/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/030425.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, April 25, 2003, Vol. 6, No. 81 Headlines A U S T R A L I A AQUILA INC.: To Sell Stakes in Aussie Ventures for US$445M GOODMAN FIELDER: New Owner to Close Two West Australian Bakeries KING BROS: Creditor Bank Earmarks AU$46 Million as Provision ONESTEEL LIMITED: Expects Multi-million Savings in HWE Contract C H I N A & H O N G K O N G HANG SHUN: Proofs of Claim Must be in May 3, Says Receiver IXNET HONG: Creditors, Contributories Meeting Set May 7 PRESSURE VESSELS: Court Sets Hearing on Creditors Resolutions ROSEDALE HOTEL: Limits Losses, But Overall '02 Results in Red SOUTH CHINA: Broker Trims Staff Pay by Another 30% TAN KIN: Creditors' General Meeting Scheduled for May 13 TSANG HING: Receiver to Host General Meeting of Creditors Monday WAH HIP: Liquidator to Meet Creditors, Contributories May 6 I N D O N E S I A ASIA PULP: Just One Issue Blocking US$6.6 Billion Debt Plan BANK DANAMON: Bank Mega Now Backed by Credit Suisse First Boston SEMEN GRESIK: Government's Spin-off Plan Illegal, Says Lawyer SINAR MAS: Fire Razes Cooking Oil Factory J A P A N AKITA KUKO: Golf Course Enters Rehabilitation ALL NIPPON: Passengers Drop 30% in April HINO MOTORS: Dissolves Thai Subsidiary MATSUSHITA ELECTRIC: Strengthens Global Brand Strategy MATSUSHITA ELECTRIC: Stops Chinese Production Line on SARS Scare NAGANO CONSTRUCTION: Construction Firm Enters Rehab Proceedings SEGA CORPORATION: Board Gives Go-ahead For Merger Talks YAJIMA K.K.: Furniture Firm Enters Rehab Proceedings K O R E A CHOHUNG BANK: Shinhan Likely to Give Higher Value HYNIX SEMICONDUCTOR: Signs Alliance With STMicro HYNIX SEMICONDUCTOR: Faces 33% EU Duty SK GLOBAL: Creditor Unlikely to Provide New Loans to Affiliates SK GLOBAL: May Close Foreign Branches M A L A Y S I A COUNTRY HEIGHTS: Disposes of Subsidiary DMIB BERHAD: Stockholder's OK Reorganization Scheme KSU HOLDINGS: Postpones Winding Up of Unit SENG HUP: Unit Enters Voluntary Winding Up SITT TATT: Extraordinary General Meeting Results SUNWAY CITY: Acceptance of Loan Facility P H I L I P P I N E S MANILA ELECTRIC: Nasecore Wants Meralco Under Receivership PHILIPPINE AIRLINES: Airline Sues Union For P1.0B PHILIPPINE LONG: Cuts Leased Line Rates For ISP's VICTORIAS MILLING: Moving to Full Rehabilitation S I N G A P O R E CHARTERED SEMICON: May Sign Up With Philips, Kelive DATACRAFT ASIA: Issues Additional Info on Disposal of Opsis FLEXTECH HOLDINGS: Increases Investment in Subsidiary SEATOWN CORPORATION: Creditors Vote Against Scheme T H A I L A N D BT SECURITIES: Willing to Sell BankThai Shares at Paltry Price - - - - - - - - ================= A U S T R A L I A ================= AQUILA INC.: To Sell Stakes in Aussie Ventures for US$445M ---------------------------------------------------------- Troubled U.S. energy Company, Aquila Inc., on Wednesday struck a deal with AlintaGas and AMP Henderson that will allow it to exit from the Australian market, Dow Jones Newswire said yesterday. The American firm is expected to net US$445 million from the transaction, while its Australian partners would end up managing around AU$4 billion worth of domestic energy assets, the newswire said. "The ultimate sale of our Australian properties will be another significant step in our plan to enhance our balance sheet and return our focus to operating highly efficient electric and natural gas utilities in North America," Aquila CEO Keith Stamm explained the move. According to the newswire, AlintaGas, in partnership with AMP Henderson, will acquire and cancel Aquila's 22.5 percent indirect holding in AlintaGas. They will also bid AU$3.15 a share in cash for the 43 percent public stake in United Energy Ltd (UEL). The remainder of UEL is owned by a partnership consisting of Aquila and AMP that, like the 45 percent cornerstone shareholding in Alinta, will be dismantled and the assets reallocated, the report said. The deal will see Alinta emerge with 34 percent of the distribution assets of United Energy, 100 percent of the non- distribution assets of United, and 19.9 percent of the Multinet Gas Distribution Partnership. In each instance, AMP Henderson will own the remaining stakes, the newswire said. Alinta will also sell 25 percent of its WA AlintaGas Networks business into a diversified energy fund run by AMP Henderson. The financial services Company will launch its AU$800 million AMP Henderson Utilities Fund once the Aquila transactions are completed, the newswire added. Alinta CEO Bob Browning predicts his Company will enjoy pre-tax earnings of AU$15 million per year from long-term management contracts over the three network assets in Western Australia and Victoria. He expects to close the deal in mid-to-late July, although there are some integration risks to overcome. "Obviously it is a very complex deal. There are a lot of people and assets involved, so there are risks around due diligence and all of the possible permutations that could unfold as we execute on this transaction," he told Dow Jones in an interview. "[But] we feel comfortable we've got our arms around the assets and we know what were buying into," he said. GOODMAN FIELDER: New Owner to Close Two West Australian Bakeries ---------------------------------------------------------------- Two Goodman Fielder bakeries in the West Australian region will be shut down next month by Burns Philp, a month after acquiring the Company via a hostile AU$1.9 billion bid. According to the West Australian, the decision was made following an evaluation of Goodman's operations. Burns Philp did not say how much savings it will derive from the closure, but analysts estimate it to be around AU$50 million a year. The paper says beginning May 16, bread for sale in Geraldton and Kalgoorlie will be transported more than 400km from Goodman's Malaga bakery. The affected units are located in Broken Hill in NSW and Mount Gambier in South Australia. The two employ 20 staff. Burns Philip Managing Director Tom Degnan says the decision to close the bakeries was made because both were running at "very low levels of production" and were losing money. "Th[is] is the first step in a program which will bring Goodman Fielder's baking operations in line with the competition," he told the West Australian in an interview early this week. Mr. Degnan said Goodman was operating at higher costs to its major rival, which made it difficult to compete when contracts came up for tender. "If we don't address this the whole business will be in trouble," he said. Mr. Degnan says further consolidation of the West Australian operations is likely, but clarified that Burns Philp would not completely pull out of its bakery operations in the region. A representative of the Liquor, Hospitality and Miscellaneous Workers Union told the paper Burns Philp had agreed to pay redundant workers four weeks per year of service, as set out under the Enterprise Bargaining Agreement. KING BROS: Creditor Bank Earmarks AU$46 Million as Provision ------------------------------------------------------------ King Bros Bus Group lender, National Australia Bank, has taken an interim charge of AU$46 million, following the demise of the bus operator. Shaw Online says the bank is owed about AU$132 million in the form of lease and loans to companies associated with King Bros. The bank is now working closely the receiver/managers and other creditors to clarify and resolve outstanding issues. "The provision does not alter expectations for the group's half year profit," the bank said. "We believe it was appropriate, based on information provided by the receiver/managers, to take an early provision of AU$46 million which will be reflected in the accounts as at March 31." ONESTEEL LIMITED: Expects Multi-million Savings in HWE Contract --------------------------------------------------------------- OneSteel Limited announces that it has entered into a new deal with Henry Walker Eltin that will help it save millions of dollars by converting low-grade ore into feed for its Whyalla blast furnace. Under the deal, The Age says the contractor will build an ore beneficiation plant that will convert the low-grade ore into feed. OneSteel has about nine million tonnes of low-grade ore accumulated at its three South Australian mines in the South Middleback Ranges. As much as five million tonnes of feed can be made out of this, the paper says. OneSteel Managing Director Bob Every said use of lower-grade ore would reduce the annual mining task from three million to two million tonnes for the five-year contract, with a sixth-year option. HWE also will continue to handle the drilling, blasting and mining of hematite ore at the Iron Duke, Iron Duchess and Iron Knight mines. "The contract brings in AU$2 million in savings through synergies with HWE that will be generated over the six-year period," Mr. Every told The Age. ============================= C H I N A & H O N G K O N G ============================= HANG SHUN: Proofs of Claim Must be in May 3, Says Receiver ---------------------------------------------------------- Creditors of Hang Shun Hing Yip (Group) Company Limited have until May 3, 2003 to show their proofs of claim, says official receiver and liquidator ET O'Connell. They must send their proofs on or before the said date to his office on the 10th floor, Queensway Government Offices, 66 Queensway, Hong Kong. IXNET HONG: Creditors, Contributories Meeting Set May 7 ------------------------------------------------------- Creditors and contributories of Ixnet Hong Kong Limited will meet on May 7, 2003 at 10:30 a.m. and 11:30 a.m., respectively. Official Receiver and Provisional Liquidator ET O'Connell will host both meetings at his office on the 10th Floor, Queensway Government Offices, 66 Queensway, Hong Kong. PRESSURE VESSELS: Court Sets Hearing on Creditors Resolutions ------------------------------------------------------------- The High Court of Hong Kong will consider on May 19, 2003 the resolutions passed by the creditors and contributories of Pressure Vessels Manufacturing Company Limited during their separate meetings on January 3 and 13, respectively. Presiding over the deliberation at 10:00 in the morning will be Master S. Kwang. Creditors and other interested parties are encouraged to attend the hearing. They only need to notify the registrar of the high court and the official receivers office not less than two days before the hearing date. The High Court is located at 38 Queensway, Hong Kong. The official receiver holds office on the 10th floor, Queensway Government Offices, 66 Queensway, Hong Kong. ROSEDALE HOTEL: Limits Losses, But Overall '02 Results in Red ------------------------------------------------------------- Rosedale Hotel reported Wednesday better results for the year to December 2002, but figures were still in red, The Standard reported yesterday. Net loss came at only HK$99.81 million, a huge improvement from the HK$393.71 million loss posted a year earlier. The Company said turnover rose to HK$181.69 million from HK$114.95 million in 2001, while revenue surged on the back of an additional HK$66.42 million generated from a toll highway. Hotel operations and sales of properties generated HK$56.64 million and HK$51.23 million respectively. Overall, operating loss dropped to HK$92.23 million from HK$551.95 million, the paper said. The Company says hotel operating loss contributed HK$7.42 million to the overall results, but the figure is a sharp drop from HK$119.97 million a year earlier. The toll highway operations also saw an improvement, from an operating loss of HK$360.27 million in 2001 to HK$45.97 million last year. The Company says impairment and revaluation losses for its toll highway, investment properties and properties held for sale amounted to HK$80.72 million for the year ended December. Impairment losses were HK$508.38 million in 2001. Share of loss of associates, meanwhile, narrowed to HK$151,000 down from HK$1.5 million. SOUTH CHINA: Broker Trims Staff Pay by Another 30% -------------------------------------------------- For the fourth time in two years, South China Brokerage shaved another 30 percent off its management staff's pay and about 5- 10% of that of frontline employees to stay afloat, The Standard said yesterday. According to the paper, the pay cut is aimed at reducing operating costs and is antedated to the beginning of this month. More than 90% of the staff have already accepted the pay cut, apparently for lack of any choice. Those who do not accept the cut face dismissal, although they will be paid according to labor regulations. Industry players said they were not surprised that brokerages had cut salaries or axed staff to trim costs. "The market sentiment is very sluggish. Turnover is not sufficient to support the whole industry," President Securities managing Director Victor Ma told The Standard in an interview. In October last year, South China Brokerage, one of the biggest local houses with seven branches, axed dozens of employees and slashed pay by 5-20%. This followed a 20 percent pay cut after the September 11, 2001 terror attacks in the United States and the scrapping of the year-end bonus that year. The brokerage had said earlier that it would not renew some rental contracts when they expired in order to trim operating costs, the paper said. The brokerage made a net profit of HK$19.97 million in 2001. TAN KIN: Creditors' General Meeting Scheduled for May 13 -------------------------------------------------------- ET O'Connell, the official receiver of Tan Kin George, announces that there will be a general meeting of creditors on May 13, 2003 at 10:00 in the morning. The meeting will be held at the office of the receiver on the 10th floor, Queensway Government Offices, 66 Queensway, Hong Kong. TSANG HING: Receiver to Host General Meeting of Creditors Monday ---------------------------------------------------------------- ET O'Connell, the official receiver of Tsang Hing Wing, has scheduled a general meeting of creditors on April 28, 2003 at 10:00 in the morning. The meeting will take place on the 10th Floor, Queensway Government Offices, 66 Queensway, Hong Kong. WAH HIP: Liquidator to Meet Creditors, Contributories May 6 ----------------------------------------------------------- ET O'Connell, the official receiver and provisional liquidator of Wah Hip (E&M) Engineering Co. Limited, will host the meeting of creditors on May 6, 2003 at 2:30 in the afternoon. After which, he will also meet with contributories on the same day at 3:30 p.m. Both meetings will be held at his office on the 10th floor, Queensway Government Offices, 66 Queensway, Hong Kong. ================= I N D O N E S I A ================= ASIA PULP: Just One Issue Blocking US$6.6 Billion Debt Plan ----------------------------------------------------------- Finally, after months of negotiations, the US$6.6 billion debt restructuring of Asia Pulp & Paper is nearing conclusion, although one more sticking point could further delay its approval. According to Syafruddin Temenggung, Chairman of Indonesia's Bank Restructuring Agency and APP's largest creditor, the government and some foreign lenders are still deadlock over the vote needed to carry out any steps in case of a second loan default. The government wants 75%, while the foreign creditors want only 25%, he told Reuters. Earlier this month, IBRA said it had reached a preliminary agreement with 11 credit export agencies over some key issues, including the creation of an oversight committee aimed at controlling the cash flow at APP's four Indonesian units: PT Indah Kiat Pulp & Paper, PT Tjiwi Kimia , PT Lontar Papyrus Pulp & Paper and PT Pindo Deli Pulp & Paper Mills. They also agreed that in the case of a second loan default, creditors would vote on whether they wanted to have another restructuring, convert the debt to equity, execute the collateral or file for bankruptcy. Originally scheduled for approval by end of March, creditors agreed to move the vote to next week. Asked if the vote issue could jeopardize the April-end target, Mr. Temenggung said: "That's why we will push again (and meet again) on Wednesday to settle this one problem." APP is considered the largest pulp and paper producer in Asia outside Japan. It declared a debt moratorium in early 2001 after experiencing a cash crunch, largely caused by its aggressive expansion in the 1990s. BANK DANAMON: Bank Mega Now Backed by Credit Suisse First Boston ---------------------------------------------------------------- Credit Suisse First Boston has joined a consortium led by Bank Mega in bidding for the government's stake in Bank Danamon, a centerpiece of the country's economic reform program. Business Times says the U.S. bank and its local partner will now be pitting against two other groups short-listed by Indonesia's Bank Restructuring Agency last month. The two are: Asia Financial Indonesia, composed of Singapore's government investment arm, Temasek Holdings, and Germany's Deutsche Bank; and a group led by Bank Artha Graha. The sale is estimated to fetch about IDR3.5 trillion or around 10 percent of the IDR34 trillion target of Indonesia's asset sale program this year. IBRA hopes to conclude the sale by end of May despite extending the deadline for the final bids to April 28. The country's fifth-largest bank, Bank Danamon recently reported first-quarter net profit of IDR270 billion, up from IDR194 billion in the same period last year. The bank also posted a net interest income of IDR500 billion in the first quarter of 2003 against IDR400 billion a year ago. "Higher lending to small-scale businessmen and retail customers boosted our profit," Danamon's President Arwin Rasyid said at a press conference recently. SEMEN GRESIK: Government's Spin-off Plan Illegal, Says Lawyer ------------------------------------------------------------- A PT Semen Gresik (SG) lawyer warned early this week that the plan by the government to unilaterally spin-off two subsidiaries could result in protracted legal tussles. Todung Mulya Lubis, in an interview with The Jakarta Post, said the plan to detach Semen Padang and Semen Tonasa from SG could open the Company to allegations that it overpriced its shares when it went public. "When Cemex, and the public, bought SG shares, they paid their money based on the assumption that SG's total output was around 17.25 million metric tons. But if the two subsidiaries are hived off, this would mean that the shares were overpriced as the Company's production capacity will be much lower," he told the Post. Semen Padang and Semen Tonasa have a combined production capacity of around 9 million metric tons. The two are 99.9%- owned by SG, which is in turn 51%-owned by the government, 23.46% by the investing public, and the rest by Mexico's Cemex SA de CV. They operate in the provinces of West Sumatra and South Sulawesi, respectively. Rumors are rife that State Minister for State Enterprises Laksamana Sukardi had recently sent a letter to the governor of West Sumatra approving the demand for a spin-off as long as it did not violate the law. Accordingly, influential individuals, including local politicians and employees of the two units, have been lobbying for the spin-off. There are speculations that Mr. Laksamana's letter was aimed at cooling down the tensions in the region. Semen Padang, in particular, gained notoriety two years ago when it fiercely opposed and subsequently forced the government to cancel a plan to sell its 51 percent stake in the Padang operation to Cemex. Mr. Todung says the spin-off would also be detrimental to the government's privatization program: "This (spin-off approval) would create a bad precedent, and other state-owned firms that have been privatized might ask for similar treatment." In addition, he says, the government's unilateral decision also violates prevailing legislation governing limited liability companies and the capital market. Under these provisions, minority shareholders are given a say in any major corporate actions undertaken by publicly listed companies. "So, the government [cannot] completely do as it likes as the majority shareholder in this case," Mr. Todung said. Sources say SG's management has yet to receive a copy of Mr. Laksamana's letter. Already, the government plans to call for an extraordinary meeting in the middle of next month to put the plan to a vote. SG is currently the country's largest cement manufacturer with a total capacity of around 17.25 million metric tons. SINAR MAS: Fire Razes Cooking Oil Factory ----------------------------------------- The Jakarta Stock Exchange halted Wednesday the trading of a Sinar Mas subsidiary after a fire gutted its factory earlier that day, local daily The Jakarta Post said. Shares of PT Sinar Mas Agro Resources (SMART) were suspended at Rp1,225. Located in Surabaya, East Java, the factory produces Filma cooking oil. SMART is one of the lucrative subsidiaries of the troubled Sinar Mas Group, the paper says. It also produces Kunci Mas cooking oil, a leading brand with 30 percent market share. The paper did not say when the suspension would be lifted. Neither did it state the amount of damage the fire caused. ========= J A P A N ========= AKITA KUKO: Golf Course Enters Rehabilitation --------------------------------------------- Akita Kuko Golf Club, K.K., which has total liabilities of 5.45 billion yen against a capital of 1.7 billion yen, recently applied for civil rehabilitation proceedings, according to Tokyo Shoko Research. The golf course is located in Senhoku-gun, Akita, Japan. ALL NIPPON: Passengers Drop 30% in April ---------------------------------------- The number of passengers on All Nippon Airways (ANA) flights this month is likely to be down 30 percent from a year earlier, due to the outbreak of severe acute respiratory syndrome (SARS), Kyodo News said on Thursday, citing ANA President Yoji Ohashi. In March, the number of passengers fall 7 percent, while flights bound to Europe and North America dropped about 20 percent because of the war in Iraq. HINO MOTORS: Dissolves Thai Subsidiary -------------------------------------- Hino Motors, Ltd. has decided to dissolve its subsidiary, Thai Hino Motor Corporation, Ltd. (THMC), as described below. 1. Name and facts about the subsidiary to be dissolved Trade Name: Thai Hino Motor Corporation, Ltd. Incorporation: July 1964 Capital: 300 million bahts (JPY 840 million*) *Note: 1 baht= JPY2.8 Issued shares: 300,000 shares Total assets: 294 million bahts (JPY 823 million*) Number of employees: 0 Major clients: THMC holds no clients, as it is a holding Company and is not engaged in any business activities. Shareholder composition: HINO 35 percent, MITSUI & CO., LTD. 35 percent, Hino Motors (Thailand) Ltd. 30 percent (Hino Motors (Thailand) Ltd. is a subsidiary of HINO) Business performance (Fiscal Net sales: 0 million bath year ended March 31, 2003): Ordinary loss: 2 million bahts (JPY 6 million*) 2. Schedule for dissolution Scheduled to be dissolved during 2003. 3. Reason for dissolution Reorganizing the shareholding structure and to improve the business efficiency. 4. Anticipated effects on the business performance The anticipated effects of the dissolution on each of HINO's and TOYOTA's net incomes for the term will be very minor. MATSUSHITA ELECTRIC: Strengthens Global Brand Strategy ------------------------------------------------------ Matsushita Electric Industrial Co., Ltd., known for its Panasonic and National brand names, announced that the Company would position Panasonic as its main global brand in order to strengthen brand competitiveness worldwide. A new global brand campaign will be launched with a new brand slogan 'Panasonic ideas for life' that reflects the customer- focused strategy behind the development of Panasonic products. The slogan will be incorporated in all of the Company's corporate communications and advertising messages worldwide. The change in brand strategy comes from the Company's strong needs to consolidate its brand communications efforts under the 'Panasonic' brand which covers over 90 percent of sales outside Japan. The brand slogan, 'Panasonic ideas for life', represents the commitment of all the employees, from R&D and manufacturing to marketing and services, to supply products and services based on valuable ideas that can enrich people's lives and advance the society. Matsushita Electric adopted the brand name 'National' in Japan in 1927 at the initiative of the founder, Konosuke Matsushita. The 'National' brand name became a very popular household name in Japan and was also increasingly used in overseas markets. The Panasonic brand was first introduced in 1961 in the U.S. where the 'National' brand name had been registered by others and therefore, could not be used. Building on the successful brand recognition of Panasonic in the U.S., the Company started using the Panasonic brand name in Europe in 1979 and in other regions in the late 80's for products other than home appliances for which 'National' brand name continued to be used. Under the new global brand strategy, the brand name for all home appliance products in Southeast Asia, the Middle East and China will be changed to 'Panasonic' from 'National' by the end of March 2004. The 'National' brand will, however, continue to be used in Japan where the brand was originally born. About Matsushita Electric Industrial Co., Ltd. Matsushita Electric Industrial Co., Ltd., best known for its Panasonic, National, Technics, and Quasar brand names, is a worldwide leader in the development and manufacture of electronics products for a wide range of consumer, business, and industrial needs. Based in Osaka, Japan, the Company recorded consolidated sales of US$51.7 billion for the fiscal year ended March 31, 2002. Matsushita's shares are listed on the Tokyo, Osaka, Nagoya, Fukuoka, Sapporo, New York (NYSE: MC), Pacific, Euronext Amsterdam, Euronext Paris, Frankfurt and Dusseldorf stock exchanges. For more information, please visit Matsushita web site at http://www.panasonic.co.jp/global/top.html CONTACT: Media, Akira Kadota or Wilson Solano, International PR, Tokyo, + 03-3578-1237, or fax, +03-5472-7608; William Pritchard or Kalia Farrell, both of Panasonic PR, Secaucus, +1-201-348- 7182 or +1-201-392-6159/ MATSUSHITA ELECTRIC: Stops Chinese Production Line on SARS Scare ---------------------------------------------------------------- Matsushita Electric has suspended one production line in Beijing, China for one day as a precautionary measure against the severe acute respiratory syndrome (SARS) scare, AFP Online reports, citing Matsushita spokesman Yoshihiro Matsukawa. The Company made the decision after a worker's husband, a tax driver, took a patient with Severe Acute Respiratory Syndrome to hospital. The electronics firm expects a group net loss of 23.5 billion yen for 2002 ending in March 31, the Troubled Company Reporter- Asia Pacific reported recently. The Company blamed the forecast on a write-down of 37 billion yen to reflect the declining value of its shareholdings. NAGANO CONSTRUCTION: Construction Firm Enters Rehab Proceedings --------------------------------------------------------------- Nagano Construction Co. Ltd., which has total liabilities of 8 billion yen against a capital of 315 million yen, recently applied for civil rehabilitation proceedings, according to Tokyo Shoko Research. The construction and civil engineering firm is located in Nagano-shi, Nagano, Japan. SEGA CORPORATION: Board Gives Go-ahead For Merger Talks ------------------------------------------------------- Sega Corporation said its board members gave it the go-ahead to "officially" consider merger deals proposed by pinball machine maker Sammy Corp and Namco Ltd., Reuters said on Wednesday. The Company will make a final on the proposals by the middle of May so that a deal could be approved by a shareholders meeting scheduled for late June. Sega returned to profitability for the first time in five in years, with an operating profit of 14.2 billion yen ($112 million) last year, compared with an operating loss of 51.7 billion yen previously, the Troubled Company Reporter-Asia Pacific reports. The Tokyo-based maker of viao game software has been cutting costs and strengthening its balance sheet through disposals of assets, including offices and stock holdings. YAJIMA K.K.: Furniture Firm Enters Rehab Proceedings ---------------------------------------------------- Yajima, K.K., which has total liabilities of 10 billion yen against capital of 84 million yen, recently applied for civil rehabilitation proceedings, according to Tokyo Shoko Research. The furniture firm is located in Koganei-shi, Tokyo, Japan. ========= K O R E A ========= CHOHUNG BANK: Shinhan Likely to Give Higher Value ------------------------------------------------- Shinhan Accounting Corporation, which is conducting due diligence on Chohung Bank, may give a higher price for the bank's shares compared with an earlier valuation by Morgan Stanley, an official at the state-run Korea Deposite Insurance Corp. (KDIC), the Korea Herald reported Thursday. The accounting firm may report next week that Chohung's assets are as much as 7,000 won a share, higher than Morgan Stanley's valuation of 4,000-6,400 won a share. Negotiations to sell the Korean government's entire 80.04 percent stake in the bank to Shinhan Financial Group will depend on the result of the due diligence, which is taking longer than expected. This is because Shinhan Accounting has to consider the impact of accounting irregularities at SK Global Co. on Chohung Bank's bottom line. The bank's exposure to the SK Global is worth about 430 billion won or about 1 percent of its total lending, for which Shinhan Accounting applied a 50 percent loan loss-provisioning ratio. HYNIX SEMICONDUCTOR: Signs Alliance With STMicro ------------------------------------------------ Hynix Semiconductor Inc. has announced an important agreement with STMicroelectronics N.V. (ST), one of the world's largest semiconductor companies, to cooperate in the development of NAND flash memories, a Company statement said. The two companies agreed to jointly develop state-of-the-art NAND flash memory technology and products, and establish a long- term supply for these advanced memory products. For Hynix, this cooperation signifies that its memory technology and low-cost manufacturing expertise have been recognized by one of the world's leading semiconductor companies. Both companies will complement and leverage each other's strengths, including the leading-edge DRAM technology and low- cost production capability of Hynix, and the broad system application capability and customer base of ST, in order to most effectively address the ever-growing market demand for NAND flash memory products. Jointly developed products will be ready for mass production sometime in the second half of this year. The two companies expect that this collaboration will further strengthen their competitive offerings in the memory market. The NAND flash is a non-volatile memory product for high-density data storage applications, such as mobile phones, digital cameras, and MP3 players. Dataquest estimates that the NAND flash market will reach $2.2 billion level this year and $3.2 billion level by 2005. STMicroelectronics is a global leader in developing and delivering semiconductor solutions across the spectrum of microelectronics applications, thanks to its combination of silicon and system expertise, manufacturing strength, Intellectual Property (IP) portfolio and strategic partners. HYNIX SEMICONDUCTOR: Faces 33% EU Duty -------------------------------------- The European Commission is expected to announce a duty of 33 percent on Hynix Semiconductor Inc., Reuters said on Thursday, citing an unnamed European Union (EU) official. The commission alleges Hynix received illegal state aid and the move follows a World Trade Organization (WTO) case brought by the Commission against South Korea for alleged aid to shipbuilders. The duty will be provisional and need confirmation from a majority of EU states within four months. SK GLOBAL: Creditor Unlikely to Provide New Loans to Affiliates --------------------------------------------------------------- Kookmin Bank (KB), a major SK Global creditor, is unlikely to provide new loans to SK Group affiliates until the group's accounting practices ease, Dow Jones reports. Kookmin Bank hasn't provided new loans to SK Group affiliates since prosecutors discovered accounting irregularities at SK Global. SK GLOBAL: May Close Foreign Branches ------------------------------------- SK Global may liquidate its overseas operations in order to keep its head office from taking losses from the operations, Digital Chosun reported Wednesday. The Company's overseas branches suffered estimated losses of 4 trillion won. When the overseas operations are sold off, SK Global will continue with it's restructuring, focusing on its domestic service stations and mobile handset-marketing operations. Creditors estimated SK Global's total debts at 8.6 trillion won, which covers 6.2 trillion won in domestic debts, and the head office-guaranteed 2.4 trillion won out of a total 3.4 trillion won losses at the firm's overseas operations. =============== M A L A Y S I A =============== COUNTRY HEIGHTS: Disposes of Subsidiary --------------------------------------- The Board of Directors of Country Heights Holdings Berhad (CHHB) announced that a subsidiary of CHHB, Country Heights Education Sdn Bhd (CH Education) has on 22 April 2003 entered into a Sale and Purchase Agreement S&P Agreement to dispose of its entire investment in Country Heights Brickfields College Sdn Bhd CH Brickfields College the Disposal for a total consideration of RM3,000,000. 2. Details of the Disposal 2.1 Details of the Investment The entire investment consists of 700,000 ordinary shares of RM1 each representing 70 percent of the equity capital of CH Brickfields College. CH Brickfields College's principal business was the provision of education services but it ceased business in the year 2001. 2.2 Basis of Consideration The consideration of RM3,000,000 is arrived at on a willing buyer, willing seller basis. 2.3 The Purchaser The Purchaser is Mr Raja Singham A/L Sukumara Singham, an existing director and existing shareholder of CH Brickfields College, holding 12 percent of the equity capital. 2.4 The Original Cost of Investment The original cost of the investment was RM10,000,000 incurred by CH Education in 1996. Since then the cost of investment has been written down to RM0. Accordingly, CH Education is expected to make a profit of RM3,000,000 on the disposal. The CHHB Group will realize a profit of RM4,006,740 after taking into account, losses incurred by CH Brickfields College, which have been consolidated in the group results up to 31 December 2002. 3. Salient Terms of the S&P Agreement The salient terms of the S&P Agreement are as follows: A sum of RM230,000 has been paid by the Purchaser prior to the execution of the S&P Agreement and a further sum of RM300,000 paid by the Purchaser to CH Brickfields College whereby CH Education will be entitled to use the credit as scholarships worth up to RM300,000 to be awarded to qualified students selected by CH Education. The balance consideration of RM2,470,00 is to be paid in 38 equal installments after an initial one-year grace period. The balance consideration attracts interest at the rate of 5 percent per annum calculated on a monthly basis. The Disposal is deemed completed on the date of execution of the S&P Agreement and the balance consideration is treated as a debt due from the Purchaser. 4. Shareholders' approval The Disposal is not subject to the approval of the shareholders of the CHHB. 5. Proposed Utilization of Proceeds The proceeds of disposal will be utilized by CHHB for working capital. 6. Rationale for the Disposal The CHHB Group's core business is property development and investment in tourism properties. Since CH Brickfields College has incurred losses and ceased business and therefore could not contribute to the revenue and earnings of the group, the Board of Directors is of the view that the Disposal is in the best interest of CHHB. 7. Financial effects of the Disposal The Disposal has no material effects on the earnings per share, net tangible assets per shares, share capital and substantial shareholders' shareholdings of CHHB. After the Disposal, CH Brickfields College will no longer be a subsidiary company of CH Education. 8. Directors' and Substantial Shareholders' Interests None of the Directors, substantial shareholders of CHHB or person connected with them has any interest, direct or indirect, in the Disposal. 9. Documents for Inspection A copy of the S&P Agreement will be available for inspection during normal business hours at the Registered Office of CHHB at 9th Floor, Block A, The Mines Waterfront Business Park, 3, Jalan Tasik, The Mines Resort City, 43300 Seri Kembangan, Selangor. DMIB BERHAD: Stockholder's OK Reorganization Scheme --------------------------------------------------- Further to the announcement dated 29 March 2003, Alliance Merchant Bank Berhad, for and on behalf of the Board of Directors of DMIB Berhad, announced that the stockholders had, at the Company's court convened meeting and extraordinary general meeting held on April 23, 2003, approved all the resolutions to give effect to the Proposed Reorganization Scheme. KSU HOLDINGS: Postpones Winding Up of Unit ------------------------------------------ KSU Holdings Berhad announced that the hearing for the Winding- up Petition on unit Kumpulan Sepang Utama Sdn Bhd (KSUSB), which was scheduled on 23rd April 2003, has been postponed to 23 July 2003. SENG HUP: Unit Enters Voluntary Winding Up ------------------------------------------ Seng Hup Corporation Berhad (Special Administrators Appointed) announced that Dasar Jernih Sdn. Bhd., a wholly owned subsidiary of the Company has been placed under creditors' voluntary winding-up pursuant to Section 254 of the Companies Act, 1965 and the shareholders and creditors of Dasar Jernih Sdn. Bhd. had resolved to appoint Mr Tan Kim Leong, JP as the Liquidator at the respective meetings held on 22 April 2003. SITT TATT: Extraordinary General Meeting Results ------------------------------------------------ The Company informed that the shareholders have approved ALL the Ordinary Resolutions and Special Resolutions as per the Notice of Meeting at the Extraordinary General Meeting held on 23 April 2003. Pursuant to the above, the Board of Directors has on even date, approved the issuance and allotment of the 125,125,000 new Ordinary Shares and 34,138,000 Irredeemable Convertible Preference shares in respect of the Proposed Acquisitions subject to the approval-in-principle for the listing and quotation of the said securities from the Kuala Lumpur Stock Exchange and the approval of the MISL & Associates Sdn Bhd's waiver application by the Securities Commission. Completion of this acquisition of the Company's new core business will be completed by May 2003 accordingly. SUNWAY CITY: Acceptance of Loan Facility ---------------------------------------- Pursuant to Part C of Chapter 9, Paragraph 9.04 of the Kuala Lumpur Stock Exchange Listing Requirements, the Board of Directors announced that Sunway Resort Hotel Sdn Bhd (SRH), a wholly owned subsidiary of Sunway City Berhad has secured a Loan Facility of RM60,000,000 from HSBC Bank Malaysia Berhad. SRH has an authorized and paid-up share capital of RM10,000,000 respectively. Its principal activity is that of a hotelier. The above Loan Facility will be used to part finance the construction cost of a 4-star 549-room hotel adjacent to the existing 5-star Sunway Lagoon Resort Hotel in Bandar Sunway, Petaling Jaya. ===================== P H I L I P P I N E S ===================== MANILA ELECTRIC: Nasecore Wants Meralco Under Receivership ---------------------------------------------------------- The National Association of Electricity Consumers for Reforms (Nasecore) is urging the Philippine government to put the Lopez- controlled Manila Electric Co. (Meralco) under receivership, the Philippine Star said on Thursday, citing Nasecore President Pete Ilagan. Once under receivership, Ilagan said the government should rehabilitate Meralco to do away with excess expenditures. Ilagan said placing Meralco under the supervision of the government would protect consumers from a possible backlash following the utility firm's pronouncement that it could go bankrupt as a result of the Supreme Court's ruling on the refund issue. Agham, a group of scientists based in the University of the Philippines-Diliman, said the overcharges could now amount to 38 billion pesos. PHILIPPINE AIRLINES: Airline Sues Union For P1.0B ------------------------------------------------- Philippine Airlines filed a suit against its former pilots' union over an alleged illegal 22-day strike in 1998, according to AFX Asia on Wednesday. The airline is seeking compensation of 1 billion pesos in actual and exemplary damages resulting from the work stoppage. The complaint was filed with the National Labor Relations Commission. The report said the Labor department had declared the strike illegal, and the Court of Appeals and the Supreme Court consequently upheld the ruling. PHILIPPINE LONG: Cuts Leased Line Rates For ISP's ------------------------------------------------- Philippine Long Distance Telephone Co. (PLDT) has reduced by half its leased line rates for independent Internet service providers (ISPs) to only 50,000 pesos a month for an E1/R2 circuit from the previous of 90,000 pesos to 10,000 pesos, AFX Asia reports. An E1/R2 is a circuit that can handle 30 simultaneous calls at any given time. Earlier, the Philippine Internet Services Organization accused PLDT of discriminatory pricing of lines. The group claimed PLDT had been charging independent ISPs rates higher than those it charged regular corporate customers. VICTORIAS MILLING: Moving to Full Rehabilitation ------------------------------------------------ Victorias Milling Company, Inc. (VMC) continued its momentum towards full rehabilitation by posting gains as of the middle of the current crop year covering the period September, 2002 to February, 2003, the Manila Bulletin said Wednesday. VMC President Arthur Aguilar said that for the first six months of the current crop year, raw sugar production was at 3.5 million bags while refined sugar production was at 3.9 million bags, which are 7 percent and 26 percent higher than those of the same period last year, respectively. VMC accounts for approximately 13 percent of raw sugar and 31 percent of refined sugar production in the Philippines. ================= S I N G A P O R E ================= CHARTERED SEMICON: May Sign Up With Philips, Kelive --------------------------------------------------- Chartered Semiconductor Manufacturing announced during its first quarter results that it had signed up with a volume customer, Kelive reports. Although no names were mentioned, Kelive believe the customer is Philips Semiconductor. There are two reasons: 1). Philips has shut down two of its fabs in the United States. 2). It has openly said that it would outsource more production to Asian foundries. According to news report, Philips is looking to increase its outsourcing from 10 percent to 20 percent-30 percent of its requirements. However, it would give priority to Taiwan Semiconductor Manufacturing Corporation (TSMC), in which it has a 22 percent stake. It also said that there would be no new orders in the short term. This is because even after the fab shutdowns, Philips is still only running at 80 percent capacity utilization. Kelive believes that any significant orders would only flow in next year. If Chartered wins 10 percent of the additional outsourcing from Philips, it would mean US$25m-50m in new sales. Valuation/Recommendation. Kelive have factored 12 percent, or about US$60m, in revenue growth next year. This has factored in some customer wins such as this. As such, Kelive is maintaining its current forecasts and SELL recommendation. DATACRAFT ASIA: Issues Additional Info on Disposal of Opsis ----------------------------------------------------------- Further to the announcement released on April 22, 2003 on the Disposal of Opsis, Datacraft Asia Ltd Datacraft would like to furnish additional information in accordance with clause 1010 of the Listing Manual: a. Datacraft is disposing the entire share capital of Datacraft Opsis Inc Opsis, comprising 99,000 fully paid ordinary shares of Philippine pesos 100 each. b. The sale of Opsis is for a nominal consideration of Philippine pesos 9.9 million (approximately US$189,000), which was arrived at after negotiations on a willing buyer, willing seller basis. The sale price will be satisfied in cash, half of which was paid on completion and the remaining will be paid in 3 installments over the next 6 months. c. There are no material conditions attached to the sale of Opsis. d. The net asset value of Opsis at the time of disposal is zero. No third party valuation has been commissioned. e. The sales proceeds will be added to the working capital of the Datacraft Group. f. The operating loss before income tax of Opsis for the last financial period was US$854,000. g. The net tangible asset of Datacraft Group as at 30 September 2002 was US$171.86 million. Assuming that the sale of Opsis had been effected at the end of last financial year, the effect on the net tangible asset per share of Datacraft would be immaterial. h. The net loss of Datacraft Group for the period ended 30 September 2002 was US$34.8 million. Assuming that the sale of Opsis had been effected at the end of last financial year, the loss per share of Datacraft would have increased by approximately 7.5 percent. i. Rationale for the sale of Opsis: As part of overall rationalisation of the Datacraft Group operations and to return to the core business of Datacraft, the Directors consider it in the interests of the Company to dispose of Opsis. j. None of the Directors or controlling shareholder has any interest, direct or indirect, in the sale of Opsis. FLEXTECH HOLDINGS: Increases Investment in Subsidiary ----------------------------------------------------- The Board of Directors of Flextech Holdings Limited announced that the Company has increased its investment in its wholly- owned subsidiary, FE-Global Electronics Pte Ltd FEG, by subscribing for an additional 3,800,000 ordinary shares of S$1.00 each in FEG, thereby increasing the issued and paid-up share capital of FEG from the existing S$5,600,661 to S$9,400,661, at a subscription price of S$1.00 per share in cash. FEG remains a wholly owned subsidiary of the Company following the subscription. In line with the subscription, FEG has also increased its authorized share capital from the existing S$7,000,000 to S$10,000,000 by the creation of 3,000,000 ordinary shares of S$1.00 each. The above transaction is not expected to have a material impact on earnings per share or the net tangible asset of the Flextech Holdings Limited group for the financial year ended 31 December 2002. Apart from Mr Onn Sin Ching being a director and Chief Executive Officer of FEG, none of the directors or substantial shareholders of the Company has any interest, direct or indirect, in the above transaction. SEATOWN CORPORATION: Creditors Vote Against Scheme -------------------------------------------------- The Directors of Seatown Corporation Ltd. announced that at the Creditors' Meeting of Seatown Foundation Engineering Pte Ltd (SFEPL) held on 3 April 2003, the creditors of SFEPL voted against the proposed scheme of arrangement for SFEPL. Notwithstanding the foregoing, Seatown Construction Pte Ltd SCPL and Mr Soh Kian Shang SKS will still proceed with the proposed sale and purchase of shares in SFEPL, upon amended terms to be agreed upon between SCPL and SKS Amended Sale and Purchase. SFEPL filed a petition in the Singapore High Court on 10 April 2003 for an order that SFEPL be placed in judicial management. The petition filed by SFEPL included an amended draft scheme of arrangement for consideration by the High Court. The petition will be heard on 9 May 2003. The terms of the Amended Sale and Purchase will include a condition that the amended draft scheme of arrangement described above be approved by the Singapore High Court and the creditors of SFEPL on such terms as may be agreed between the judicial manager, if appointed in respect of SFEPL, and the creditors of SFEPL. =============== T H A I L A N D =============== BT SECURITIES: Willing to Sell BankThai Shares at Paltry Price -------------------------------------------------------------- BT Securities, the underwriter of BankThai's IPO in September last year, is negotiating with European financial groups over the sale of 117 million shares in the bank, acquired after the IPO failed to attract enough investors. Business Day says, aside from these foreign groups, three other local mutual funds have also sent out feelers. Under Thai laws, BT Securities must dispose the shares within a year or raise the THB1.2 billion cash equivalent of the shares. The broker sold the shares during the IPO at 10.3 baht each. It is now trading at 8.4 baht. BT Securities Managing Director Kittisak Amornchairotkul told Business Day his Company is willing to sell the BankThai shares at a losing price: "The selling price will depend on proposed conditions. If we sell at a loss, we must make sure the new partner will improve our business." The stakes currently with BT Securities represents about 10% of the bank. It requires the broker to pay an interest of around THB5-6 million a month, Business Day says. 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, Mavy Nineza-Merlin, Ma. Cristina Pernites-Lao, Editors. Copyright 2003. 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 ***