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/raid1/www/Hosts/bankrupt/TCRAP_Public/980225.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 Wednesday, February 25, 1998, Vol. 1, No. 7 Headlines C H I N A CHENGDU AIRCRAFT: Northrop Grumman Dallas Forms Alliance DAH CHONG HONG: Perdue Chicken in Joint Venture LIAONING SECURITIES: Duke & Company Announces Business Alliance. H O N G K O N G I N D O N E S I A J A P A N ASAHI BREWERIES: Moody's Assigns Baa3 Rating to Unsecured Notes CHUO TRUST: Consolidating Branch Operations DAI-ICHI SECURITIES: Company Profile DAI-ICHI SECURITIES: Financial Overview DAI NIPPON: Financial Overview DAIEI INC: Reverses Forecast to Pretax Loss of 25 Billion Yen DENKI KAGAKU: Moody's Assigns Ba3 Rating to Unsecured Notes KOBE STEEL: Moody's Assigns Baa3 Rating to Unsecured Notes MATSUYADENKA CO.: Financial Overview MAZDA MOTOR: Moody's Assigns Baa3 Rating to Unsecured Notes MITSUBISHI ELECRIC: Quitting the U.K. Consumer PC Market MITSUBISHI MOTORS: May Close Three Pick-Up Truck Lines MITSUBISHI PLASTIC: Yen 1 Billion Annual Loss Expected MITSUI CHEMICALS: Moody's Assigns Baa3 Rating to Unsecured Notes NIEHIEI CO.: Financial Overview NOZAKI & CO.: Financial Overview RYOBI, LTD.: Company Profile RYOBI, LTD.: Financial Overview SEIBU SAISON: Britain's Bass Group Close to Acquisition SHIMURA KAKO: Company Profile SHIMURA KAKO: Financial Overview SHOKUSAN JUTAKU: Company Profile SHOKUSAN JUTAKU: Financial Overview SUMITOMO OSAKA: Moody's Assigns Ba2 Rating to Unsecured Notes TAKA-Q CO.: Financial Overview TOHO MUTUAL: Financial Overview TOKYO TEKKO: Financial Overview TOSHOKU, LTD.: Financial Overview TOSHOKU LTD.: Investors Hope for Toyota Bailout UCHIDA YOKO: Financial Overview YAMAICHI SECURITIES: Moody's Withdraws Debt Ratings YAMAICHI SECURITIES: Shareholders Hopeful for Recovery K O R E A DAEWOO: Joint Venture Dispute HYUNDAI MOTOR: Suspends Production of All Models Except One MANDO MACHINERY: In Talks to Sell Factories to Foreigners MANDO MACHINERY: Unionists Call Off a Strike SK TELECOM: 42 Percent Fall in 1997 Net Earnings SAMSUNG: Denies Reports of Intel Taking Equity Stake M A L A Y S I A COMMERCE ASSET-HOLDING: Can Remain Viable RAM: Launches Malaysian Government Securities Index P H I L I P P I N E S ORIENT COMMERCIAL: Rizal Commercial May Be New Owner S I N G A P O R E T H A I L A N D NAKOMTHAI STRIP MILL: Junk Bond Status to Proposed US$400 M Bond NAKORNTHON BANK: Bank of Nova Scotia Considers Buying Stake SIAM CITY BANK: Financial Overview THAI DANU: First Bank with Foreign Majority Partner ======== C H I N A ========= CHENGDU AIRCRAFT: Northrop Grumman Dallas Forms Alliance -------------------------------------------------------- China's economic "reform and opening" have produced a far-flung partnership between one of its major state-owned enterprises in Chengdu and the Dallas-based commercial aircraft division of Northrop Grumman Corp. Both parties say the arrangement is paying dividends. In 1995, Northrop Grumman entered into a partnership with Chengdu Aircraft to build tail-section components for Boeing 757 airplanes. The first components produced by the partnership - the 757's vertical fin or stabilizer - are scheduled for delivery in July, said Mr. Malooly, general manager of Commercial Aircraft Co., Northrop Grumman's subsidiary for its China production. Delivery of horizontal stabilizers will begin in October, and a third 757 component, the aft cabin, will be shipped beginning in 2000, he said. The life of the agreement with Chengdu Aircraft will be eight to 12 years, he said, depending on Boeing's rate of production. For Chengdu Aircraft, the arrangement produces 300 full-time assembly-line jobs, Mr. Wang said, as well as work for many employees in support jobs and in other product lines. Chengdu Aircraft, whose primary job is to produce fighter aircraft for the Chinese government, has similar commercial arrangements to produce parts for Boeing's MD-80 line, which is being discontinued, and for Europe's Airbus consortium. The commercial arrangements are needed, Mr. Wang said, to make up for shrinking levels of government support for his company. For Northrop Grumman, a "tier one" supplier for Boeing, the China partnership is a result of Boeing's decision to locate aspects of its aircraft production in China. Once the decision was made to go into China, Chengdu was selected from among the Chinese cities with aircraft production facilities after an in-depth Northrop Grumman audit, Mr. Malooly said. Several factors went into the decision, including the quality of the facilities and people and on the Chengdu plant's ability to perform specific processes, such as metal bonding. Another factor was the cost of labor, which was low enough to offset high costs in other areas such as transportation, and housing and support for Northrop Grumman employees, he said. The structures that Northrop Grumman are producing in Chengdu are the same ones that it now builds in Grand Prairie, Mr. Malooly said, but this was not simply a case of shipping production overseas to take advantage of lower labor costs. He described the move as part of the cost of doing business with China. "Boeing's in China to sell airplanes," Mr. Malooly said. "The more airplanes Boeing sells, the more airplanes we build, so we support any of those initiatives." At any rate, production in the Dallas- Fort Worth area will continue, he said. "We're going to continue producing that structure in Dallas for a long time," he said. "We don't feel you can turn it over to China as a single source. There's too much risk involved. . . . We're going to protect our interest by producing it here." (Dallas Morning News-22-Feb-1998) DAH CHONG HONG: Perdue Chicken in Joint Venture ----------------------------------------------- Perdue Farms Inc., the Salisbury-based company that has been given much of the credit for putting chicken on the American dinner table, would like to put more in Chinese homes. The company announced yesterday that it has entered into a joint venture with a Chinese company to establish a fully integrated poultry processing complex near Shanghai similar to its operations on Maryland's Eastern Shore. The complex, which is expected to be completed by the end of the year, will have a hatchery and a chicken processing plant. The chickens will be raised by contract growers, as in the United States. "We will be bringing U.S. poultry processing techniques to China," said Dick Auletta, a spokesman for Perdue. The arrangement with Dah Chong Hong, a large trading company that is also involved with marketing such diversified items as automobiles and cosmetics, will be Perdue's first production operation overseas. Perdue declined to disclose its investment in the complex or say how many chickens it will process annually. Auletta said the China complex "will be a significant operation," but not as large as its Eastern Shore facilities. Perdue produces abut 87 million chickens in Maryland each year. It employs about 2,300 workers, and its annual payroll is about $65 million. "The current market in Shanghai is fragmented and growing dramatically, especially for yellow chicken products," James A. Perdue, the third-generation chief executive of the family-owned business, said in a prepared statement. The yellow chicken in China won't be the same as those grown in the United States, according to Auletta. He said the "yellow chicken" to be processed at the complex is "highly prized" in the Shanghai market but not as broad-breasted as the one grown here. Given the nature of the Chinese market, fresh processed chickens as well as live birds will be sold. Perdue chicken is no stranger to Chinese consumers. The company has been exporting its chicken products there for seven years. Each week Perdue processes in excess of 42 million pounds of chicken products and 3.5 million pounds of turkeys. About 10 percent of the company's output is exported, which has become the fastest-growing segment of its business. Its export business has more than doubled in the past four years. Perdue ships to more than 30 countries around the world. China is a big market, but not the company's biggest, said Auletta. (Baltimore Sun 20-Feb-1998) LIAONING SECURITIES: Duke & Company Announces Business Alliance --------------------------------------------------------------- Duke & Company, a boutique investment banking firm that provides private placement, municipal bond, retail brokerage, equity research, and IPO services, announced the formation of a new business entity with China Liaoning Securities Company. The newly formed entity will be called Duke Liaoning Investment Consulting Company and will have its main office in Beijing. Under the arrangement, Duke & Company will, among other things, provide investment banking and consulting services to assist in the reorganization, listing and merging of Chinese state-owned enterprises. Duke will also provide consulting services to promote foreign investment in China and the United States, and support Chinese enterprises in raising funds in the U.S. capital markets. Shao Rongdi, Chairman of the Board of Directors of China Liaoning Securities Company, and Zhi Xingfu, Liaoning's President, together with Dr. James Wang, Duke's senior consultant, were instrumental in negotiating the business alliance. ================= H O N G K O N G ================= ================= I N D O N E S I A ================= ========= J A P A N ========= ASAHI BREWERIES: Moody's Assigns Baa3 Rating to Unsecured Notes --------------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to Yen 10 billion of 2.5% Series 12 Japan Bonds due 2003 issued by Asahi Breweries, Ltd. Moody's assigns a Baa rating to debt instruments it considers to be medium-grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. (Moody's 17-Feb-1998) CHUO TRUST: Consolidating Branch Operations ------------------------------------------- Chuo Trust & Banking Ltd. will consolidate operations of more than 10 outlets out of the 115 it will have after taking over operations from bankrupt Hokkaido Takushoku Bank Ltd., the Nihon Keizai newspaper said, without citing sources. The bank will review the operations of 11 outlets in the Tokyo area and five in the Osaka area. The bank aims to make some six billion yen in annual net operating profit from former Hokkaido Takushoku branches in the year ending March 2001, the paper said. (Nihon Keizai and Bloomberg News 21-Feb-1998) DAI-ICHI SECURITIES: Company Profile ------------------------------------ Dai-Ichi Securities Co., Ltd. 6-2 Nihonbashi-Muromachi 1-chome Chuo-ku, Tokyo, 103, JAPAN Telephone: (03) 3244-4701 Fax: (03) 5620-4675 Business: Securities brokerage business, with links to financial markets and research institutions worldwide. Also offers full range of underwriting services for bonds and IPOs. Founded 1938; Employs 1424 workers. DAI-ICHI SECURITIES: Financial Overview --------------------------------------- Dai-Ichi Securities Co., Ltd. Amounts stated are in millions of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Mar-1997 31-Mar-1996 31-Mar-1995 ----------- ----------- ----------- Total Revenues 22,210 24,795 21,044 Operating Income -4,846 -2,286 -8,938 Net Income -8,617 -923 -3,598 Current Assets 186,115 158,807 163,483 Current Liabilities 178,345 141,860 137,176 Working Capital 7,770 16,947 26,307 Total Assets 209,692 184,031 186,651 Total Liabilities 185,719 151,442 152,926 Shareholder Equity 23,973 32,589 33,725 DAI NIPPON: Financial Overview ------------------------------ Dai Nippon Construction Amounts stated are in millions of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Mar-1997 31-Mar-1996 31-Mar-1995 ----------- ----------- ----------- Total Revenues 302,529 295,556 0 Operating Income 5,402 7,800 0 Net Income -102 477 0 Current Assets 306,589 305,383 0 Current Liabilities 286,687 264,650 0 Working Capital 19,902 40,733 0 Total Assets 349,321 342,323 0 Total Liabilities 321,734 313,835 0 Shareholder Equity 27,587 28,488 0 DAIEI INC: Reverses Forecast to Pretax Loss of 25 Billion Yen ------------------------------------------------------------- Daiei Inc. (8263 JP ) fell 108 yen, or 16 percent, to 559. The supermarket chain operator reversed its previous forecast to a pretax loss of 25 billion yen for the year ending Feb. 28. That's 457.1 percent less than the most recent forecast by Toyo Keizai. The sharp decline in the retailer's profits, even amid floundering consumption, took investors by surprise. "The plunge in its profits, given the mild decline in its sales, is sign of management problems. Given the problems retailers are facing amid the tightening of credit, I don't see investors lining up to buy the company's stock," said Shigeru Kurabe, a fund manager at Taiheiyo Investment Trust Co. Ltd. DENKI KAGAKU: Moody's Assigns Ba3 Rating to Unsecured Notes ----------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Yen 5 billion of 2.35% Series 5 Japan Bonds due 2001 issued by Denki Kagaku Kogyo KK. Moody's assigns a Ba rating to bonds judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. (Moody's 17-Feb-1998) KOBE STEEL: Moody's Assigns Baa3 Rating to Unsecured Notes ---------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to: (a) Yen 3 billion of 3.5% Series 18 Japan Bonds due 2008 and (b) Yen 5 billion of 3.0% Series 19 Japan Bonds due 2006 issued by Kobe Steel, Ltd. Moody's assigns a Baa rating to debt instruments it considers to be medium-grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. (Moody's 17-Feb-1998) MATSUYADENKA CO.: Financial Overview ------------------------------------ Matsuyadenka Co., Ltd. Amounts stated are in thousands of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Mar-1997 31-Mar-1996 31-Mar-1995 ----------- ----------- ----------- Total Revenues 137,578,702 120,771,801 0 Operating Income 4,592,088 3,927,910 0 Net Income -270,502 3,099,372 0 Current Assets 62,632,935 56,064,268 0 Current Liabilities 44,699,816 40,006,639 0 Working Capital 17,933,119 16,057,629 0 Total Assets 118,491,209 119,511,395 0 Total Liabilities 79,788,800 79,794,688 0 Shareholder Equity 38,702,409 39,716,707 0 MAZDA MOTOR: Moody's Assigns Baa3 Rating to Unsecured Notes ----------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to: (a) Yen 5 billion of 3.0% Series 13 Japan Bonds due 2003 and (b) Yen 5 billion of 2.5% Series 12 Japan Bonds due 2001 issued by Mazda Motor Corp. Moody's assigns a Baa rating to debt instruments it considers to be medium-grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. (Moody's 17-Feb-1998) MITSUBISHI ELECRIC: Quitting the U.K. Consumer PC Market -------------------------------------------------------- Japanese electronics giant Mitsubisihi Electric Corp. is quitting the U.K. consumer personal-computer market because of declining profits and Asia's financial crisis. It says it will focus instead on selling it's Apricot-brand PCs to businesses, hoping to tap into the market for Internet-related services. (The Wall Street Journal 24-Feb-1998) MITSUBISHI MOTORS: May Close Three Pick-Up Truck Lines ------------------------------------------------------ Japan's Mitsubishi Motors Corp may close three of its four pick-up truck manufacturing lines in Thailand because of weak demand, a spokesman said yesterday. "We have suspended operations at the three lines since autumn," a Mitsubishi Motors spokesman said. He said it is still unclear if, or when, the company will resume production of pick-up trucks at the production lines. (Xinhua China Daily 11-Feb-1998) MITSUBISHI PLASTIC: Yen 1 Billion Annual Loss Expected ------------------------------------------------------ Shares in Mitsubishi Plastic Inc. (4213 JP ) fell 24 yen in trading Monday to 221. The plastic producer forecast a pretax loss of 1 billion yen for the full year ending in March. That's 190.9 percent less than the most recent forecast by Toyo Keizai. (Bloomberg News 23-Feb-1998) MITSUI CHEMICALS: Moody's Assigns Baa3 Rating to Unsecured Notes ---------------------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to: (a) Yen 10 billion of 2.25% Series 3 Japan Bonds due 2003 and (b) Yen 10 billion of 2.70% Series 4 Japan Bonds due 2005 issued by Mitsui Chemicals, Inc. Moody's assigns a Baa rating to debt instruments it considers to be medium-grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. (Moody's 17-Feb-1998) NIEHIEI CO.: Financial Overview ------------------------------- Niehiei Co., Ltd. Amounts stated are in millions of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Mar-1997 31-Mar-1996 31-Mar-1995 ----------- ----------- ----------- Total Revenues 311,084 284,108 59,549 Operating Income 2,527 -4,660 7,744 Net Income -10,159 -189 2,418 Current Assets 143,574 306,954 0 Current Liabilities 133,926 288,745 0 Working Capital 9,648 18,209 0 Total Assets 222,265 418,033 0 Total Liabilities 173,261 358,908 0 Shareholder Equity 49,004 59,125 0 NOZAKI & CO.: Financial Overview -------------------------------- Nozaki & Co., Ltd. Amounts stated are in millions of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Mar-1997 31-Mar-1996 31-Mar-1995 ----------- ----------- ----------- Total Revenues 154,409 151,937 167,828 Operating Income 1,070 1,650 -295 Net Income -2,390 23 -4,560 Current Assets 63,101 65,757 68,509 Current Liabilities 71,908 70,840 75,864 Working Capital -8,807 -5,083 -7,355 Total Assets 74,731 76,309 81,392 Total Liabilities 75,972 74,706 79,758 Shareholder Equity -1,241 1,603 1,634 RYOBI, LTD.: Company Profile ---------------------------- Ryobi, Ltd. 762, Mesaki-cho, Fuchu Hiroshima, 726, JAPAN Telephone: (0847) 41-1111 Fax: Business: Manufacture of die castings for automobiles, electrical appliances, and office automation equipment. Manufactures printing equipment, power tools and building hardware (e.g., hinges). Founded 1943; Employs 2403 workers. RYOBI, LTD.: Financial Overview ------------------------------- Ryobi, Ltd. Amounts stated are in millions of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Mar-1997 31-Mar-1996 31-Mar-1995 ----------- ----------- ----------- Total Revenues 208,189 196,417 197,624 Operating Income 6,153 1,301 7,197 Net Income -3,775 -4,166 -457 Current Assets 126,880 123,753 123,753 Current Liabilities 128,069 124,033 124,033 Working Capital -1,189 -280 -280 Total Assets 225,504 227,006 227,006 Total Liabilities 188,737 185,217 185,217 Shareholder Equity 36,767 41,789 41,789 SEIBU SAISON: Britain's Bass Group Close to Acquisition ------------------------------------------------------- Britain's Bass Group is reportedly close to an agreement to acquire the Inter-Continental Hotels & Resorts chain from Japan's Seibu Saison Group. The Wall Street Journal reports executives tracking the auction process quote a price of more than $2.8 billion. The Journal adds Bass appears to have won a bidding war with Patriot American Hospitality and Marriott International. SHIMURA KAKO: Company Profile ----------------------------- Shimura Kako Co., Ltd. 3-1-1 Marunouchi, Chiyoda-ku Tokyo, 100, JAPAN Telephone: (03) 3216-6431 Fax: (03) 3214-3630 Business: Manufacture and sale of nickel, cobalt, other metals and metal chlorides, special steels, and alloys. Also involved in real estate management, lending, leasing and securities trading. Founded 1946; Employs 32 workers. SHIMURA KAKO: Financial Overview -------------------------------- Shimura Kako Co., Ltd. Amounts stated are in thousands of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Mar-1997 31-Dec-1996 31-Dec-1995 ----------- ----------- ----------- Total Revenues 2,800,374 9,534,993 12,253,256 Operating Income 49,196 -75,689 187,399 Net Income -309,650 76,170 126,330 Current Assets 3,664,228 3,871,642 8,672,069 Current Liabilities 3,516,787 3,061,613 5,448,226 Working Capital 147,441 810,029 3,223,843 Total Assets 6,861,658 6,913,591 9,375,626 Total Liabilities 4,147,362 3,757,102 6,162,737 Shareholder Equity 2,714,296 3,156,489 3,212,889 SHOKUSAN JUTAKU: Company Profile -------------------------------- Shokusan Jutaku Sogo Co., Ltd. 11-17 Yoyogi 2-chome Shibuya-ku, Tokyo, 151, JAPAN Telephone: (03) 3370-1216 Fax: (03) 3370-1886 Business: Construction, sale and financing of houses. Sale of construction materials, furniture, hot springs and water supplies. Parking lot management. Casualty, life and automobile insurance. Founded 1950; Employs 1752 workers. SHOKUSAN JUTAKU: Financial Overview ----------------------------------- Shokusan Jutaku Sogo Co., Ltd. Amounts stated are in millions of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Mar-1997 31-Mar-1996 31-Mar-1995 ----------- ----------- ----------- Total Revenues 150,511 139,223 149,812 Operating Income -169 666 270 Net Income -4,908 -5,778 -8,185 Current Assets 126,934 180,601 204,383 Current Liabilities 115,094 138,870 144,022 Working Capital 11,840 41,731 60,361 Total Assets 175,318 232,537 249,681 Total Liabilities 151,369 203,582 214,944 Shareholder Equity 23,949 28,955 34,737 SUMITOMO OSAKA: Moody's Assigns Ba2 Rating to Unsecured Notes ------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Yen 5 billion of 2.6% Series 2 Japan Bonds due 2001 issued by Sumitomo Osaka Cement Co., Ltd. Moody's assigns a Ba rating to bonds judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. (Moody's 17-Feb-1998) TAKA-Q CO.: Financial Overview ------------------------------ Taka-Q Co., Ltd. Amounts stated are in thousands of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 28-Feb-1997 29-Feb-1996 28-Feb-1995 ----------- ----------- ----------- Total Revenues 32,714,898 40,236,643 0 Operating Income -1,191,205 -1,569,430 0 Net Income -691,523 -2,798,306 0 Current Assets 17,555,877 17,652,090 0 Current Liabilities 23,487,337 23,611,504 0 Working Capital -5,931,460 -5,959,414 0 Total Assets 50,481,530 53,808,286 0 Total Liabilities 29,532,050 31,108,633 0 Shareholder Equity 20,949,480 22,699,653 0 TOHO MUTUAL: Financial Overview ------------------------------- Toho Mutual Life Insurance Co. Amounts stated are in millions of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Mar-1997 31-Mar-1996 31-Mar-1995 ----------- ----------- ----------- Total Revenues 0 0 0 Operating Income 1,314,320 1,125,435 0 Net Income 0 0 0 Current Assets 0 0 0 Current Liabilities 0 0 0 Working Capital 0 0 0 Total Assets 4,509,524 4,994,121 0 Total Liabilities 4,495,561 4,976,794 0 Shareholder Equity 13,963 17,327 0 TOKYO TEKKO: Financial Overview ------------------------------- Tokyo Tekko Co., Ltd. Amounts stated are in thousands of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Mar-1997 31-Mar-1996 31-Mar-1995 ----------- ----------- ----------- Total Revenues 33,295,326 29,594,482 28,702,157 Operating Income -1,277,317 -4,397,780 -5,049,303 Net Income -1,870,948 -4,850,094 -5,560,162 Current Assets 30,396,022 46,546,813 46,546,813 Current Liabilities 30,554,305 26,882,173 26,882,173 Working Capital -158,283 19,664,640 19,664,640 Total Assets 69,196,143 86,178,897 86,178,897 Total Liabilities 54,744,891 69,856,697 69,856,697 Shareholder Equity 14,451,252 16,322,200 16,322,200 TOSHOKU, LTD.: Financial Overview --------------------------------- Toshoku, Ltd. Amounts stated are in millions of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Oct-1997 31-Oct-1996 31-Oct-1995 ----------- ----------- ----------- Total Revenues 0 824,898 810,073 Operating Income 0 6,031 5,501 Net Income 0 1,661 1,318 Current Assets 0 792,024 757,670 Current Liabilities 0 621,118 566,646 Working Capital 0 170,906 191,024 Total Assets 0 837,405 801,915 Total Liabilities 0 756,130 720,806 Shareholder Equity 0 81,275 81,109 TOSHOKU LTD.: Investors Hope for Toyota Bailout ----------------------------------------------- Shares in Toshoku Ltd. (8034 JP ) rose 4 yen to 6 in trading Friday after a report surfaced indicating Toyota Tsusho Corp., a midsize trading company affiliated with Toyota Motor Corp., may bailout Toshoku, a food company which went bankrupt in December. The report appeared in the Nihon Keizai newspaper said without citing sources. Toyota Tsusho said no decision had been reached and Toshoku said it couldn't comment on the report. Toyota Tsusho is expected to say by next week if it will rescue the failed food company. (Bloomberg News 21-Feb-1998). UCHIDA YOKO: Financial Overview ------------------------------- Uchida Yoko Co., Ltd. Amounts stated are in millions of Yen for the year ending on each date indicated. Zeros generally indicate financial data is not available. 20-Jul-1997 20-Jul-1996 20-Jul-1995 ----------- ----------- ----------- Total Revenues 168,684 159,645 145,839 Operating Income 1,791 401 1,474 Net Income -376 833 917 Current Assets 78,547 77,690 0 Current Liabilities 82,340 81,349 0 Working Capital -3,793 -3,659 0 Total Assets 132,463 132,500 0 Total Liabilities 101,255 101,282 0 Shareholder Equity 31,208 31,218 0 YAMAICHI SECURITIES: Moody's Withdraws Debt Ratings --------------------------------------------------- Moody's Investors Service announced that it has withdrawn its ratings on all senior unsecured notes and commercial paper issued by Yamaichi Securities Co., Ltd. (Moody's 17-Feb-1998) YAMAICHI SECURITIES: Shareholders Hopeful for Recovery ------------------------------------------------------ Shares in Yamaichi Securities Co. (8602 JP ) were unchanged at 3 yen in active trading Friday. The failed brokerage's shares have been among the Tokyo Stock Exchange's six most actively traded stocks on 11 of the last 16 days. Yamaichi's popularity is driven by speculation the company still has net assets to pay out to shareholders. "To make the argument that there's net worth, you have to accept the reported numbers at face value," said David Richards, vice president of Goldman Sachs (Japan) Ltd. "It's not clear to me that's a fair assumption," Richards added. (Bloomberg News 21-Feb-1998) ========= K O R E A ========= DAEWOO: Joint Venture Dispute ----------------------------- South Korean car maker Daewoo is in a dispute with a Philippine joint venture partner over a stalled assembly plant project and the partner's dealership deal with US rival Chrysler, industry officials said yesterday. Daewoo demanded that Transfarm and Co Inc convert the South Korean firm's US$15 million (S$25.2 million) exposure to the joint venture, Trans-Daewoo Automotive Manufacturing Corp into equity to enable it to gain control. Trans-Daewoo is building an assembly plant in the central island of Cebu but the project is now three years behind its scheduled completion. The Asian financial crisis has aggravated problems, with Daewoo cars sold by Transfarm plunging 45 per cent to 1,687 in 1997. (The Straits Times, Feb 17,98-- AFP.) HYUNDAI MOTOR: Suspends Production of All Models Except One ----------------------------------------------------------- Hyundai Motor Co., South Korea's largest vehicle maker, suspended production over the weekend of all its models except a newly introduced minicar while awaiting tires from manufacturers, company sources said Sunday, in an impasse that threatens to halt all motor-vehicle production in the country. A spokesman confirmed that three major tiremakers Kumho Tire Co., Hankook Tire Co. and Woosung Tire Co. had refused to deliver the tires. The tiremakers, hit hard in the country's economic crisis, are demanding to be paid 15 percent to 80 percent more for their products. The country's second-ranking automaker, Daewoo Motor Co., said it would have to suspend production Monday if talks with the tire suppliers failed, and the third-largest manufacturer, Kia Motors Corp., said it might have to suspend its assembly lines by the end of the week. Compounding the uncertainty, workers at Mando Machinery, the country's largest maker of automotive components and a unit of the Halla Group, said they would go on strike Monday if the company failed to provide a "special agreement" providing job security. Mando, which is on the brink of bankruptcy after failing to pay off debts due in December, makes components such as transmission gears, brakes, alternators and generators for all three vehicle manufacturers. A Kia spokesman said he expected the motor-vehicle companies to come to terms with the tiremakers but added, "It's inevitable we will stop production on Friday if Mando goes on strike." The difficulties confronting the South Korean vehicle industry illustrate the weakness of the entire economy as banks and companies struggle to meet debt payments. Hyundai, Daewoo and Kia employ about 100,000 workers; several times that many are on the payrolls of hundreds of other companies of various sizes that supply materials and parts needed for the automakers' products. While negotiating with suppliers, all three major vehicle manufacturers have also suffered from sharply declining domestic sales. Daewoo, with a debt-equity ratio of at least 5-to-1, is negotiating to sell as much as 50 percent of its equity to General Motors Corp.; Kia has said it hopes that Ford Motor Co., which has a 9 percent stake in the company, will substantially increase its investment. The problems of the tire manufacturers as well as of Mando dramatize the way in which the economic crisis can bring an industry to its knees. The tire companies and Mando are all units of chaebol, or conglomerates, that are suffering from rapidly mounting debts. They have all cited increases in the price of oil as the reason they have to charge more just to stay in business. Managers at Mando, which employs about 8,000 workers, said they hoped to maintain 70 percent of production by putting white-collar workers on assembly lines. The move threatened a standoff between management and labor that could set a precedent for other industries. More than half of Mando's employees belong to a company union that is affiliated with the Korea Confederation of Trade Unions. That group canceled plans Feb. 12 for a nationwide general strike to protest a new law authorizing layoffs but has warned it will renew calls for strikes if companies "abuse" their new right. While suspending its other lines, Hyundai plans to keep producing the tiny ATOZ, which has emerged as the country's biggest-selling car in a time of economic duress. The name is actually "A to Z" in capital letters, a spokesman said, which is intended to signify that the car "can do anything." Hyundai, which accounts for about half of all sales of South Korean-made cars, trucks and buses, last year sold 1.25 million vehicles, about 52 percent of them in South Korea. Hyundai's domestic sales plunged from 38,186 units in December to 17,677 in January but were still well ahead of those of Daewoo and Kia.(InternationalHeraldTribune23-Feb-1998) MANDO MACHINERY: In Talks to Sell Factories to Foreigners --------------------------------------------------------- South Korea's largest car parts manufacturer, the insolvent Mando Machinery Corp, said yesterday that it was in talks to sell some of its seven factories to foreigners. "Negotiations are under way with major foreign firms on our offers to sell some of our factories," said Kim Kyong-taek, a spokesman for Mando's parent conglomerate, Halla Group, which went bankrupt in December. Kim said Mando might even sell more than 50 per cent of its equity to foreign partners. "Each of Mando's seven factories is seeking foreign partners, with no restrictions on offers," he said. "We will allow any form of tie-ups as long as Mando can keep managerial control." (Xinhua China Daily 11-Feb-1998) MANDO MACHINERY: Unionists Call Off a Strike -------------------------------------------- Unionists at South Korea's largest auto parts maker Mando Machinery Corp. on Monday called off a strike which would have paralyzed the country's troubled auto industry. The union said it had reached a last-minute agreement with management to cancel the strike, which was supposed to start Monday. Mando was declared insolvent in January. The agreement followed concessions by managers who promised to resume negotiations on the union's proposal for new company rules to protect workers from lay-offs. Mando's union has called for a separate union-management accord, refusing to endorse a new labor law allowing the mass dismissal of workers for restructuring efforts such as mergers and acquisitions. The demand was in line with new tactics pushed by the militant Korean Confederation of Trade Unions (KCTU), one of the country's two umbrella union groups. South Korea legislated the landmark lay-offs bill in early February. But the militant KCTU has refused to approve the bill, contending it did not contain concrete provisions for job safety. Mando provides parts to almost all South Korean auto firms, which have been hit by a backlog of unsold cars, sluggish domestic consumption and the country's prolonged currency crisis. (AgenceFrancePresse-23-Feb-1998) SK TELECOM: 42 Percent Fall in 1997 Net Earnings ------------------------------------------------ SK Telecom, South Korea's largest mobile phone service provider reported a 42 per cent fall in 1997 net earinings as it confronts a threatened shareholder revolt by US institutional investors next month. SK Telecom blamed the unexpected fall in profits to Won 113.6 bn ($68.5m) from Won 195.5bn in 1996 on increases in operating costs and losses from the devaluation of the Korean currency. Profit margins were down because of increased competition. This raised market costs for SK Telecom, which also increased capital spending as it switched its network to a digital system from an analogue one. Korea's Fair Trade Commission recently found that the SK Group, the parent for SK Telecom was allegedly using the cellular phone operator to provide hidden subsidies to other weaker group affiliates. The FTC said that SK Telecom paid inflated prices for equipment and services provided by other SK units, which cut its 1996 operating profit and resulted in lower dividend and tax payments. The US institutional investors, which hold nearly 10% of SK Telecom are demanding the right to appoint two outside directors. They also want shareholders to approve any overseas investments, foreign-denominated loans, and share issues abroad. The demands by the US investor funds represent the first serious challenge by foreigners against Korean corporate practices to protect share values. Foreign Investors hold a combined 33 per cent of SK Telecom. The deciding vote will be held by Korea Telecom, the state-run group with 19 per cent, and other Korean institutional investors. (Financial Times 24-Feb-1998) SAMSUNG: Denies Reports of Intel Taking Equity Stake ---------------------------------------------------- Samsung Electronics Co. has held talks with Intel Corp. about various forms of mutual cooperation, but isn't in negotiations with the U.S. company about the latter's taking an equity stake in the South Korean elecronics giant. =============== M A L A Y S I A =============== COMMERCE ASSET-HOLDING: Can Remain Viable ----------------------------------------- Commerce Asset-Holding Bhd (CAHB) can still remain a viable and independent entity should it decide to accept cash for the proposed sale of Bank of Commerce (M) Bhd (BOC) to Rashid Hussain Bhd (RHB), according to sources close to CAHB. RAM: Launches Malaysian Government Securities Index --------------------------------------------------- The development of the Malaysian bonds market into a transparent trading system as an alternative to the equity market would provide a more balanced financing structure to fund portfolio managers, said Rating Agency Malaysia Bhd chief executive officer Datuk C. Rajandram. To this end, RAM, in collaboration with an Australian portfolio management firm, launched the country's first monthly Malaysian Government Securities (MGS) index to provide a benchmark against measuring government bond performance. RAM is also keen in introducing an index to measure corporate bond performance. Rajandram also called for more transparency in the dealing of corporate bonds. He was speaking to journalists in Kuala Lumpur yesterday after RAM and its Australian partner, The Quant Shop Pty Ltd, launched the MGS index. The RAM-Quant Shop MGS Index aims to act as an analytical tool which allows fund managers to create portfolios incorporating government bonds. Equivalent to an equity market index, it measures the performance of the credit risk-free Malaysian Government Securities based on the monthly returns of each security, plus the coupons received, change in bond price and interest on coupons. The MGS index comprises three individual indices, namely the "short" (for securities covering one to three years), "medium" (three to seven years) and "long" (seven years and above) indices, plus the "all series" index incorporating the three. It is an accumulated index which means that price and income components are incorporated. The index starts at the 1,000 level from January 1994. The total outstanding value of MGS as at Dec 31, 1997 was RM66.3 billion. As at January 1998, the all series MGS index dropped to 1,132.357 from 1,132.868 at the end of December 1997. The short MGS index rose to 1,226.331 from 1,225.824, the medium index fell to 1,126.376 from 1,130.624 and the long MGS index rose to 1,110.594 from 1,108.158. The index is revalued based on data available up to the last working day of the month and then released within three days. "The bonds market is in a stage of development. With the MGS index, perhaps there will be possible changes in the way people run their portfolios. As at December 1997, the total outstanding value of MGS amounted to RM66.3 billion compared to RM21.5 billion of Cagamas bonds and about RM47.5 billion of corporate bonds. Asked if the amount of bonds issuance in Malaysia would fall due to the current economic scenario, Rajandram said there would be shrinkage in the sector but statutory regulations would ensure the continuance of bond issuance. On a similar index for corporate bonds, he said RAM is interested to explore this area but would first need to have access to information on the trading of such bonds. The MGS index obtains the required data on government bond trading from Bank Negara. Quant Shop managing director Larry Shepherd said the historical data for the period January 1994 to December 1997 showed that Malaysian domestic bonds have a one per cent chance of making a loss compared with seven per cent for international bonds and 33 per cent for domestic equities. (NewStraitsTimes-21-Feb-1998) ===================== P H I L I P P I N E S ===================== ORIENT COMMERCIAL: Rizal Commercial May Be New Owner ---------------------------------------------------- Rizal Commercial Banking Corp. (RCBC) submitted the highest bid and may well be on its way to becoming the new owner of the cash- strapped Orient Commercial Banking Corp. (Orient Bank). In a press conference late yesterday afternoon, Bangko Sentral Gov. Gabriel C. Singson said RCBC offered to buy Orient Bank for 1.85 billion Philippine pesos (PhP). Of this purchase price, PhP700 million will be infused into the bank as fresh equity while the remaining PhP1.1 billion will be applied against its non- performing loans (NPLs), originally estimated at PhP4.9 billion. Mr. Singson said another PhP1.1 billion representing the withdrawals of deposits when Orient Bank experienced a bank run will also be deducted from the total bad debts, bringing it down to approximately PhP2.8 billion. The Bangko Sentral ng Pilipinas (Central Bank of the Philippines) and the Philippine Deposit Insurance Corp. (PDIC) will then decide on the mode of payment for the bad loans. "This is still a hanging question since the PDIC has yet to decide on the amount of NPLs (it will absorb). Not all of these loans will be absorbed by the Bangko Sentral since they have been collateralized by assets of both the Orient Bank and its owner, Jose Go," Mr. Singson said. He said that as soon as the bad debts are paid, the Orient Bank- owned collateral will be returned to the bank. On the other hand, collaterals owned by Mr. Go will be retained by the Bangko Sentral to cover for any remaining bad debts. The bank's new owner is expected to pay the emergency loans extended by the central bank within six months. Some PhP2 billion in emergency loans was extended to the bank in early January. Despite these details, Mr. Singson emphasized the purchase price and the repayment scheme for Orient Bank's bad debts and emergency loans still have to be formally approved by the RCBC board of directors and the Monetary Board, the policy-making body of the Bangko Sentral. Representatives from RCBC and Orient Bank are expected to meet with the Monetary Board this Wednesday to discuss details of the sale. RCBC president Francisco Dizon could not be reached for comment as of presstime. Orient Bank has not been declared insolvent as its assets still exceed its liabilities. However, should the PDIC opt not to take in Orient Bank's bad debts, there is still a possibility that the bank may be closed, Mr. Singson said. With up to 99% of Orient Bank to be sold to RCBC, he added that Mr. Go "will not benefit from the exercise since the purchase price will go to the bank as fresh capital infusion while the rest will be used to reduce its NPLs." (Philippines - Business World - 24-Feb-1998) ================= S I N G A P O R E ================= =============== T H A I L A N D =============== NAKOMTHAI STRIP MILL: Junk Bond Status to Proposed US$400 M Bond ---------------------------------------------------------------- THAI debt instruments were delivered yet another body blow over the weekend when Moody's Investors Service assigned junk bond status to a proposed US$400 million bond (S$663 million) issue by Nakornthai Strip Mill (NSM Steel). Although Moody's had downgraded Thai debt to junk bonds last year, analysts felt that some major corporate players such as NSM Steel may be viewed favourably by the American debt markets. NSM Steel, the owner, developer, and operator of one of the most advanced and lowest cost thin-slab/flat-rolled steel mini-mills in the world, is headquartered in Chonburi, Thailand. Moody's assigned a B3 rating to NSM Steel's proposed US$250 million issue of mortgage notes due in 2006. The US ratings agency also accorded a Caa2 rating to the steel mill's proposed US$150 million issue of mortgage notes due in 2008. Analysts said that the news came as a blow to NSM Steel, which operates a 1.35 million tonne modern plant that was recently constructed. Moody's describes a B3 rating as being non-investment grade, and at the bottom of its "distinctively speculative, low credit-worthiness" junk bonds. A Caa2 rating is even further down the ladder and is "predominantly speculative with substantial risk, or in default". The bonds are to be issued by NSM Steel (Delaware) Inc, a wholly- owned subsidiary of NSM Steel Company which is registered in the Cayman Islands, and was set up to maintain offshore accounts for the bond issues. The Cayman firm is, in turn, a wholly-owned unit of NSM Steel. The funds raised from the bonds are to be used to finance a second phase completion of the mill, and repay US$50 million previously borrowed under a credit facility from a consortium of Thai banks and finance companies, as well as US$8 million in past interest. Moody's said that its ratings took into account NSM Steel's highly leveraged capital structure, and the risk that the full amount of bonds envisioned to be issued at this time would not be successfully placed, resulting in a shortage of funds needed to complete a second phase of the construction of the mill. The risk-fraught ratings further reflected the fact that one-third of NSM Steel stock is owned by the financially troubled Horrungruang Group, and other interests. However, on the positive side, Moody's noted that the design of NSM Steel's mini-mill was technically unique, buttressed by a low- cost operation, and high anticipated margins. Moreover, the mini- mill is assured of sales under an eight-year off-take agreement with Preussag Handel GmbH and Klockner Stahl-und Metallhandel GmbH, two of the largest international steel trading firms. Both these firms will buy 100 per cent of the mini-mill's output for the next three years, coming down to 25 per cent for the remaining years of the contract. However, Moody's is concerned that periodic gluts in the steel markets would squeeze the NSM Steel's margins in the international arena. Domestic steel demand in Thailand is highly uncertain following the 50 per cent decline in the value of the baht, and the massive crisis in the automobile and property sectors. In 1996, Thailand consumed some 5.7 million tonnes of flat-rolled steel, making the country the world's sixth-largest steel importer. NAKORNTHON BANK: Bank of Nova Scotia Considers Buying Stake ----------------------------------------------------------- Canada's Bank of Nova Scotia has expressed interest in acquiring a stake in Nakornthon Bank Plc, which plans to complete its capital raising within three weeks, a report said Monday. Nakornthon Bank president Thamnu Wanglee said the bank would increase its capital by up to four billion baht (88.8 million dollars) and offer its increased shares to a foreign investor, Krung Thep Thurakij newspaper reported. "Bank of Nova Scotia of Canada has clearly expressed that it wants to invest in the bank," he was quoted as saying. "The selected investors will be allowed to hold 40 percent in the bank." Thamnu also said the bank's capital adequacy ratio would be increased to 12 percent after the capital increase. The central bank of Thailand last week said it would tighten its definition of non-performing loans, making it harder for debt- ridden Thai banks to meet the government's capital adequacy requirements. So far this year the central Bank of Thailand (BoT) has taken over three commercial banks which failed to recapitalise by deadlines set by the government. Other banks are frantically searching for foreign partners to take major equity stakes and provide injections of fresh capital to boost reserves. Recapitalisation of the country's banking sector is a key condition of the International Monetary Fund's 17.2- billion-dollar bailout package to Thailand. (AgenceFrancePresse-23-Feb-1998) SIAM CITY BANK: Financial Overview ---------------------------------- Siam City Bank Public Co., Ltd. Amounts stated are in thousands of Baht for the year ending on each date indicated. Zeros generally indicate financial data is not available. 31-Dec-1997 31-Dec-1996 31-Dec-1995 ----------- ----------- ----------- Total Revenues 0 0 0 Operating Income 0 0 0 Net Income 0 3,509,057 3,160,333 Current Assets 0 0 0 Current Liabilities 0 0 0 Working Capital 0 0 0 Total Assets 0 239,575,962 206,651,469 Total Liabilities 0 218,641,209 187,166,947 Shareholder Equity 0 20,934,753 19,484,522 THAI DANU: First Bank with Foreign Majority Partner --------------------------------------------------- Thai Danu Bank PLC, Thailand's 12th-largest bank, has formed a strategic alliance with Development Bank of Singapore whereby DBS will take a 50.4% stake in TDB and pump cash into the operation to keep it afloat. This alliance marks the first foreign majority- stake investment in a Thai bank since Thailand revised its laws last year to permit foreign majority-stake investments in the country's banking institutions. An analysts with UBS Securities praised the TDB/DBS alliance and predicted that other foreigners will flock to Thailand to form alliances with Thailand's government-owned and commercial banks. (The Asian Wall Street Journal 16-Feb-1998) 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., Princeton, NJ USA, and Beard Group, Inc., Washington DC USA. Debra Brennan and Lexy Mueller, Editors. Copyright 1998. All rights reserved. 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 $875 per month 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 301/951-6400. * * * End of Transmission * * *