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T R O U B L E D   C O M P A N Y   R E P O R T E R     
  
             A S I A   P A C I F I C      

      Friday, March 27, 1998, Vol. 1, No. 27

                    Headlines


C H I N A   &   H O N G   K O N G  

CA PACIFIC SECURITIES: Possible Rescue Package


I N D O N E S I A

STEADY SAFE: Seeking to Reschedule $280 Million

J A P A N  

ASHIKAGA BANK: Moody's Downgrades Debt to Junk
MITSUBISHI ELECTRIC: President Steps Down


K O R E A

HALLA ENGINEERING: Court Approves Receivership
HALLA GROUP: Announces Restructuring Plans
KIA MOTORS: Samsung Enters the Fray


M A L A Y S I A



P H I L I P P I N E S

NEGROS NAVIGATION: Posts P153 Million Annual Loss
ORIENT COMMERCIAL BANK: Go Family Plans to Cover Loans


S I N G A P O R E

TELEDATA: Reports Significantly Lower Profits


T H A I L A N D





C H I N A   &   H O N G   K O N G

CA PACIFIC SECURITIES: Possible Rescue Package
----------------------------------------------
Investors in the collapsed CA Pacific Group were given new
hope yesterday when it was revealed that a last-minute
rescue package could be on the way for two subsidiary
companies. Legal proceedings aimed at winding up CA Pacific
Securities and CA Pacific Finance were blocked when the
High Court heard of the new proposal.

Robert Pang, for one of the group's creditors, High Stake
Ltd, told the court: "There is evidence there may be a
rescue plan." He said a draft statement setting out the
proposal had been prepared and could be filed with the
court within 24 hours.

It is understood the rescue plan involves $200 million
cash, which sources said should be enough to settle debts
and payments to clients of the group's finance arm. But a
source said the plan's success would depend partly on how
much information about CA Pacific the provisional
liquidators, Coopers & Lybrand, would release to the
potential investor.
(South China Morning Post 26-Mar-1998)


I N D O N E S I A

STEADY SAFE: Seeking to Reschedule $280 Million
-----------------------------------------------
Steady Safe, the Indonesian taxi and bus operator, said
yesterday it was still seeking to reschedule $280m in
promissory notes with the liquidation team of Peregrine,
the bankrupt Hong Kong investment bank.

Sofia Tian, investor relations manager, said Steady Safe
had dropped plans for a rights issue and equity swap,
agreed by Peregrine before it collapsed but blocked by
stock market regulators. Ms. Tian said Steady Safe had yet
to initiate any restructuring of sell assets and was
awaiting communication from the liquidation team before
submitting any proposal for debt rescheduling. She said the
company still had cash flow from its buses, taxis and
ferries but might consider selling off some to create cash
either for debt payments or pay for spare parts, which are
imported and have tripled in prices since the rupiah
collapsed.
(Financial Times 25-Mar-1998)


J A P A N  

ASHIKAGA BANK: Moody's Downgrades Debt to Junk
----------------------------------------------
Ashikaga Bank Ltd. (8335 JP ) rose 3 yen to 243. The
regional bank had its key long-term debt ratings lowered to
"junk" by Moody's Investors Service yesterday, becoming the
latest Japanese bank to be downgraded because of bad-loan
problems.
(Bloomberg Japan Equity Movers 26-Mar-1998)


MITSUBISHI ELECTRIC: President Steps Down
-----------------------------------------
Mitsubishi Electric Corp. President Takashi Kitaoka will
step down to assume responsibility for his company's poor
performance and the illegal payoffs that Mitsubishi
Electric allegedly made to a group of sokaiya corporate
racketeers, according to an informal decision made by the
board of directors on Wednesday.

Kitaoka, 67, will be succeeded by Managing Director Ichiro
Taniguchi, 61. A formal announcement of Kitaoka's
resignation is expected at the end of June. Sources said
Kitaoka would also give up his post as vice chairman of
the Federation of Economic Organizations (Keidanren).

They said Mitsubishi Electric is expected to suffer 33
billion yen in after-tax losses for the business year
ending this month.
(Yomiuri Shimbun 26-Mar-1998)


K O R E A

HALLA ENGINEERING: Court Approves Receivership
----------------------------------------------
For the first time in several bleak months, troubled Halla
Engineering & Heavy Industries has been able to impart some
positive news. South Korea's fourth largest shipbuilder
said the approval of its application for court receivership
represents substantial progress toward the revival of the
company.

In a letter to clients, Halla Engineering & Heavy
Industries' president K.S. Choi said the court decision
will prevent attachment procedures against the company's
assets by creditors. It will also allow the company time to
negotiate a debt repayment programme on more favourable
terms. Halla Engineering & Heavy Industries and its
creditors are now expected to present a plan for court
confirmation within six months.

Mr Choi said the plan will allow Halla to pay debts over 10
years, with a reduced principal amount for unsecured
creditors and a lower interest rate for secured creditors.   
Moreover, repayment will begin after a substantial grace
period of 12-36 months from the date court receivership
commenced. Mr Choi also said restrictions on the company's
bank accounts will soon be lifted, adding that corporate
transactions associated with bank guarantees and related
bonds will be normalised. He noted that Halla Engineering &
Heavy Industries was actively seeking foreign investments
in it as another important component of its restructuring
programme.

Earlier this week, it was also disclosed that the Halla
Group had appointed US investment bank Rothschild to
arrange a bridge financing package totalling $1bn (TCRAP
24-Mar-1998). Some of the funds raised will be allotted to
the shipbuilding unit, which accounts for more than 25% of
the group's indebtedness of around $4.6bn.

Since filing for court protection last December, Halla's
shipyard has delivered four vessels and is scheduled to
hand over six more in the next two months. It has also
suffered contract cancellations involving around 10
vessels. Last month, Halla Group said it was talking to an
unidentified Norwegian company about that company investing
in its shipbuilding subsidiary.
(Lloyd's List International 25-Mar-1998)


HALLA GROUP: Announces Restructuring Plans
------------------------------------------
South Korea's Halla Group announced Thursday that it would
slim down to three affiliates - Mando Machinery, Halla
Engineering & Construction and Halla Cement Manufacturing -
from the current 15. Group chairman Chung Mong-won said
that Halla would either merge or sell units within the year
to focus on just three subsidiaries centering around auto
parts, cement and construction.

He made the comments in a joint press conference with
Wilbur Ross, chief of Rothschild Inc. of the United States.
Ross is in Seoul to sign an agreement to offer a bridge
loan worth US$1 billion to Halla and organise mergers and
acquisitions (M&A) for the heavily-leveraged conglomerate.

The 35-year-old conglomerate, whose founder Chung In-yung
is a brother of Hyundai Group founder Chung Ju-yung,
expanded to 15 affiliates, with business divisions ranging
from shipbuilding to financing.

"Our restructuring program puts heavy weight on saving
Halla Engineering & Heavy Industries, since the heavily
indebted company is pulling down the entire group, but I no
longer have authority over its managerial rights since it
is under court protection," Chung said, referring to the
fate of the key construction unit.

Ross of Rothschild said Halla will be receiving $US40
million as part of the first batch of loans by late next
month. The New York-based financial firm would not turn
over management in Mando Machinery while seeking an M&A for
the company, Ross said.

The Halla Group would be leading the M&As for its
affiliates and Rothschild would just serve as an "adviser'
to the process, he added. Ross said his company was
planning to initially infuse operational funds to Halla
affiliates and then resolve their cross-guarantee and debt
problems to make them attractive for foreign investment.
Ross said he would start recruiting investors for Halla
once he returned to the United States this week. The
pledged $1 billion would be in syndication participated      
in by several financial institutions and financiers, with      
Rothschild as the underwriter. Ross said his company had
been receiving many inquiries from leading firms worldwide,
since it announced its plans to support Halla.
(Asia Pulse 26-Mar-1998)


KIA MOTORS: Samsung Enters the Fray
-----------------------------------
South Korea's giant Samsung business group is gearing up to
openly enter the fray to take over ailing Kia Motors Corp
after rival Hyundai Group staked its claim, press reports
said yesterday.

"Should we fail to take over Kia Motors, it would mean we
have to abandon the car-making business," a senior Samsung
Group official was quoted as saying by the Hankook daily.

The Naeway Economic Daily said Samsung had notified the
government of its intention to spin off its infant Samsung
Motors from its empire should Samsung Motors be allowed to
buy a controlling stake in Kia. In that case, Samsung
Motors, Kia Motors and Ford Motor Co could set up a     
joint-venture corporation comprising the existing
production facilities of Kia and Samsung, the daily said.

Ford has a 17 per cent stake in Kia including equity held
by its Japanese affiliate Mazda. The reports coincided with
the arrival of a senior official of Ford Motor in Seoul to     
discuss bilateral projects with Kia, including overseas
sales of Kia's compact cars and development of Kia's next
model. Paul Drenskow, who is in charge of Ford Motor's
Asian operations, is also to visit both Samsung Motors and
Hyundai Motor, Yonhap News Agency said.

Samsung has repeatedly said it had no interest in buying
Kia and would concentrate on producing upmarket cars rather
than increasing its production capacity. Samsung officials
argued that a Hyundai takeover of Kia Motors would result
in duplicated assembly lines, sales networks, research and
development personnel and parts suppliers.

If Hyundai takes over Kia, it could corner more than 50 per
cent of South Korea's car market in violation of the
antitrust law, the Samsung officials argued. But Hyundai,
which last weekend threw its hat into the ring, has said
its acquisition of Kia would bring about economies of scale
and other benefits from synergy.
(South China Morning Post 26-Mar-1998)


M A L A Y S I A



P H I L I P P I N E S

NEGROS NAVIGATION: Posts P153 Million Annual Loss
-------------------------------------------------
Publicly-listed Negros Navigation Company, Inc., one of the
oldest inter-island shipping companies in the country,
reported a net loss of P153.3 million in 1997 as compared
to its net income of P102.2 million in 1996.

But despite this, its volume of revenues grew by 18.60
percent to P1.7 billion from its 1996 figure of P1.46
billion, Conrado A. Carballo, senior vice president of the
shipping firm, noted in his report to the Philippine Stock
Exchange (PSE).  According to Carballo, the increase in
revenues was largely due to the increase in passage and
freight by 27.3 percent and 25.8 percent, respectively.  
Carballo also noted that operating cost increased by 15.55
percent as against the figures recorded on the same period
last year, brought about by the acquisition of new vessels
and chartered vessels that were fully operational.

Carballo added that the significant increases to general,
administrative and other expenses were largely due to the
increase in interest expenses from additional borrowings to
finance fleet expansion.  This is not to mention the
increase in the establishment of new ports in Davao,
General Santos City, Dumaguete, Tagbilaran city, Tacloban
City, Iligan city and Ozamiz City.

In the fourth quarter of 1997, net cash outflow amounted to
P49.8 million, compared to P398.6 million in 1996. The
report said the net cash used in investing activity for the
same quarter was recorded at P1.213 billion as against
P2.002 billion in 1996.  But the net cash from financing
activities for the period amounted to P367.5 million of
which P40.3 million represents cash outlay for currently
maturing term loans.  (PNA 24-Mar-1998)


ORIENT COMMERCIAL BANK: Go Family Plans to Cover Loans
------------------------------------------------------
Three parcels of land valued at 3.5 billion pesos (about
HK$715 million) have been offered to cover loans taken by
members of the Go family from their Orient Commercial
Banking Corp. The property infusion from the Go family,
which controls the Ever Gotesco retailing and property
group, could raise chances for the bank's rehabilitation.

Regulators have insisted the Orient bad loans - about six
billion pesos - be backed by collateral before they approve
its rescue by Rizal Commercial Banking Corp. The Go family,
hit by slumping markets as the currency crisis swept Asia,
siphoned money from the bank. Borrowings by the Ever
Gotesco group exceeded limits set by banking rules.

Yesterday, Ever Gotesco's 29 creditors agreed to
restructure the group's 16.1 billion pesos of liabilities
as part of efforts to ease its cash crunch (TCRAP 26-Mar-
1998). United Coconut Planters Bank estimates its assets at
24.6 billion pesos.

Orient closed on February 14, the first bank to shut since
the crisis began in July.

The Gos earlier offered 1.9 billion pesos of property to
back Orient's two billion peso central bank emergency loan.
(South China Morning Post 26-Mar-1998)

S I N G A P O R E

TELEDATA: Reports Significantly Lower Profits
---------------------------------------------
Teledata reported a 73.4 per cent drop in group net
earnings to $1.2 million for the year ended Dec 31 despite
an 11.3 per cent rise in group turnover to $93.12 million.
It cited its share in startup costs in the paging network
business of its associate -- Hutchison Intrapage; the
regional currency turmoil which affected cost of products
purchased mainly in US dollars; and the economic crisis in
the second half which affected the foreign associates'
performance. With the uncertain economic outlook, the group
does not expect to see significant growth in 1998.
(Singapore BusinessTimes 26-Mar-1998)


T H A I L A N D



S U B S C R I P T I O N   I N F O R M A T I O N

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