/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/980313.MBXT 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, March 13, 1998, Vol. 1, No. 18 Headlines C H I N A BANK OF CHINA: S&P Cuts Ratings BANK OF COMMUNICATIONS: S&P Cuts Ratings CHINA GENERAL AVIATION: Takeover by China Eastern CHINA INTERNATIONAL TRUST: S&P Cuts Ratings INDUSTRIAL AND COMMERCIAL BANK: S&P Cuts Ratings H O N G K O N G CATHAY PACIFIC: Financial Overview CATHAY PACIFIC: Profits Cut by 55% MILLENNIUM GROUP LTD: Announces Results I N D O N E S I A ASIA PULP & PAPER CO. LTD.: Placed on CreditWatch BARITO PACIFIC TIMBER (PT): Placed on CreditWatch DAYA GUNA SAMUDERA (PT): Placed on CreditWatch INDAH KIAT PULP: Placed on CreditWatch LONTAR PAPYRUS PULP: Placed on CreditWatch PABRIK KERTA: Placed on CreditWatch PINDO DELI PULP: Placed on CreditWatch SATELIT PALAPA: Placed on CreditWatch J A P A N AOKI INTERNATIONAL: Debt Rating Cut CHUO TRUST AND BANKING: Approval for Funds DAI-ICHI KANGYO BANK LTD.: Approval for Funds HITACHI CONSTRUCTION: Will Report Lower Profits JAPAN FOUNDATION: Cuts Pretax Profits KAYABA INDUSTRY: Will Report Lower Profits LONG-TERM CREDIT BANK LTD.: Approval for Funds MAZDA MOTOR: Downgraded to 'Below Average' MITSUBISHI MOTORS: Shares Fall on Losses NATIONAL HOUSE INDUSTRIAL: Shares Fall on Losses NIPPON CREDIT BANK LTD.: Approval for Funds YAMAICHI SECURITIES: Japan Asia to Purchase K O R E A HANBO STEEL: Final Debt Obligations Tallied HITACHI CONSTRUCTION: Anticipates Lower Profits KIA MOTORS: Anxiously Watching Ford/Samsung Deal SAMSUNG MOTORS: Ford Denies Deal M A L A Y S I A MALAYSIA MINING: Unaware of PNB Proposal SIME BANK: Details of KUB Malaysia Deal SIME DARBY: Expects RM246m Loss from Sime Bank P H I L I P P I N E S DUTY FREE FIRST: Granted Relief from Creditors NEC PHILIPPINES: More Retrenchment in Store S I N G A P O R E T H A I L A N D ALPHATEC: May Test New Bankruptcy Laws THAI DURABLE TEXTILE: Tries to Avoid Delisting ========= C H I N A ========= BANK OF CHINA: S&P Cuts Ratings ---------------------------- Standard & Poor's yesterday cut the foreign currency ratings outlook for four of china's biggest financial institutions, citing an expected weakening in the economy and the impact on state-owned enterprises. S&P said it would reduce outlook ratings from stable to negative for the Bank of China, Bank of Communications, Industrial and Commercial Bank of China and China International Trust and Investment Corp. The move follows a broader downgrading of the outlook on China's foreign currency ceilings by Moody's and underlines increased concerns about the economy and the country's banking sector. (Financial Times 12-Mar-1998) BANK OF COMMUNICATIONS: S&P Cuts Ratings ---------------------------- Standard & Poor's yesterday cut the foreign currency ratings outlook for four of china's biggest financial institutions, citing an expected weakening in the economy and the impact on state-owned enterprises. S&P said it would reduce outlook ratings from stable to negative for the Bank of China, Bank of Communications, Industrial and Commercial Bank of China and China International Trust and Investment Corp. The move follows a broader downgrading of the outlook on China's foreign currency ceilings by Moody's and underlines increased concerns about the economy and the country's banking sector. (Financial Times 12-Mar-1998) CHINA GENERAL AVIATION: Takeover by China Eastern --------------------------- H share China Eastern Airlines (CEA) hopes to have completed a takeover of China General Aviation Corp in northern Shanxi province in the second half of this year. The takeover, delayed last year, is being conducted in two stages. The first will see CEA's parent, Eastern Air Group, acquire China General Aviation and separate the airline's government functions from business operations. CEA deputy chief accountant Xia Yi said this would be completed by mid-year. The second stage will entail CEA acquiring from its parent China General's commercial aviation operations. Mr Xia said progress had been stalled due to the complicated restructuring of China General's assets, human resources and debts. The mainland's aviation industry is gearing up for a shake-up, as Beijing encourages the establishment of three or four aviation giants, including CEA, by 2000 through a series of mergers and acquisitions. This policy has made debt-ridden and loss-making China General an attractive takeover target. China General will help expand CEA's market from its eastern base, primarily in Shanghai. (South China Morning Post 11-Mar-1998) CHINA INTERNATIONAL TRUST: S&P Cuts Ratings ---------------------------- Standard & Poor's yesterday cut the foreign currency ratings outlook for four of china's biggest financial institutions, citing an expected weakening in the economy and the impact on state-owned enterprises. S&P said it would reduce outlook ratings from stable to negative for the Bank of China, Bank of Communications, Industrial and Commercial Bank of China and China International Trust and Investment Corp. The move follows a broader downgrading of the outlook on China's foreign currency ceilings by Moody's and underlines increased concerns about the economy and the country's banking sector. (Financial Times 12-Mar-1998) INDUSTRIAL AND COMMERCIAL BANK: S&P Cuts Ratings ---------------------------- Standard & Poor's yesterday cut the foreign currency ratings outlook for four of china's biggest financial institutions, citing an expected weakening in the economy and the impact on state-owned enterprises. S&P said it would reduce outlook ratings from stable to negative for the Bank of China, Bank of Communications, Industrial and Commercial Bank of China and China International Trust and Investment Corp. The move follows a broader downgrading of the outlook on China's foreign currency ceilings by Moody's and underlines increased concerns about the economy and the country's banking sector. (Financial Times 12-Mar-1998) ================= H O N G K O N G ================= CATHAY PACIFIC: Financial Overview ---------------------------- Cathay Pacific Airways Limited announced on 11/3/98: (stock code: 293) Year end date: 31/12/97 Currency: HK$ Last Current Corresponding Period Period from 1/1/97 from 1/1/96 to 31/12/97 to 31/12/96 ($'Million) ($'Million) Turnover: 30,647 31,567 Profit-Continuing Operations - Operating Profit: 2,066 3,406 - Exceptional Items: (347) 541 - Discontinued Operations: N/A N/A Total Operating Profit: 1,719 3,947 Share of Profit of Associated Companies: 306 363 Profit after Tax & MI: 1,694 3,809 % Change over Last Period: -55.5 % EPS-Basic: 49.5 cents 119.6 cents -Fully diluted: N/A N/A Extraordinary (ETD) Gain/(Loss): N/A N/A Profit after ETD Items: 1,694 3,809 Final Dividend per Share: 17.5 cents 41.5 cents (Specify if with other options): N/A N/A B/C Dates for Final Dividend: 5/5/98 to 13/5/98 bdi. Payable Date: 29/5/98 B/C Dates for (-) General Meeting: N/A Other Distribution for Current Period: N/A B/C Dates for Other Distribution: N/A (SEHK 12-Mar-1998) CATHAY PACIFIC: Profits Cut by 55% ---------------------------- Cathay Pacific, the Hong Kong-based airline, yesterday warned of a "very tough" 1998 as it announced net profits of HK$1.69bn (US$218m) for last year, a fall of 55 percent. The economic downturn in the region was just one of several factors behind the sharp fall in profits. Forest fires and haze in south-east Asia badly affected tourist travel, as did a "bird- flu" outbreak in Hong Kong. As a result, the annual average passenger load factor fell from 74 percent in 1996 to 68.2 percent. Net profits were also hit by an exceptional charge of HK$347m resulting from 760 redundancies that were announced in January this year. Excluding exceptional items, profits fell by 37.5 percent to HK$2.04bn. Reflecting the downturn, and the warning of further difficulties in 1998, the final dividend was cut from 41.5 cents to 17.5 cents, giving a total for the year of 29 cents, compared with 53 cents in 1996. (Financial Times 12-Mar-1998) MILLENNIUM GROUP LTD: Announces Results ---------------------------- This announcement is made at the request of The Stock Exchange of Hong Kong Limited to provide information of the recent financial position of Millennium Group Limited (the "Company", together with its subsidiaries the "Group") after the recent economic development in the Asian financial market to the shareholders of the Company. The board (the "Board") of directors (the "Directors") of the Company announce that due to the recent crisis in the financial markets in South East Asia, the performance of the Group's short-term marketable securities trading operation has been materially adversely affected by the stock market crash in Hong Kong. The Group is engaged principally in the manufacturing and distribution of chemicals and in the provision of transportation services predominantly in the PRC, as well as investment and financial activities in Hong Kong, including investments in listed stocks in Hong Kong. For the six months ended 30th June, 1997, the Company recorded unaudited profit attributable to shareholders of approximately HK$81.5 million. However, as a result of the stock market crash in Hong Kong during the fourth quarter of 1997, based on the unaudited consolidated management accounts for the eleven months ended 30th November 1997, the Group recorded a realised loss of approximately HK$75.6 million in its short- term marketable securities trading operation and a provision of HK$163.9 million for the diminution in value of its short-term marketable securities portfolio. Based on the preliminary discussion with the auditors, the Directors expect that the Group incurred substantial loss for the year ended 31st December 1997, subject to audit. The Directors expect that the audited results of the Group for the year ended 31st December, 1997 will be announced in late April to early May, 1998. In the meantime, shareholders and investors are advised to exercise caution when dealing in the securities of the Company. Save as disclosed above, the Directors are not aware of any material adverse changes in the financial or operational position of the Group since 31st December, 1996, the date to which the latest published audited accounts of the Group were made up. In view of the Group's current financial position, the Directors believe that the Group has sufficient working capital to meet its present requirement. By Order of the Board Shing Mei Fong Secretary Hong Kong, 10th March, 1998 ================= I N D O N E S I A ================= ASIA PULP & PAPER CO. LTD.: Placed on CreditWatch ----------------------------- Asia Pulp & Paper Co. Ltd. Corporate credit rating - Local currency B-/Watch Neg/-- B-/WatchDev/-- - Foreign currency B-/Watch Neg/-- B-/WatchDev/-- The ratings on the Indonesian corporates have been placed on CreditWatch with negative implications in conjunction with the downgrade of the foreign and local currency ratings of the Republic of Indonesia. The sovereign action reflects uncertainties over Indonesia's economic policies, which threaten to deepen further the acute systemic problems that characterize the nation's financial system. Resolution of the CreditWatch Negative in the next few months is dependent on a resolution of the CreditWatch on the Republic's foreign and local currency ratings. (Asia Pulse 12-Mar-1998) BARITO PACIFIC TIMBER (PT): Placed on CreditWatch ---------------------------- Barito Pacific Timber (PT) Corporate credit rating - Local currency B-/Watch Neg/-- B-/WatchDev/-- - Foreign currency B-/Watch Neg/-- B-/WatchDev/-- The ratings on the Indonesian corporates have been placed on CreditWatch with negative implications in conjunction with the downgrade of the foreign and local currency ratings of the Republic of Indonesia. The sovereign action reflects uncertainties over Indonesia's economic policies, which threaten to deepen further the acute systemic problems that characterize the nation's financial system. Resolution of the CreditWatch Negative in the next few months is dependent on a resolution of the CreditWatch on the Republic's foreign and local currency ratings. (Asia Pulse 12-Mar-1998) DAYA GUNA SAMUDERA (PT): Placed on CreditWatch ------------------------------ Daya Guna Samudera (PT) Corporate credit rating - Local currency B-/Watch Neg/-- B-/WatchDev/-- - Foreign currency B-/Watch Neg/-- B-/WatchDev/-- The ratings on the Indonesian corporates have been placed on CreditWatch with negative implications in conjunction with the downgrade of the foreign and local currency ratings of the Republic of Indonesia. The sovereign action reflects uncertainties over Indonesia's economic policies, which threaten to deepen further the acute systemic problems that characterize the nation's financial system. Resolution of the CreditWatch Negative in the next few months is dependent on a resolution of the CreditWatch on the Republic's foreign and local currency ratings. (Asia Pulse 12-Mar-1998) INDAH KIAT PULP: Placed on CreditWatch ----------------------------- Indah Kiat Pulp & Paper Corp. (PT) Corporate credit rating - Local currency B-/Watch Neg/-- B-/WatchDev/-- - Foreign currency B-/Watch Neg/-- B-/WatchDev/-- The ratings on the Indonesian corporates have been placed on CreditWatch with negative implications in conjunction with the downgrade of the foreign and local currency ratings of the Republic of Indonesia. The sovereign action reflects uncertainties over Indonesia's economic policies, which threaten to deepen further the acute systemic problems that characterize the nation's financial system. Resolution of the CreditWatch Negative in the next few months is dependent on a resolution of the CreditWatch on the Republic's foreign and local currency ratings. (Asia Pulse 12-Mar-1998) LONTAR PAPYRUS PULP: Placed on CreditWatch -------------------------- Lontar Papyrus Pulp & Paper Industry (PT) Corporate credit rating - Local currency B-/Watch Neg/-- B-/WatchDev/-- - Foreign currency B-/Watch Neg/-- B-/WatchDev/-- The ratings on the Indonesian corporates have been placed on CreditWatch with negative implications in conjunction with the downgrade of the foreign and local currency ratings of the Republic of Indonesia. The sovereign action reflects uncertainties over Indonesia's economic policies, which threaten to deepen further the acute systemic problems that characterize the nation's financial system. Resolution of the CreditWatch Negative in the next few months is dependent on a resolution of the CreditWatch on the Republic's foreign and local currency ratings. (Asia Pulse 12-Mar-1998) PABRIK KERTA: Placed on CreditWatch ------------------------------- Pabrik Kertas Tjiwi Kimia (PT) Corporate credit rating - Local currency B-/Watch Neg/-- B-/WatchDev/-- - Foreign currency B-/Watch Neg/-- B-/WatchDev/-- The ratings on the Indonesian corporates have been placed on CreditWatch with negative implications in conjunction with the downgrade of the foreign and local currency ratings of the Republic of Indonesia. The sovereign action reflects uncertainties over Indonesia's economic policies, which threaten to deepen further the acute systemic problems that characterize the nation's financial system. Resolution of the CreditWatch Negative in the next few months is dependent on a resolution of the CreditWatch on the Republic's foreign and local currency ratings. (Asia Pulse 12-Mar-1998) PINDO DELI PULP: Placed on CreditWatch ------------------------------ Pindo Deli Pulp & Paper Mills (PT) Corporate credit rating - Local currency B-/Watch Neg/-- B-/WatchDev/-- - Foreign currency B-/Watch Neg/-- B-/WatchDev/-- The ratings on the Indonesian corporates have been placed on CreditWatch with negative implications in conjunction with the downgrade of the foreign and local currency ratings of the Republic of Indonesia. The sovereign action reflects uncertainties over Indonesia's economic policies, which threaten to deepen further the acute systemic problems that characterize the nation's financial system. Resolution of the CreditWatch Negative in the next few months is dependent on a resolution of the CreditWatch on the Republic's foreign and local currency ratings. (Asia Pulse 12-Mar-1998) SATELIT PALAPA: Placed on CreditWatch -------------------------------- Satelit Palapa Indonesia (PT) Corporate credit rating - Local currency B-/Watch Neg/-- B-/WatchDev/-- - Foreign currency B-/Watch Neg/-- B-/WatchDev/-- The ratings on the Indonesian corporates have been placed on CreditWatch with negative implications in conjunction with the downgrade of the foreign and local currency ratings of the Republic of Indonesia. The sovereign action reflects uncertainties over Indonesia's economic policies, which threaten to deepen further the acute systemic problems that characterize the nation's financial system. Resolution of the CreditWatch Negative in the next few months is dependent on a resolution of the CreditWatch on the Republic's foreign and local currency ratings. (Asia Pulse 12-Mar-1998) ========= J A P A N ========= AOKI INTERNATIONAL: Debt Rating Cut ------------------------ Aoki International Co. (8214 JP ) fell 8 yen to 922. The senior unsecured debt rating of the men's apparel maker was cut to junk status by Moody's Investors Service, which said slow sales in the company's main menswear market would lead to lower profits. (Bloomberg Japan Equity Movers 12-Mar-1998) CHUO TRUST AND BANKING: Approval for Funds --------------------------------------------- Japan has approved rescue funding for four banks under a government scheme to prop up their weak capital, officials said Wednesday. The four are among major 21 banks applying to the panel for more than two trillion yen (16 billion dollars) in public funds. The Deposit Insurance Corp. (DIC), the nation's deposit safety net, approved requests by Dai-Ichi Kangyo Bank Ltd. (DKB) and Chuo Trust and Banking Co. Ltd. to raise 99 billion yen and 60 billion yen respectively, the officials said. DKB sought 99 billion yen through issuance of preference shares and Chuo Trust asked for 32 billion yen in preference shares and 28 billion yen in subordinated bonds. The 17 other banks are also expected to receive approval as early as Thursday, followed by a cabinet approval on Friday, the officials said. All the banks can ask for additional funds through March 31, 2001, the officials said. The request by the banks is based on the granting of public money under a government scheme to inject up to 30 trillion yen to restore trust in Japan's financial system. (Agence France-Presse 11-Mar-1998) DAI-ICHI KANGYO BANK LTD.: Approval for Funds --------------------------------------------- Japan has approved rescue funding for four banks under a government scheme to prop up their weak capital, officials said Wednesday. The four are among major 21 banks applying to the panel for more than two trillion yen (16 billion dollars) in public funds. The Deposit Insurance Corp. (DIC), the nation's deposit safety net, approved requests by Dai-Ichi Kangyo Bank Ltd. (DKB) and Chuo Trust and Banking Co. Ltd. to raise 99 billion yen and 60 billion yen respectively, the officials said. DKB sought 99 billion yen through issuance of preference shares and Chuo Trust asked for 32 billion yen in preference shares and 28 billion yen in subordinated bonds. The 17 other banks are also expected to receive approval as early as Thursday, followed by a cabinet approval on Friday, the officials said. All the banks can ask for additional funds through March 31, 2001, the officials said. The request by the banks is based on the granting of public money under a government scheme to inject up to 30 trillion yen to restore trust in Japan's financial system. (Agence France-Presse 11-Mar-1998) HITACHI CONSTRUCTION: Will Report Lower Profits ---------------------------- Hitachi Construction Machinery Co. (6305 JP ) fell 18 yen to 515. The Tokyo-based company is likely to report current, or pretax, profit of 5 billion yen ($38.7 million) for the year through March 1999, down 14 percent from its expected current profit for this year, the Nihon Keizai newspaper reported today, without citing sources. (Bloomberg Japan Equity Movers 12-Mar-1998) JAPAN FOUNDATION: Cuts Pretax Profits ------------------------- Japan Foundation Engineering Co. (1914 JP ) fell 10 yen to 1,000. The general contractor cut its pretax profit forecast 11.1 percent to 4 billion yen for the year ending March 31. That's 3.9 percent more than the most recent forecast by Toyo Keizai Inc., a financial information company. (Bloomberg Japan Equity Movers 12-Mar-1998) KAYABA INDUSTRY: Will Report Lower Profits ----------------------------- Kayaba Industry Co. (7242 JP ) was unchanged at 271 yen. The Japanese industrial machinery maker is likely to report a group net profit of 3.8 billion yen ($29.4 million) for the year ending March 31, down 32 percent on the year, the Nihon Keizai newspaper reported today, without citing a source. (Bloomberg Japan Equity Movers 12-Mar-1998) LONG-TERM CREDIT BANK LTD.: Approval for Funds --------------------------------------------- Japan has approved rescue funding for four banks under a government scheme to prop up their weak capital, officials said Wednesday. The four are among major 21 banks applying to the panel for more than two trillion yen (16 billion dollars) in public funds. For the Long-Term Credit Bank Ltd., the DIC's committee, which examines each case of application for public fund use, decided to buy only 46.6 billion yen of the bank's subordinated bonds despite its request for 70 billion yen. The 17 other banks are also expected to receive approval as early as Thursday, followed by a cabinet approval on Friday, the officials said. All the banks can ask for additional funds through March 31, 2001, the officials said. The request by the banks is based on the granting of public money under a government scheme to inject up to 30 trillion yen to restore trust in Japan's financial system. (Agence France-Presse 11-Mar-1998) MAZDA MOTOR: Downgraded to 'Below Average' ----------------------------- Mazda Motor Corp. (7261 JP ) fell 1 yen to 359. The automaker was downgraded to "below average" from "above average" by analysts Noriyuki Matsushima and Tsuyoshi Mochimaru at Nikko Research Center. (Bloomberg Japan Equity Movers 12-Mar-1998) MITSUBISHI MOTORS: Shares Fall on Losses --------------------------- Mitsubishi Motors Corp. (7211 JP ) fell 22 yen to 383. The automaker's shares plunged 13.8 percent yesterday after the company said it will post a group net loss of 110 billion yen for the year ending March 31, almost triple its earlier estimated loss. The company was also downgraded to "underperform" from "below average" by analysts Noriyuki Matsushima and Tsuyoshi Mochimaru at Nikko Research Center. (Bloomberg Japan Equity Movers 12-Mar-1998) NATIONAL HOUSE INDUSTRIAL: Shares Fall on Losses ------------------------------- National House Industrial Co. (1924 JP ) fell 120 yen to 1,070. The housing material maker cut its parent pretax profit forecast 38.8 percent to 10.1 billion yen for the year ending March 31. That's 36.9 percent less than the most recent forecast by Toyo Keizai. The company also cut its group pretax profit forecast 45.3 percent to 9.3 billion yen for same period. That's 41.9 percent less than the most recent forecast by Toyo Keizai. (Bloomberg Japan Equity Movers 12-Mar-1998) NIPPON CREDIT BANK LTD.: Approval for Funds --------------------------------------------- Japan has approved rescue funding for four banks under a government scheme to prop up their weak capital, officials said Wednesday. The four are among major 21 banks applying to the panel for more than two trillion yen (16 billion dollars) in public funds. But the widely-expected decision granted only a portion of the funds asked for by the Nippon Credit Bank Ltd. (NCB), one of the banks worst hit by its collapsing capital. NCB originally planned to raise 230 billion yen (1.9 billion dollars) via subordinated bonds, but the Deposit Insurance Corp. (DIC), the nation's deposit safety net, only approved 60 billion yen to be raised by preference shares, the officials said. The 17 other banks are also expected to receive approval as early as Thursday, followed by a cabinet approval on Friday, the officials said. All the banks can ask for additional funds through March 31, 2001, the officials said. The request by the banks is based on the granting of public money under a government scheme to inject up to 30 trillion yen to restore trust in Japan's financial system. (Agence France-Presse 11-Mar-1998) YAMAICHI SECURITIES: Japan Asia to Purchase ---------------------------- Japan Asia Investment Co Ltd (JAIC) said yesterday it would buy all of the outstanding shares of Yamaichi Asia Venture Capital, a Singapore-based member company of the failed Yamaichi Securities Co Ltd. JAIC said it would buy nine million shares of Yamaichi Asia Venture Capital from the Yamaichi group at a total cost of S$7.7 million. (Singapore BusinessTimes 12-Mar-1998) Yamaichi Asia Venture Capital was founded in 1994 and capitalized at 9 million Singapore dollars to invest in businesses and conduct M&A operations, mainly in Southeast Asia. The company was previously owned 50% by Yamaichi Finance Co., and 25% each by Yamaichi Securities Co. and Yamaichi Merchantbank (Singapore) Ltd. YAVC will be renamed JAIC Asia Capital Ltd. and continue operations with its current staff of eight, the officials said. (Asia Pulse 12-Mar-1998) ========= K O R E A ========= HANBO STEEL: Final Debt Obligations Tallied -------------------------- South Korea's failed Hanbo Steel's final debt obligations totalled Won7.92trn ($5.2bn). A company official said the amount included principal debt of Won6.09trn, interest payments of Won1.83trn and other expenses. The company reported its debt total in a court filing. Hanbo, the nation's second biggest steelmaker, was declared insolvent in January under debts that at the time totalled Won6trn. The company is still operating but is under court receivership and seeks a third party to take it over. (Lloyd's List International 18-Feb-1998) HITACHI CONSTRUCTION: Anticipates Lower Profits -------------------------- Hitachi Construction Machinery Co. anticipates pretax profit of 5 billion yen in the year through March 1999, down 14% from its estimate of profit in the current fiscal year, company officials said. The decline reflects primarily weaker sales of its mainline hydraulic shovels on both domestic and overseas markets. With cost-cutting efforts failing to offset lower revenues, fiscal 1998 is likely to be the firm's second straight year of lower profit, they added. The Hitachi Ltd. subsidiary sees sales in the upcoming term falling 4% to 260 billion yen, eroded by a 10% fall in sales of hydraulic shovels to 13,100. (Asia Pulse 12-Mar-1998) KIA MOTORS: Anxiously Watching Ford/Samsung Deal ----------------------------- South Korea's auto firms are anxiously watching the next moves by the Ford-Samsung Motors alliance, which they fear will have a considerable impact on their operations. Especially keen is Kia Motors, which has Ford as its majority shareholder. The company has been pursuing a cooperative arrangement with Ford in such areas as parts, technology, products and capital. Kia has been trying to uncover the extent of the report's truth, especially the impact on its relations with Ford. Kia, in particular, has been displeased at the news since the Ford-Samsung alliance could be aimed at taking over Kia, and its management has been studying various countermeasures. A Kia executive said, "We at Kia don't see why Samsung is trying to butt in as we have been trying to forge a cooperative arrangement with Ford in a number of key areas including capital, and joint marketing with Ford for its B-3 model, a follow-up model to the compact car Avella." (Asia Pulse 12-Mar-1998) SAMSUNG MOTORS: Ford Denies Deal -------------------------- An executive of Ford Motor Co. denied Samsung Motor's announcement that the two had agreed to manufacture Ford's World Cars in the latter's plant in Pusan, sources at Kia Motors said Thursday. A Kia spokemsan said Paul Dranco, who is in charge of Asia-Pacific affairs at Ford, faxed a letter to Kia President Park Jae-hyuk, clarifying that it was true Samsung and Ford have been engaged in negotiations, but they are yet to reach a conclusion on anything. Ford is presently the largest shareholder of Kia. The reports regarding the Ford-Samsung agreement are incorrect and premature, Dranco said in his letter, stressing that the reports were unilaterally made by Samsung. Samsung, meanwhile, blamed the press for reporting as if details of negotiations (between Samsung and Ford) were contents of an actual agreement. (Asia Pulse 12-Mar-1998) =============== M A L A Y S I A =============== MALAYSIA MINING: Unaware of PNB Proposal ------------------------------ Malaysia Mining Corporation Bhd (MMC) said it has not been informed of a proposal for the disposal of its shares by Permodalan Nasional Bhd (PNB), a government-owned investment fund, to diversified KUB Bhd. "To date our substantial shareholder, PNB, has not officially advised us of any such proposal," the company said Wednesday. MMC was replying to a query by the Kuala Lumpur Stock Exchange (KLSE) concerning a report saying that KUB was negotiating with the government for a stake in MMC. "The company is seeking more information from PNB," added the statement. PNB was said to own more than 50 percent interest in MMC. Quoting government officials and bankers, the report said KUB would acquire a 30 percent interest in MMC on "favourable term" to compensate for losses KUB might incur as a result of Sime Bank Bhd's rescue. The rescue involves the disposal of Sime Bank, minus its subsidiaries to financial house, Rashid Hussain Bhd for RM852 million (US$221.3 million) (US$1:RM3.85). KUB owns 30.1 percent stake in ailing Sime Bank while conglomerate Sime Darby Bhd held 60.35 percent. (Asia Pulse 12-Mar-1998) SIME BANK: Details of KUB Malaysia Deal ------------------------------- Rashid Hussain Bhd's acquisition of Sime Darby Bhd's 60.35 per cent stake and KUB Malaysia Bhd's 30 per cent stake in Sime Bank Bhd will be carried out via the issue of new RHB Holdings Bhd shares at 2.50 Malaysian ringgit each, Sime Darby said in a statement to the Kuala Lumpur Stock Exchange. Sime Darby said RHB Holdings is a company to be created for RHB Sakura Merchant Bankers Bhd under a scheme of arrangement. RHB Bank will acquire 451.796 million shares or a 90.36 per cent stake in Sime Bank for RM770 million (S$321.5 million), it added. (Singapore BusinessTimes 12-Mar-1998) SIME DARBY: Expects RM246m Loss from Sime Bank ------------------------------- Sime Darby Group expects to book a RM246 million (US$64 million) (US$1:RM3.85) loss from the proposed disposal of its 60.35 percent stake in financially troubled Sime Bank Bhd if the sale is completed by June 30 this year. Amanah Merchant Bank said in a statement, issued on behalf of Sime Darby, that based on the unaudited consolidated net tangible assets of Sime Darby as at Dec 31, 1997, the proposed disposal would result in the reduction of Sime Darby's net tangible asset value per share to RM2.33 from RM2.43 per share. Sime Darby has proposed to sell its stake in Sime Bank held by Sime Darby Financial Services Holdings Sdn Bhd (SDFS) to RHB Bank Bhd. At the same time, KUB Malaysia Bhd will also sell its 30.01 percent share in Sime Bank to RHB Bank. Amanah Merchant Bank said the proposed disposal would enable the Sime Darby Group to reduce its exposure in the banking industry and would ensure the full repayment of the subordinated loans extended by SDFS to the Sime Bank amounting to RM450 million. The disposal would also enable Sime Darby to have an investment in RHB Holdings, which would control the second largest commercial bank in the country. On Tuesday, Sime Darby through SDFS entered into an agreement with RHB Bank Bhd, Rashid Hussain Berhad and KUB Malaysia for the disposal of the stake. SDFS's holding of 301,753,355 ordinary shares of RM1.00 in Sime Bank will be sold to RHB Bank. The sale would be satisfied by the issuance of new ordinary shares of RM1.00 each at an issue price of RM2.50 per share in RHB Holdings Bhd. Under the main terms of the agreement, RHB Bank would acquire an aggregate of 451,796,455 Sime Bank ordinary shares representing about 90.36 percent of its issued and paid-up share capital from SDFS and KUB for RM770 million. The purchase consideration was based on the adjusted net tangible asset value of the Sime Bank Group of RM852.24 million. Under the terms, RHB Bank would undertake to repay SDFS the RM450 million worth of subordinated advances made to Sime Bank and its subsidiaries within three months from the date of the sale of shares agreement. (Asia Pulse 12-Mar-1998) ===================== P H I L I P P I N E S ===================== DUTY FREE FIRST: Granted Relief from Creditors ---------------------------- Duty Free First Superstore, Inc. (DFFSI) has been granted by the Securities and Exchange Commission (SEC) a 30-day relief from its creditors. The SEC ruled that "all actions, claims and proceedings against ... (the firm) pending before any court, tribunal, office, board, body and/or commission, are deemed suspended within a period of 30 days until otherwise ordered by the commission." The company's total obligations amount to 335 million Philippine pesos (PhP). Within the 30-day period, the SEC will schedule hearings on the case to determine whether it will grant the firm a permanent suspension of payments and appoint a rehabilitation committee to oversee the firm's operations. The SEC set the hearing for the DFFSI's proposed rehabilitation plan on March 25. DFFSI filed a petition before the SEC seeking the suspension of its debt payment after it found itself in a financial bind. DFFSI's duty-free store is located in a 7,500-square meter property inside the Clark special economic zone in Pampanga. (BusinessWorld 12-Mar-1998) NEC PHILIPPINES: More Retrenchment in Store -------------------------- NEC Phils., Inc., one of the country's major importers of computer and telecommunication products, has implemented the second wave of its retrenchment program to survive continuous losses mainly due to the ongoing economic crisis. In a letter to the Department of Labor and Employment, Cary Paras, assistant manager for human resources, said the firm had to undergo another series of organizational changes to sustain heavy losses "brought about by the negative effect of the declining (Philippine) peso (PhP)." During its initial retrenchment, the company had laid off 10 people from its technical, sales and administrative departments. This time, the firm is letting go of a total of 16 employees from various departments and whose terminations will all take effect next month. (BusinessWorld 12-Mar-1998) ================= S I N G A P O R E ================= =============== T H A I L A N D =============== ALPHATEC: May Test New Bankruptcy Laws --------------------------- Alphatec Electronics may be the first Thai business to use new bankruptcy laws if creditors fail to agree to a restructuring plan, according to chairman Thamnu Wanglee. Last month a bitter row erupted over which auditors to appoint, in what was in effect a dispute over how much financial punishment shareholders should shoulder. In July, Alphatec was discovered to have recorded phantom profits of 10 billion baht (about HK$1.76 billion) and to have transferred four billion baht outside the firm without the board's approval. The company's main creditors are trying to implement a restructuring plan to deal with US$330 million debts. The Stock Exchange of Thailand has given Alphatec until next month to find new auditors, although Mr Thamnu said he had asked for this to be extended to May. The new bankruptcy law will allow debt-crippled firms to work their way out of trouble. But creditors to the firm argue that their scheme - which is understood to involve debt-for-equity swaps and virtually zero write-downs for shareholders - is the only viable option. Analysts said the longer the restructuring plan dragged on, the more difficult it would be for Alphatec to maintain its chip-making business. (South China Morning Post 12-Mar-1998) THAI DURABLE TEXTILE: Tries to Avoid Delisting ---------------------------- Thai Durable Textile Plc complied with Notification Clause 30/4 specified by the SET in order to eliminate causes leading to delisting as follows: 1. To appoint financial adviser in conjunction with the company to compile the restructuring plan which will be propose to shareholders meeting by Jul 2, 1998. 2. The company and financial adviser (stated in 1) will hold a presentation at least 7 days ahead of shareholders meeting. 3. The company and financial adviser will report on progress of the plan once every 3 months. (SET 12-Mar-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 * * *