement (the "Option Agreement") by 30 December 2001 (or such other date as may be agreed between the parties) whereby: (a) Hiap Hoe will grant the Company an option (the "Call Option") to acquire all of the issued and paid up shares (the "Acquisition Shares") in the capital of each of the Hiap Hoe Companies; and (b) the Company will grant Hiap Hoe an option (the "Put Option") to require the Company to acquire all of the Acquisition Shares. The purchase consideration for the Acquisition Shares (the "Purchase Consideration") shall be determined according to a certain formula agreed between the parties and, subject to the Capital Reduction (details of which are set out below) being effected, it is proposed that the Purchase Consideration shall be satisfied by the allotment and issue of new ordinary shares of S$0.01 each by the Company (the "Consideration Shares"). The purchase consideration shall be the aggregate net NTA of the Hiap Hoe Companies as at 31 March 2002 (the "Balance Sheet Date"), as determined by an independent firm of auditors agreed between the parties (the "Independent Auditors") on the basis that the relevant properties owned by the Hiap Hoe Companies are valued at their open market value (the "Hiap Hoe NAV"). The issue price for the Consideration Shares will be determined on the basis of the consolidated net asset value per share of CEH as at 31 March 2002 as determined by the Independent Auditors on the basis that the Scheme has been effected and that the real properties together with fixtures thereon, and all motor vehicles and machinery, owned by CEH, its subsidiaries and its associated companies will be valued at their open market values as at the Balance Sheet Date (the "CEH NAV"). It is also proposed to be a term of the Option Agreement that if the number of Consideration Shares to be issued to Hiap Hoe shall result in Hiap Hoe holding more than 75% of the enlarged capital of the Company, the value attributable to the Consideration Shares in excess of 75% will at the option of Hiap Hoe be satisfied in cash, which shall be payable from the cashflow of CEH. Interest on the cash consideration shall be charged on an arm's length basis. The Call Option and the Put Option may only be exercised by CEH and Hiap Hoe respectively in respect of all (but not some only) of the Acquisition Shares during the period commencing on the date that the last of the conditions precedent (as described below) is fulfilled or waived (as the case may be) and ending at 5.00 p.m. on the date 14 days thereafter (or such later date as the parties may agree in writing). Completion of the Acquisition shall take place on the 7th business day falling after (a) the exercise of the Call Option or the Put Option, as the case may be, or (b) if later, the determination of the Aggregate Hiap Hoe NAV and the CEH NAV by the Independent Auditors. If the conditions precedent are not fulfilled or waived by 30 June 2002, the Call Option and the Put Option shall lapse. It is also a term of the Supplemental MOU that in order to enable each party to decide on the entry into the Option Agreement and effecting of the Acquisition, each party shall be entitled to continue to conduct such due diligence, evaluation and investigations ("Due Diligence") as it may deem fit, into (a) in the case of CEH, the companies and the properties which are the subject of the Acquisition; and (b) in the case of Hiap Hoe, CEH, its subsidiaries and associated companies. The parties have agreed that the Due Diligence shall continue for such period as the parties shall reasonably deem fit, commencing on the date of the Supplemental MOU and ending on 30 December 2001 or such longer period as the parties may agree. The exercise of the Call Option and the Put Option are subject to certain conditions precedent (the "Conditions") being fulfilled, effected or waived, including, inter alia, the following: (a) the completion of the Capital Reduction; (b) the approval in-principle of the Singapore Exchange Securities Trading Limited ("SGX") being obtained for the Acquisition and for the listing and quotation of the Consideration Shares upon their issue and allotment and all conditions set out in such approval, including but not limited to any shareholding spread requirement or moratorium on the Consideration Shares, being complied with, where applicable; (c) the approval of CEH's shareholders in general meeting being obtained for the Acquisition and the allotment and issue of the Consideration Shares in favor of Hiap Hoe and/or its nominee(s); (d) the Scheme becoming effective, the terms of which Scheme, as presented to the Creditors and approved by the Court, being substantially and materially in accordance with the terms of the Scheme as described in the Supplemental MOU; (e) the receipt of the waiver from the Securities Industry Council to Hiap Hoe's obligation to make a mandatory offer to the shareholders of CEH under Rule 33 of the Singapore Code on Take-overs and Mergers (the "Code") arising from or in connection with the Acquisition, and the CEH's independent Shareholders' passing a resolution in favor of such waiver and where such waiver is granted subject to any conditions, that such conditions are acceptable to Hiap Hoe; and (f) no winding up order in respect of CEH or CEH Construction having been made by a court having jurisdiction. It is a term of the Supplemental MOU that CEH shall not be entitled to exercise the Call Option notwithstanding the conditions precedent have been fulfilled, if : (i) there is a real material risk that a majority in value of the secured creditors of the CEH Group would withdraw their support of the enlarged CEH Group after the Acquisition; or (ii) there is a real material risk that claimants on the CEH Group would succeed in their claims to an extent that would materially and adversely exceed its provisions in the audited accounts of CEH Group as at the Balance Sheet Date. Exclusivity The parties have agreed to extend the exclusivity granted to each other to 30 December 2001 or the execution of the Option Agreement, whichever is earlier. During the exclusivity period, each party will procure its directors, officers, employees and advisers: (a) will discontinue any negotiations or discussions already underway as of the date hereof; and (b) do not, directly or indirectly, solicit or initiate any negotiations or discussions or communicate any intention to do any of these things, with respect to any expression of interest, offer or proposal by any person other than the other party to acquire or become the holder of, or otherwise have an economic interest in all or any of (a) the Hiap Hoe Companies' shares or the Hiap Hoe Companies or the properties owned by the Hiap Hoe Companies, or any interest therein, on the one hand; and (b) the CEH Group or any shares of CEH or any material assets of CEH Group, on the other hand. Each party will have the exclusive right to negotiate with the other party the Acquisition and the terms of the Option Agreement and other ancillary documents during the exclusivity period. Support For Application To Appoint JM And For The Scheme Hiap Hoe has agreed that it will render all reasonable assistance to CEH in its applications for the appointment of the Judicial Manager and in relation to the Scheme (the "Applications"). In particular, Hiap Hoe has agreed to support the Applications by deposing to affidavits to be filed in relation to the Applications in which it will indicate its clear and serious intention to proceed with the Acquisition. Supplemental MOU Not Legally Binding The terms of the Supplemental MOU are not legally binding on the parties save for the provisions relating to, inter alia, exclusivity, confidentiality and Hiap Hoe's support for the Applications. In addition, although the directors of the Company fully expect to enter into a definitive call and put option agreement with Hiap Hoe on or about 30 December 2001, there is no absolute certainty that such an agreement would be achieved. Further, even after the option agreement is entered into, the put and call options under the option agreement may not be exercised until certain conditions precedent have been met. Very Substantial Acquisition Under Chapter 1008 of the Listing Manual Based on the unaudited financial statements of the CEH Group for the financial year ended 31 July 2001, the Acquisition will be deemed to be a "Very Substantial Acquisition" under Clause 1008 of the Listing Manual of the SGX. Pursuant to Clause 1008 of the Listing Manual, the Company will be required to obtain the approval of the SGX (unless such requirement is waived by the SGX) and its shareholders for the Acquisition. PROPOSED CONVERSION OF MR CHEW EU HOCK'S LOAN It is proposed that Mr Chew Eu Hock convert his entire loan to the Company amounting to approximately S$13.1 million to new CEH shares ("Chew Converted Shares") and to offer to transfer at nil consideration a certain portion of the Chew Converted Shares to the existing shareholders of CEH (other than associates of Mr Chew Eu Hock) and/or the Creditors on such basis as he may decide in consultation with Hiap Hoe and the Judicial Manager (as defined below). PROPOSED PETITION FOR JUDICIAL MANAGEMENT IN RESPECT OF CEH CONSTRUCTION In view of the current financial position of CEH Construction and to facilitate the implementation of the Scheme, the Directors propose that an application be made to the High Court of Singapore (the "Court") for an order (the "JM Order") for CEH Construction to be placed under judicial management and for the appointment of a judicial manager pursuant to section 227A of the Companies Act. The judicial management order is being sought for the purpose of effecting the Scheme (described below) and consequently facilitating completion of the Acquisition. It is proposed that Mr Tay Swee Sze of M/s Tay Swee Sze and Associates be appointed as the judicial manager for CEH Construction (the "Judicial Manager"). PROPOSED SCHEME OF ARRANGEMENT Subject to the JM Order being granted and the Capital Reduction being effected, it is proposed that the Scheme be implemented with the Creditors pursuant to section 210 of the Companies Act to restructure the debts owed by CEH Construction to the Creditors. Details of the Scheme The proposed Scheme is intended to restructure the debts of CEH Construction which is the main operating subsidiary of the Company. The other subsidiaries of the Company are not involved in the Scheme. Under the terms of the Scheme, the Company will assume and take over the liabilities of CEH Construction owed to the Creditors as at the date on which CEH Construction is placed under judicial management (the "Liabilities"). It is proposed that subject to the Capital Reduction being effected, in full settlement of the Liabilities, the Company will issue new ordinary shares of S$0.01 each to the creditors on such basis of conversion as the Judicial Manager may determine (the "Scheme Shares"). Further announcements setting out more details of the Scheme will be released by the Company when appropriate. Rationale for the Scheme CEH Construction's liabilities to the Creditors as at 31 July 2001 amounted to approximately S$31.7 million while under current market conditions, the CEH Group has not been able to raise additional funds from financial institutions or from the equity capital markets to meet these liabilities. Given the financial position of the CEH Group, the Directors believe that the proposed Scheme is in the interests of shareholders and the Creditors for the following reasons :- (i) the proposed Scheme will allow CEH Construction to continue performance of its existing contracts which would generate cash- flow as well as avoid any breach of non-performance clauses in such contracts; (ii) the proposed Scheme would allow the Creditors to realise a portion of their debts in the form of Scheme Shares. Upon suspension on the trading of the Company's shares being lifted, such Scheme Shares could be realized by the Creditors for cash. This is likely to be more than what the Creditors would receive in the event that CEH Construction is placed under liquidation; (iii) the successful implementation of the Scheme is an essential step for completion of the Acquisition which it is anticipated will enhance the financial position of the CEH Group and position it for future recovery. Approvals Required The following approvals, amongst others, will be required to effect the Scheme: (i) the approval of the Scheme by a majority in number representing not less than three-fourths in value of the creditors or classes of creditors present and voting at a meeting to be convened by order of the Court; (ii) the approval of shareholders of the Company for the issue of the Scheme Shares; (iii) the approval in-principle of the SGX for the listing of the Scheme Shares; and (iv) the sanction of the Court. An application will be filed with the Courts in due course to convene a meeting of the Creditors of CEH Construction in connection with proposed Scheme. In addition, in due course, application will be made to the SGX for the listing and quotation of the Scheme Shares and a circular to Shareholders will be issued to convene an extraordinary general meeting of the Company to seek their approval for, inter alia, the Acquisition and the issue of the Scheme Shares. Appropriate announcements will be released at the relevant time. PROPOSED CAPITAL REDUCTION Background and Rationale for the Capital Reduction As an essential step for both the Scheme and the Acquisition, the Board is proposing a capital reduction to be carried out by the Company to reduce the par value of each ordinary share in the Company from S$0.20 to S$0.01, subject inter alia, to the approval of shareholders of the Company and the Court. Under the Companies Act, a company cannot issue shares at a discount to its par value. However, at present, the Company's shares have a par value of S$0.20 each. This is significantly higher than both the current market price of the Company's shares as well as the NTA per share of the Company as at 31 July 2001. As both the Scheme and the Acquisition contemplate the issue of shares by the Company at a price substantially below the existing par value, the Capital Reduction is an essential step for both the Scheme and the Acquisition. Given the current market conditions and the CEH Group's present difficulties, the Company's shares will not trade at price above their par value. Accordingly, even if the Scheme is not implemented and/or the Acquisition not completed, a reduction in the par value of the Company's shares would still be required to allow the Company the flexibility to issue new shares at a price representative of the market price of its shares in the event of an alternative scheme being proposed or a fund raising exercise or transaction involving an issue of shares. Details of the Capital Reduction If approved, the Capital Reduction will be carried out pursuant to Section 73 of the Companies Act and the Company's issued and paid-up share capital will be reduced from S$27,159,443 divided into 135,797,215 ordinary shares of S$0.20 each to S$1,357,972.15 divided into 135,797,215 ordinary shares of S$0.01 each. The effect of the Capital Reduction will be as follows:- (a) canceling the paid-up share capital to the extent of S$0.19 on each of the 135,797,215 Shares which have been issued and are fully paid-up, or credited as fully paid-up; (b) reducing the nominal amount of all Shares, both issued and unissued, from S$0.20 to S$0.01 each; and (c) forthwith upon the Capital Reduction taking effect: (i) an amount equal to S$20,706,932 being part of the credit arising from the proposed Capital Reduction will be applied to write-off accumulated losses of the Company as at 31 July 2001 amounting to S$20,706,932; (ii) the balance of S$5,094,538.85 of the credit arising from the proposed Capital Reduction shall be credited to a reserve account (the "Reserve Account") of the Company in the accounting records of the Company. The Reserve Account shall be treated or used by the Company as a distributable reserve for dividend purposes, or for such purposes to the benefit of the Company as permitted under Singapore law and the Articles of Association of the Company; (iii) the Capital Reduction will have the effect of reducing the authorized capital of the Company from S$50,000,000 to S$2,500,000; and (iv) the authorized capital of the Company shall be increased to its former capital of S$50,000,000 by the creation of an additional 4,750,000,000 New Shares. There will be no change in the number of ordinary shares in the capital of the Company held by Shareholders immediately pursuant to and following the Capital Reduction. The Capital Reduction will not involve the diminution of any liability in respect of unpaid capital or the payment to any Shareholder of any paid-up capital of the Company. Financial Effects of the Capital Reduction The Capital Reduction has no impact on the number of issued shares, earnings per share, net tangible assets per share and gearing of the Company as at 31 July 2001 as the Capital Reduction is an accounting procedure that cancels the portion of the value of the issued and paid-up share capital which is transferred to the Contributed Surplus Account as described above. Approvals for the Capital Reduction The Capital Reduction is subject to, inter alia:- (a) the in-principle approval from the SGX; (b) a special resolution by the Shareholders at an extraordinary general meeting to be convened at a later date; and (c) the sanction of the Courts. The above approvals may be subject to conditions which may vary the terms of the Capital Reduction as set out herein. Application to the SGX for its approval and petition to the Courts for the order for the proposed Capital Reduction will be made in due course. SEMBCORP LOGISTICS: Posts Substantial Shareholding Changes ---------------------------------------------------------- Sembcorp Logistics Limited posted on Wednesday, a notice of changes in the deemed substantial shareholding of shareholder The Capital Group Companies. The notice appears below: Notice Of Changes In Deemed Substantial Shareholding Name of substantial shareholder: The Capital Group Companies, Inc. Date of notice to company: 31 Oct 2001 Date of change of deemed interest: 30 Oct 2001 Name of registered holder: DBS Nominees Pte Ltd Circumstance giving rise to the change: Open market purchase Shares held in the name of registered holder No. of shares of the change: 154,000 Percent of issued share capital: 0.02 Amount of consideration per share excluding brokerage, GST, stamp duties, clearing fee: S$1.5590 No. of shares held before change: 55,718,400 Percent of issued share capital: 6.55 No. of shares held after change: 55,872,400 Percent of issued share capital: 6.56 Holdings of Substantial Shareholder including direct and deemed interest Deemed Direct No. of shares held before change: 88,079,200 Percent of issued share capital: 10.35 No. of shares held after change: 88,233,200 Percent of issued share capital: 10.37 Total shares: 88,233,200 THAKRAL CORPORATION: Creditors Approve Scheme of Arrangement ------------------------------------------------------------ Thakral Corporation Ltd declared on October 31 that, in a court- convened meeting of the creditors of its principal subsidiary, Thakral Corporation Hong Kong Ltd (TCHK), the proposed Section 166 (1) Hong Kong Companies Ordinance (Chapter 32) scheme of arrangement was approved by a substantial majority (both in number and in value) of TCHK's creditors. =============== T H A I L A N D =============== SIAM CEMENT: Divesting Non-core Assets -------------------------------------- The Board of The Siam Cement Public Company Limited (SCC) approved the divestment of its foundry and machinery parts businesses, which are considered non-core. Details: 1) Sale of 51% stake in Siam NPR to Nipon Piston Ring (Japan), the other major shareholder of the company. This share transaction is valued at Bt163 million, and is expected to be completed by the end of December, 2001. 2) Sale of 40% stake in Nawaloha Foundry Company Limited to Aisin Takaoka Co. Ltd. of Japan, the other major shareholder of the company, valued at Bt62 million. This transaction will reduce Siam Cement's holding from 60% to 20% and is expected to be completed by the end of December, 2001. THAI PETROCHEMICAL: Rayong Power Plant Draws Bids ------------------------------------------------- Thai Petrochemical Industry Public Company Limited (TPI) has received two bids for the purchase of its Rayong power plant, The Asian Wall Street Journal reported Wednesday, citing Effective Planners Ltd., the company's debt plan administrator. Effective Planners Ltd., which manages TPI's US$3.7 billion debt restructuring plan, added the company will complete the evaluation of the proposals within a week, the signing of the sale expected to take place towards the end of November and the transaction should be completed by mid-December. The sale of the power plant is part of TPI's efforts to raise $200 million from the sale of non-core assets. TPI POLENE: Files Business Reorganization Petition -------------------------------------------------- TPI Polene Public Company Limited's (DEBTOR) Petition for Business Reorganization was filed in the Central Bankruptcy Court: Black Case Number 564/25543 Red Case Number 627/2543 Petitioner: TPI POLENE PUBLIC COMPANY LIMITED Debts Owed to the Petitioning Creditor: Bt53,307,448,883 Planner: TPI Polene Public Company Limited Date of Court Acceptance of the Petition: July 21, 2000 Date of Examining the Petition: August 21, 2000 at 9.00 A.M. Court Order for Business Reorganization and Appointment of Planner: August 21, 2000 Announcement of Court Order for Business Reorganization and Appointment of the Planner in Matichon Public Company Limited and Siam Rath Company Limited: August 25, 2000 Announcement of Court Order for Business Reorganization and Appointment of the Planner in Government Gazette: September 14, 2000 Deadline for Planner to submit the Business Reorganization Plan to Official Receiver: December 14, 2000 Appointment Date of the Creditors' meeting for the Plan Consideration: February 1, 2001 at 9.00 am. Convention Room, 9th Floor Legal Execution Department, Bangkunnont Rd. The Creditors' meeting has a special resolution accepting the plan Court hearing has been set on February 9, 2001 at 13.30 pm. Court Order for Accepting the reorganization plan: February 9, 2001 and appointed TPI Polene Public Company Limited to be the Plan Administrator Announcement of Court Order for Accepting the Reorganization Plan in Matichon Public Company Limited and Siam Rath Company Limited: February 16, 2001 Announcement of Court Order for Accepting the Reorganization Plan in Government Gazette: March 20, 2001 Contact: Mr. Chat Tel, 6792525 ext 124 * Central Bankruptcy Court Winds Up Three Finance Firms ------------------------------------------------------- The Central Bankruptcy Court declared three suspended companies under the supervision of the Financial Sector Restructuring Authority (FRA), namely Thai Finance and Securities Plc., Chao Phaya Finance and Securities Co., Ltd. and CL Sahaviriya Finance and Securities Co., Ltd., bankrupt and put them under absolute receivership upon the request filed by the liquidator of each company. Mr.Kamol Juntima, the FRA's Chairman, said that these three companies have already distributed the proceeds from asset sales amounting to Bt6,973.42 million to their eligible creditors who had filed their claims with the FRA. Of this amount, Bt6,879.29 million or 98.65% were paid to the Financial Institutions Development Fund (FIDF). "The remaining assets of these three companies will be handled by the Official Receiver of the Legal Execution Department and all of the creditors have to file claims with the Official Receiver for their outstanding debts within 2 months after the receiving orders are publicized," said Mr.Kamol . Mr.Kamol said that, as of October 16,2001, the FRA has already brought 34 of 56 suspended companies under its supervision into the bankruptcy process. Of 22 others, ten have already distributed payments to their creditors with eight more to complete their distribution processes by the end of this year. The last group of four companies with more complicated calculations will be repaying their debts early next year. Thai Finance and Securities Plc. was ordered to suspend operations by the Ministry of Finance on August 5, 1997. As of July 31,2001 the company has Bt2,626.93 million of remaining assets and Bt6,593.07 million of outstanding debts. During July 16,2001 - August 15,2001, the company's creditors have been repaid amounting to Bt1,572.26 million, of which Bt1,556.17 million was paid to the FIDF. Chao Phaya Finance and Securities Co., Ltd. was ordered to suspend operations by the Ministry of Finance on August 5, 1997. As of August 31, 2001, the company has Bt7,075.55 million of remaining assets (most of them are under the litigation and foreclosure process) and Bt15,650.58 million of outstanding debts. During July 16,2001 - August 15,2001 , the company's creditors have been repaid amounting to Bt4,034.26 million, of which Bt3,981.66 million was paid to the FIDF. CL Sahaviriya Finance and Securities Co., Ltd. was ordered to suspend operations by the Ministry of Finance on June 26, 1997. As of July 31,2001, the company has Bt1,165.37 million of remaining assets and Bt4,747.00 million of outstanding debts. During July 16,2001 - August 15,2001, the company's creditors have been repaid amounting to Bt1,366.90 million, of which Bt1,341.46 million was paid to the FIDF. 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. Lyndsey Resnick, Maria Vyrna Nineza, Jerros Dolino, 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 240/629-3300. *** End of Transmission ***