/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/980325.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 Wednesday, March 25, 1998, Vol. 1, No. 26 Headlines C H I N A & H O N G K O N G CATHAY PACIFIC: More Layoffs CHINA EVERBRIGHT: Looking for Outside Funding Sources CLIMAX INTERNATIONAL: Asking Banks to Reschedule Debts HWA KAY: Negotiations with Banks & Investors Continue LEADING SPIRIT: Considering $300 Million Placement LEADING SPIRIT: SFC Commences Enquiry into Stock Trading PEREGRINE INVESTMENTS: Price Waterhouse Defends its Role YAOHAN: Reports Losses up to $1.36b I N D O N E S I A J A P A N ASAKAWAGUMI CO.: Financial Overview CO-OP CHEMICAL: Financial Overview DAIHATSU MOTOR: Shares Down on Thai Closing FUJI BANK: Moody's Assigns Baa2 Debt Rating ISETAN CO.: Moody's Assigns Ba3 Debt Rating MITSUBISHI HEAVY: Plans New Issue MITSUBISHI MATERIALS: Moody's Assigns Baa2 Debt Rating MITSUI TRUST & BANKING: Shares Down on Lower Rating MEIDENSHA CORP.: Shares Down NIKKO SECURITIES: Moody's Assigns Baa1 Debt Rating NTN CORPORATION: Moody's Assigns Baa2 Debt Rating SEKISUI HOUSE: Moody's Assigns Baa1 Debt Rating SUMITOMO CHEMICAL: Moody's Assigns Baa1 Debt Rating SUMITOMO OSAKA: Moody's Assigns Ba2 Debt Rating TOSTEM CORP.: Curtails Earnings Forecast YAKULT HONSHA: Shares Not Traded YASUDA TRUST & BANKING: Shares Lower on Lower Rating K O R E A HALLA PULP & PAPER: To Finalize Negotiations with Bowater HANBO STEEL: Possible Takeover by U.S. Steel and POSCO HANSOL CORP.: Emerging from Bankruptcy KIA MOTORS: Hyundai Confident of Kia Takeover M A L A Y S I A HALIM SECURITIES: Takeover by KLSE SIME BANK: Suitors Given Deadline on Details SIME BANK: To Publish Full Financial Statement P H I L I P P I N E S TALSAN ENTERPRISES: SEC Dismisses Petition for Relief S I N G A P O R E PARKWAY HOLDINGS: Reports Sharply Lower Profits T H A I L A N D TONGKAH HARBOUR: Taps Financial Professionals QUALITY HOUSE: Recapitalization Plan on Track C H I N A & H O N G K O N G CATHAY PACIFIC: More Layoffs ---------------------------- Cathay Pacific Airways yesterday said it was laying off 130 staff in its technical stores department to cut costs, raising to 870 the number of employees fired so far this year. The airline said the work of the technical stores department, which stores and distributes aircraft parts, would be taken on by Hong Kong Aircraft Engineering Co, Cathay earlier this month revealed that profit slumped 55.5 per cent last year to $1.69 billion (TCRAP 13-Mar-1998). The results were hurt further by an exceptional loss of $374 million relating to the severance payments to staff made redundant in January. A number of industry analysts have predicted that Cathay will lose money this year, the first time since its 1986 listing on the stock market. (South China Morning Post 24-Mar-1998) CHINA EVERBRIGHT: Looking for Outside Funding Sources ----------------------------------------------------- China Everbright Limited, noting unusual increases in the price and trading volume of the shares of the Company, reminded shareholders that, as stated in the Company's announcement dated 11th February 1998, "as an ongoing and prudent measure, the Company is always reviewing its financial position and exploring possible equity and debt financing to fund its ongoing or possible future investments. Such exploration, which may or may not lead to a binding agreement, has not resulted into any binding commitment on the part of the Company," as of yesterday afternoon. China Everbright has been involved in negotiations in relation to a Project which may involve the Company investing in the development, construction and operation of a bridge and toll road in Fuzhou. Substantial progress in the negotiation has since been made and the Company has entered into a non-legally binding letter of intent and a non-legally binding memorandum of understanding setting out the possible terms of the Company's investment in the Project. However, as of yesterday, no binding commitment has been made. Based on current estimates, the total investment required of the Project is expected to be approximately RMB1,410,000,000 but the extent of the Company's participation has not yet been finalised as it is possible that other co-investor(s) may also be involved. In the event that the Company decides to participate in 80% or more of the Project, it may amount to a possible major transaction of the Company. The Company is still conducting due diligence on the Project which is also still pending compliance with certain regulatory requirements in the People's Republic of China. The Company is still considering various means of financing the Project which may include debt or equity financing or both. (SEHK 24- Mar-1998) CLIMAX INTERNATIONAL: Asking Banks to Reschedule Debts ------------------------------------------------------ In a brief written statement, Climax International Company Limited announced yesterday that it has entered into discussions with its bankers with a view to rescheduling its indebtedness. (SEHK 24-Mar-1998) HWA KAY: Negotiations with Banks & Investors Continue ----------------------------------------------------- Responding to newspaper articles in several newspapers on 21st March, 1998 speculating on whether RJP Electronics Limited might acquire control of Hwa Kay Thai Holdings Limited, Hwa Kay's Board said that while one of its directors had very preliminary discussions with a representative of RJP no specific terms were discussed and the approach did not lead to any written proposal. As previously announced including on 14th February, 1998, the Board is continuing in its discussions with numerous parties (including the Company's bankers and a major business partner) and has had and is having discussions with several potential investors. Trading in the shares and warrants of the Company was suspended at 12:30 p.m. on 14th January, 1998. The shares and warrants will remain suspended pending the finalization of the financial restructuring plan. The Board indicated yesterday that it will keep shareholders and investors apprised of relevant information as and when appropriate consistent with the obligations under the Listing Rules of the Stock Exchange. "The Company has initiated discussions with Hwa Kay Thai but these are at a very early stage and no terms at all have been agreed. There is no certainty that any transaction will result," RJP added in a written statement yesterday. (SEHK 24-Mar-1998) LEADING SPIRIT: Considering $300 Million Placement -------------------------------------------------- Cash-strapped Leading Spirit (Holdings) is considering a $300 million placement by subsidiary, Leading Spirit Conrowa Electrics (LS Conrowa), as part of an ongoing restructuring of its finances. The Securities and Futures Commission suspended trading in LS Conrowa on November 21 last year after it discovered only 4.25 per cent of the issued share capital was held by the public while 19.08 per cent was held by a group of connected traders. It is understood the placement would increase the company's free float and help alleviate Leading Spirit's $1.2 billion debt. Brokers said Leading Spirit planned to sell about 700 million LS Conrowa shares - or about 10 per cent of its 75 per cent stake - at 40 cents each to retail investors. The commission alleged LS Conrowa shares were concentrated in the hands of certain connected traders, which caused the share price to rise from its $1 issue price last June to $1.64 before the suspension. The commission's probe into LS Conrowa shares continues. This effectively valued the share at $9.84 after taking into account a five-for-one bonus issue on September 22 last year. Meanwhile, Leading Spirit's creditor banks said the company would soon conclude a share placement to a mainland investor. The placement would see the company issuing new shares and chairman Wong Shi-ling selling part of his stake to the unnamed investor for about $150 million, they said. (South China Morning Post 24-Mar-1998) LEADING SPIRIT: SFC Commences Enquiry into Stock Trading -------------------------------------------------------- The Securities and Futures Commission ordered a temporary suspension in the trading of shares in Leading Spirit Conrowa Electric Company Limited due to enquiry into unusual trading movement. The SFC has requested clarification of the Company's financial position before it will approve a resumption in trading. (SEHK 24-Mar-1998) PEREGRINE INVESTMENTS: Price Waterhouse Defends its Role -------------------------------------------------------- Price Waterhouse has defended its role in the sale of Peregrine Investments Holdings' controlling stake in Kwong Sang Hong International, claiming it was carried out in a "careful and controlled manner" (TCRAP 23-Mar-1998). The international accountancy firm - which is acting as the provisional liquidator of the failed investment bank - was reacting to a report in Sunday Money in which merchant bankers claimed the sale of the property company was carried out carelessly and to the detriment of creditors. The report claimed Peregrine's 70.61 per cent sale in Kwong Sang Hong had been sold to Power Jade at a significant discount to the firm's tangible net asset value of $5 per share, as determined by an independent valuation late last year. Power Jade, a company jointly owned by Chinese Estates Holdings and Anita Shum, bought the shares at $1.70 each. Price Waterhouse said in a statement signed by one of the provisional liquidators, David Hague, that at the time of the appointment of the provisional liquidators on January 13 "there was considerable concern about the prospects for the Hong Kong property market as a whole". It said the net asset value of Kwong Sang Hong was not a relevant benchmark for determining the sale price, since the provisional liquidators were not in a position to force a liquidation of the company. "The market price of the shares was therefore a much more realistic guide to the value of the interest," it said. Kwong Sang Hong's shares traded at between $1.63 and $1.95 from the time the liquidators were appointed to the date of the sale. Price Waterhouse also denied the sale had been unauctioned. The company had been properly shown to the market, it said. "More than 12 parties expressed an interest in the possibility of acquiring Peregrine's holding. Five parties made offers for the shares," it said. "All the offers made were at prices close to that finally obtained." Meanwhile, Price Waterhouse said it would organise creditors' meetings "as soon as possible" with respect to Peregrine Investments Holdings and its fixed income and derivatives subsidiaries. Mr Hague said it was not practical at this stage to estimate the likely dividend that ultimately would be paid to creditors of the firms. (South China Morning Post 24-Mar-1998) YAOHAN: Reports Losses up to $1.36b ----------------------------------- Yaohan International Holdings, whose retailing arm is in liquidation, has reported a $1.36 billion attributable loss for the six months to September, up sharply from a $91 million loss in the previous corresponding period. The decline was attributable primarily to a $1.16 billion exceptional loss, including a $699 provision on doubtful debts, losses from value of trademarks, goodwill, pre- operating expenses and investment in an associate company. The loss was incurred before the liquidation of the company's 42 per cent owned retailing arm Yaohan Hongkong Corp last month, three months after core business Yaohan Department Stores (HK) was wound up with about $1.1 billion in liabilities. Yaohan Hongkong is also troubled by $91.5 million in outstanding debts. During the first half, turnover plummeted 75 per cent to $332 million, while operating losses rose to $189 million from $15.28 million. Losses per share soared to $1.377 from 9.3 cents. No interim dividend was proposed. Yaohan International last month reshuffled its board, with mainland-backed minority shareholders such as Citic Australia and China Venturetech Investment Corp taking the helm. (TCRAP 24-Mar-1998) Yaohan International is 19.867% held by property developer Pacific Concord Holdings, 19.868% by Japanese businessman Kazuo Wada and his brothers, 7.5% by Citic Australia and 3.6% by China Venturetech. (South China Morning Post 24-Mar-1998) I N D O N E S I A J A P A N ASAKAWAGUMI CO.: Financial Overview ----------------------------------- Asakawagumi 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 52,928,585 50,993,198 0 Operating Income -1,250,142 2,435,067 0 Net Income -7,240,313 -603,861 0 Current Assets 6,376,232 79,794,670 0 Current Liabilities 61,162,586 63,840,339 0 Working Capital 54,786,354 15,954,331 0 Total Assets 78,154,314 87,312,366 0 Total Liabilities 74,482,012 76,326,133 0 Shareholder Equity 3,672,302 10,986,233 0 CO-OP CHEMICAL: Financial Overview ---------------------------------- Co-Op Chemical 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-1998 31-Mar-1997 31-Mar-1996 ----------- ----------- ----------- Total Revenues 0 27,022,516 27,712,995 Operating Income 0 5,595,394 6,177,174 Net Income 0 -163,856 -28,719 Current Assets 0 12,637,084 14,870,925 Current Liabilities 0 18,780,870 20,714,928 Working Capital 0 -6,143,786 -5,844,003 Total Assets 0 29,349,520 32,415,938 Total Liabilities 0 24,669,783 27,571,532 Shareholder Equity 0 4,679,737 4,844,406 DAIHATSU MOTOR: Shares Down on Thai Closing ------------------------------------------- Daihatsu Motor Co. (7262 JP ) rose 5 yen to 470. The company will become the first Japanese automaker to end production and sales in Thailand because of that nation's economic problems, Jiji Press reported. Daihatsu will set up a new company next month to provide after-sales service and parts to existing owners, the report said. (Bloomberg Japan Equity Movers 24-Mar-1998) FUJI BANK: Moody's Assigns Baa2 Debt Rating ------------------------------------------- Moody's Investors Service assigned its Baa2 rating to US$ 100,000,000 of Perpetual Guaranteed Subordinated Floating Rate Eurobonds, Series 78, of Fuji Finance (Cayman) Ltd. issued by Fuji Bank, Ltd. Bonds rated as Baa by Moody's are considered as 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. ISETAN CO.: Moody's Assigns Ba3 Debt Rating ------------------------------------------- Moody's Investors Service assigned its Ba3 rating to Yen 10,000,000,000 of 2.65% Series 4 Japan Bonds due 2002 issued by Isetan Co., Ltd. Bonds which are rated Ba by Moody's are 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 with Moody's Ba rating. MITSUBISHI HEAVY: Plans New Issue --------------------------------- Mitsubishi Heavy Industries Ltd. plans to issue roughly 100 billion yen of straight corporate bonds within fiscal 1998 in order to refinance short-term bank loans taken out last December, say company officials. Mitsubishi Heavy is suffering a cash squeeze due to worsening terms for payment on plant construction, and as a result it increased combined long- and short-term borrowing by 280 billion yen beginning last November. Of the that amount 150 billion yen came from short-term loans coming due at the end of this year. With Japanese financial institutions clamping down on new lending Mitsubishi Heavy plans to increasingly turn to direct financing, according to an official. After its banks demanded higher interest on some of its borrowing, triple-A rated Mitsubishi Heavy floated 100 billion yen of bonds on March 11. (Asia Pulse 24-Mar-1998) MITSUBISHI MATERIALS: Moody's Assigns Baa2 Debt Rating ------------------------------------------------------ Moody's Investors Service assigned its Baa2 rating to Yen 10,000,000,000 of 2.425% Series 9 Japan Bonds due 2003 issued by Mitsubishi Materials Corp. Bonds rated as Baa by Moody's are considered as 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. Additionally, Moody's assigned its Baa2 rating to Yen 10,000,000,000 of 3.10% Series 10 Japan Bonds due 2008 issued by Mitsubishi Materials. Bonds rated as Baa by Moody's are considered as 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. MITSUI TRUST & BANKING: Shares Down on Lower Rating --------------------------------------------------- Mitsui Trust & Banking Co. (8401 JP ) fell 11 yen to 370. The trust bank's senior debt rating was cut to `Baa3' by Moody's Investors Service. The credit rating agency cited the flagging economy, which may compound the bank's already weak financial fundamentals, as a reason for downgrade. (Bloomberg Japan Equity Movers 24-Mar-1998) MEIDENSHA CORP.: Shares Down ---------------------------- Meidensha Corp. (6508 JP ) fell 17 yen to 396. The electric machinery maker reversed its previous forecast to a pretax loss of 1 billion yen for the year ending in March. That's 200.0 percent less than the most recent forecast by Toyo Keizai. (Bloomberg Japan Equity Movers 24-Mar-1998) NIKKO SECURITIES: Moody's Assigns Baa1 Debt Rating -------------------------------------------------- Moody's Investors Service assigned its Baa1 rating to US$ 2,400,000,000 of Senior Unsecured Debt issued by Nikko Securities Co., Ltd. (The). Bonds rated as Baa by Moody's are considered as 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. NTN CORPORATION: Moody's Assigns Baa2 Debt Rating ------------------------------------------------- Moody's Investors Service assigned its Baa2 rating to Yen 40,000,000,000 of Debt Securities due 2000 issued by NTN Corporation. Bonds rated as Baa by Moody's are considered as 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. SEKISUI HOUSE: Moody's Assigns Baa1 Debt Rating ----------------------------------------------- Moody's Investors Service assigned its Baa1 rating to Yen 10,000,000,000 of 2.40% Series 8 Japan Bonds due 2005 issued by Sekisui House, Ltd. Bonds rated as Baa by Moody's are considered as 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. SUMITOMO CHEMICAL: Moody's Assigns Baa1 Debt Rating --------------------------------------------------- Moody's Investors Service assigned its Baa1 rating to Yen 10,000,000,000 of Fixed/Floating Rate Euro Medium Term Noted, Series 39, due 2005 of Sumitomo Chemical (U.K.) plc. issued by Sumitomo Chemical Co., Ltd. Bonds rated as Baa by Moody's are considered as 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. SUMITOMO OSAKA: Moody's Assigns Ba2 Debt Rating ----------------------------------------------- Moody's Investors Service assigned its Ba2 rating to Yen 5,000,000,000 of 2.55% Series 3 Japan Bonds due 2001 issued by Sumitomo Osaka Cement Co., Ltd. Bonds which are rated Ba by Moody's are 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 with Moody's Ba rating. TOSTEM CORP.: Curtails Earnings Forecast ---------------------------------------- Tostem Corp. has curtailed its earnings forecast for the year ending March 31, projecting a net loss of 8 billion yen. The leading maker of aluminum building materials, which posted a net profit of 18.8 billion yen the previous year, attributed the reversal largely to a 10 billion-yen charge against lending to a Hong Kong subsidiary as well as erosion of margins due to increased competition. Tostem expects to regain net earnings next fiscal year, reckoning that pretax profit will improve to 20 billion yen from an estimated 10 billion yen this year. But the road to recovery seems like anything but smooth amid a persistent slump in housing starts. Tostem projects 565 billion yen in sales for the year through this March, down 11% from the year before. The estimate represents a second downward revision this fiscal year, following one announced at the same time as results for the year's first half. The first revision reflected an anticipated drop in housing starts to around 1.3 million units from 1.63 million the previous year. Based on the pace of second-half sales, management now puts annual housing starts at the lower half of the 1.2 million range. Product by product, sales are estimated to dip 13% for housing sashes, 11% for building sashes and 6% for housing equipment such as kitchen and bathroom systems. The setback in high-margin housing equipment is proving particularly hurtful to earnings, leading Tostem to project a drop of 6 billion yen in gross profit. The firm also estimates the negative effect on profits of intensified competition in a shrunken market at 3 billion yen. The latest cut in earnings forecast sent the Tostem stock spiraling down, with its downside still tested amid the cloudy business environment. To meet the target of 20 billion yen in fiscal 1998 pretax profit, the company will have to shave more than that amount off its expenses, one analyst said. (Asia Pulse 24-Mar-1998) YAKULT HONSHA: Shares Not Traded -------------------------------- Yakult Honsha Co. (2267 JP) fell 46 yen to 574 yen. The drink maker's shares were untraded for two days as sell offers exceeded buy bids. Yakult said Friday it would book a charge of 105.7 billion yen for the year to March 31 for investment losses, primarily involving derivatives. Tsutomu Matsuno, an analyst at Daiwa Institute of Research Ltd., said a price of around 500 yen is fair value for Yakult's shares in view of the new information. (Bloomberg Japan Equity Movers 24-Mar-1998) YASUDA TRUST & BANKING: Shares Lower on Lower Rating ---------------------------------------------------- Yasuda Trust & Banking Co. (8404 JP ) fell 11 yen to 225. The trust bank's senior debt rating was cut to `Ba1' by Moody's Investors Service. The credit rating agency cited the flagging economy, which may compound the bank's already weak financial fundamentals, as a reason for downgrade. The bank's financial fundamentals are among the weakest of Japanese banks, it said. (Bloomberg Japan Equity Movers 24-Mar-1998) K O R E A HALLA PULP & PAPER: To Finalize Negotiations with Bowater --------------------------------------------------------- South Korea's Halla Pulp & Paper Co. said Tuesday that the insolvent company will finalize negotiations with Bowater Inc. of the United States over stake sales by the end of this month. "We are close to winding up negotiations with Bowater that started since early this year. We will be able to notify the court of the results by late this month," a company spokesman said. Halla Pulp & Paper has applied for court protection for debt rescheduling on Dec. 6, after the insolvency of its parent group Halla. "We will be able to convert ourselves into a competitive company once we lure equity investment from the largest U.S. newsprint producer, Bowater," the spokesman said. Halla Pulp had trouble acquiring raw material since defaulting on debts but has been operating at 95 percent capacity since this month. The paper manufacturer expects to see its exports grow by 54.5 percent to 170 billion won (US$116.6 million) this year, thanks to brisk exports to Japan, India, and Egypt, the spokesman added. (Asia Pulse 24-Mar-1998) HANBO STEEL: Possible Takeover by U.S. Steel and POSCO ------------------------------------------------------ A giant U.S. steelmaker proposed the take-over of bankrupt Hanbo Steel together with another South Korean firm, and is receiving positive signals, the Seoul Economic Daily reported Tuesday. The paper quoted a high-level ruling party source as saying U.S. Steel, the largest steel company in the United States, sent a letter to Pohang Iron and Steel Co. (POSCO) showing interest in a joint takeover of Hanbo. A POSCO official acknowledged the proposal and said it was under positive review, adding that no decision has yet been made. Another official said the U.S. company was interested in Hanbo's "A" district but may buy the entire Tangjin steel mill depending on results of negotiations with creditor banks, the paper reported. Park Tae-joon, president of United Liberal Democrats and founder of POSCO, indicated last week after meeting with President Kim Dae-jung that the government hopes to liquidate insolvent corporations, including Hanbo, soon via international bidding. POSCO and U.S. Steel have already been engaged in successful joint ventures since 1986. (Asia Pulse 24-Mar-1998) HANSOL CORP.: Emerging from Bankruptcy -------------------------------------- South Korea's Hansol Corp. has finally seen profits following its four-year managerial hardships since it went broke in 1994, a Hansol spokesman said Monday. The newsprint exporter, which departed from court receivership last month, posted a net profit of 2.5 billion won on sales of 390 billion won for 1997, up 263 percent from the previous year. The Korean firm plans to boost sales to 1.2 trillion won this year by diversifying export markets and implementing managerial reform. (Asia Pulse 24-Mar-1998) KIA MOTORS: Hyundai Confident of Kia Takeover --------------------------------------------- South Korea's Kia Motors Corp. on Monday declared war against any takeover bid as the giant Hyundai Group vowed to push ahead with its ambitious plan to take over the embattled car firm. "We are confident our takeover plan will succeed. We hope to start negotiations with Kia's creditors soon," a Hyundai spokesman told AFP. Hyundai also invoked patriotism, warning that South Korea's auto industry would collapse if a foreign firm took over Kia. But Kia Motors, the country's fourth largest car maker which has been struggling to survive, hit back, pledging "an all-out fight against any improper decisions regarding our fate." Kia blasted Hyundai and other industrial giants as "hyenas," urging the government to solve Kia's problem in a "fair and transparent manner." But Kia's voice was not strong enough to silence widespread support from economists, creditors and even a rival auto-making conglomerate, the Daewoo Group. The stock market, too, liked the plan, and Kia Motor closed limit-up 750 at 7,080 won and Hyundai Motor closed up 100 at 23,800 won. Hyundai Motor estimated its official stake in Kia at six percent but newspapers said its subsidiaries had acquired a 20 percent stake. Analysts said Hyundai could be the best choice for Kia, saying both the government and Kia's creditors appeared to be supporting Hyundai. The United States' Ford Motor Co., Kia's largest foreign shareholder, was the largest potential block to Hyundai's move but analysts said it would remain neutral. "I don't think Ford, which has not reached a solid agreement with Samsung Motors, would put a brake on Hyundai's bid," said Ssangyong Investment and Securities' Shon Jong-Won. (Agence France-Presse 23-Mar-1998) M A L A Y S I A HALIM SECURITIES: Takeover by KLSE ---------------------------------- The Kuala Lumpur Stock Exchange (KLSE) is taking control from Tuesday of the operations of Halim Securities Sdn Bhd, an 80-percent subsidiary of Uniphoenix Corporation Bhd, following the former's failure to meet payment obligations to the exchange's clearing house, the exchange's executive chairman Mohd Azlan Hashim announced Monday. He said Halim Securities had breached the conditions under the trading restrictions resulting in its failure to meet its obligation to the clearing house, Securities Clearing Automated Network Services Sdn Bhd (SCANS). Azlan told a news conference here that Halim Securities has an outstanding payment of less than RM10 million (US$2.77 million) to the clearing house. After consultations with the Securities Commission (SC), he explained, the exchange decided to take charge of Halim Securities for purposes of enforcing various measures relating to dealing in securities by the company pursuant to the KLSE's powers under Rule 15B (1)(A) of its rules relating to member companies. Azlan said investing clients of Halim Securities can still trade through the securities company despite the exchange taking control over its operations. "While the exchange is in control of Halim Securities, trading operations at the company will continue subject to the conditions of the restrictions imposed," he added. Azlan said following this development, trading of Uniphoenix Corporation's shares will be suspended from tomorrow until further notice so as to ensure proper dissemination of information. Halim Securities had failed to settle its obligation to SCANS beginning March 19, forcing the exchange to despatch a team of on-site supervisors on Friday. (Asia Pulse 24-Mar-1998) SIME BANK: Suitors Given Deadline on Details -------------------------------------------- Rashid Hussain Bhd, RHB Capital Bhd and RHB Sakura Merchant Bankers Bhd have been given five additional market days to release funding details for the Sime Bank Bhd purchase, the latter's subsequent merger with RHB Bank, and the recapitalisation of the merged entities. The KLSE said in a statement that it granted the additional five days from yesterday to March 27 "in view that the proposed funding scheme has not been finalised." (The Star Online 24-Mar-1998) SIME BANK: To Publish Full Financial Statement ---------------------------------------------- Sime Bank Bhd, which posted a massive pre-tax loss for the six month period ended Dec 31, 1997, will publish a full financial statement Tuesday if approved by the central bank, Bank Negara Malaysia. Its executive chairman and chief executive officer Tunku Ahmad Tunku Yahya said in a statement late Monday that once details of the financial statement were made public, the bank's management would be available to field all queries relating to its results. In the meantime, Tunku Ahmad said, the management reassured depositors and lenders that the bank and its subsidiaries' businesses would operate as usual. He also reiterated this evening's statement by Bank Negara governor Ahmad Mohd Don at a news conference that Sime Bank was not insolvent. He said as was disclosed by the central bank, Sime Bank recorded a pre-tax loss of RM1.57 billion (US$1 = RM3.6) for the half year ended Dec 31, 1997 which led to a reduction in the bank's risk weighted capital adequacy ratio (RWCR) to 2.9 percent, which was below the minimum required level of eight percent. As such, the bank would need to undertake a recapitalisation exercise to bring it back to eight. Tunku Ahmad said the management would like to stress that the pre-tax loss reflected provisions totalling RM1.8 billion to cover in full the bank and its subsidiaries' bad and doubtful assets resulting from its Malaysian, regional and stockbroking activities. "We would also like to emphasize that Bank Negara's statement also includes an unequivocal statement that for all depositors of Sime Bank and its subsidiaries in Malaysia and overseas that their deposits and interests are guaranteed in full by the government and this includes interbank deposits," he added. In giving that guarantee this evening, the central bank's governor had called on Sime Bank's customers to have confidence in the bank to avoid a run on it. (Asia Pulse 24-Mar-1998) P H I L I P P I N E S TALSAN ENTERPRISES: SEC Dismisses Petition for Relief ----------------------------------------------------- The Securities and Exchange Commission (SEC) has dismissed the petition of Talsan Enterprises, Inc. for a temporary relief from the payment of its loans amounting to 5.16 million Philipine pesos (PhP). In the order issued March 19, the SEC said it is "constrained" to dismiss the case as Talsan failed to submit to the commission pertinent documents and data about its finances and its operations during its set deadline. In an order released January 14, the SEC directed the firm to submit the following documents: its audited financial statements, interim financial statement, list of its creditors, list of stockholders, list of assets, debt payment schedule, and tax certificate. According to the order, the firm should have submitted the documents 20 days after January 20 after the firm's counsel received the order. Talsan is a wholesaler, retailer, distributor, importer and exporter of all kinds of consumer goods and food items. Talsan said it "suffered serious liquidity problems due to its difficulty in collecting receivables from clients and aggravated debt burdens, interests and charges as well as in restructuring other financial obligations." (BusinessWorld 24-Mar-1998) S I N G A P O R E PARKWAY HOLDINGS: Reports Sharply Lower Profits ----------------------------------------------- Parkway Holdings suffered a 59 per cent plunge in 1997 net profit to $19.7 million as the regional currency turmoil and economic slowdown hurt its health-care business, particularly in Indonesia. It made a $23 million provision for foreign exchange translation losses on loans, doubtful trade debts and the falling value of its equity investments. The group incurred a $26.7 million extraordinary loss due mainly to a fall in the value of its investment in a Jakarta hospital and for loans and guarantees to its hospital associate in Medan. Group turnover for the year ended December rose 2 per cent to $397.1 million. Parkway's performance was worse than expected. Analysts polled by The Business Times had expected net profit of around $25 million. The group made a pre-tax profit of $97.3 million in Singapore, but this was offset by losses of $9.2 million in Indonesia, $745,000 in Malaysia and $222,000 in Australia. Its health-care business suffered a 15 per cent decline in pre-tax profit to $56.7 million. Earnings per share plunged to 6.23 cents from 16 cents. Net tangible asset backing per share fell from $2.48 to $2.79 previously. Parkway has proposed a final dividend of three cents per share. (The Straights Times 24-Mar-1998) T H A I L A N D TONGKAH HARBOUR: Taps Financial Professionals --------------------------------------------- Tongkah Harbour Public Company Limited (SET:THL) announced yesterday that it has appointed DS Prudential Management Co.,Ltd. as its Financial Advisor. At this stage, the Company said, the Financial Advisor and the Company's auditor, Ernst & Young Office Ltd. are reviewing the Operational Plan and Financial Projections of the Company. The plan will be proposed to the Board of Directors for consideration and approval on 26 March 1998. The approved reports will then be presented to the Company's shareholders for consideration and approval at the forthcoming Annual General Meeting of Shareholders which will be held in April 1998. (SET 24-Mar-1998) QUALITY HOUSE: Recapitalization Plan on Track --------------------------------------------- Quality Houses Plc (SET:QH) announced yesterday that the company is still proceeding with its recapitalisation plan which is in line with the shareholders' approval. The Company made this statement while denying "groundless" reports that the company is planning to merge with Land and House Plc (SET:LH). (SET 24-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 * * *