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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      

      Thursday, May 7, 1998, Vol. 1, No. 54

                    Headlines


I N D O N E S I A

PT ASURANSI: S&P Lowers Ratings on Debt Issue


K O R E A

CHONGGU CORP: To Seek Court Receivership
HALLA PULP & PAPER: Bowater Deal Worth $210 Million
KIA MOTORS: Promises Voting Rights to Contributing Cos.
KOHAP GROUP: Plan to Restructure Involves Sell-offs
SAMSUNG GROUP: To Reduce Number of Business Lines


M A L A Y S I A

HALIM SECURITIES: Guarantor Uniphoenix Receives Petition
SIME DARBY BHD: Seeks Higher Net Cash Surplus


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I N D O N E S I A
=================

PT ASURANSI: S&P Lowers Ratings on Debt Issue
---------------------------------------------
Standard & Poor's today lowered its local currency claims-
paying ability rating and counterparty credit rating on the
state-owned general insurer PT Asuransi Jasa Indonesia
(Jasindo) to 'CCC-' from 'B+' and removed the ratings from
CreditWatch with negative implications where they were
placed on January 9, 1998. The rating outlook is negative.
The rating action is based on Jasindo's renegotiation of a
US dollar specific debt issue by an Indonesian issuer,
which is subject to a financial guarantee by Jasindo.

Noteholders have agreed to extend the maturity date of  
bonds issued at Jasindo's request. Jasindo's desire to
extend the funding arrangements in part reflect
difficulties in Indonesia in general to meet foreign  
currency obligations.

Standard & Poor's understands that the financial guarantee  
is subject to collateral and reinsurance; however, the  
insurers (which also are government related entities) face  
similiar difficulties in sourcing US dollars.

Local currency insurance obligations of Jasindo continue to  
be honoured. As the state-owned general insurance company,
Jasindo's move into financial guarantee business was
undertaken to support projects of a national interest, such
as infrastructure or import and export activities.
(Asia Pulse 06-May-1998)


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K O R E A
=========

CHONGGU CORP: To Seek Court Receivership
----------------------------------------
A leading South Korean construction company, Chonggu Corp.,
which filed for court protection to reschedule its debts
repayment, said Wednesday that it would instead seek court
receivership within the week, sources at Chonggu and the
Taegu District Court said.

Under Korean bankruptcy law, a company loses managerial  
rights under court receivership and is liquidated. But
under court protection, it can restructure, while retaining  
managerial control. The home-building firm would file for
liquidation and court receivership Friday, on the
recommendation of the court, the sources added.

Chonggu's new direction comes on the heels of two big  
retailers, New Core and Midopa, being turned down for court  
protection for debt rescheduling by the courts. Judge Park
Tae-ho of the Taegu court said that he had advised Chonggu
Group chairman to file for liquidation because most of the
conglomerate's affiliates had shown little sign of
viability and had complicated debt problems.

Three Chonggu affiliates, including the Bluehill Department  
Store, are likely to follow in the steps of its parent  
company.
(Asia Pulse 06-May-1998)


HALLA PULP & PAPER: Bowater Deal Worth $210 Million
---------------------------------------------------
Korea Development Bank (KDB) said yesterday that it has
agreed with Bowater Co. of the United States on the sell-
off of Halla Pulp and Paper Co. to the American firm at
$210 million. KDB is the main creditor bank of Halla Pulp,
a paper-making unit of Halla Group, which went bust last
year and applied for court protection. Bank officials said
that if things go well, the price will be paid in cash next
month to 21 creditor banks and other financial
institutions. The U.S. paper manufacturing company offered
$135 million as the price at first, but the price went up
in the course of negotiations, the officials said (TCR-AP
13-Apr-1998).

This is the first case of merger and acquisition by foreign
company of Korean firm through mediation of domestic
financial institution since Korea's placement under the
International Monetary Fund bailout program late last year.

The sell-off agreement is good for both the Halla Pulp and
the creditor banks, they said, adding that it will help the
Korean paper maker normalize its management within a short
period, while helping creditors banks meet BIS (Bank for
International Settlements)-set capital adequacy ratios.
(Korea Herald 07-May-1998)


KIA MOTORS: Promises Voting Rights to Contributing Cos.
-------------------------------------------------------
South Korea's Kia Motors Corp. plans to guarantee voting
rights, or a say in management, to companies at home and
abroad which contribute to its needed capital, depending on
how much stock they purchase, Kia Motors Corp. said
Wednesday.

This paves the way for Ford Motor of the United States to  
participate in the management of Kia, in accordance with
its shareholdings, if it purchases new shares in the
upcoming drive to raise capital. The U.S. motor giant is
sure to participate in Kia's capital increase.

Lee Jong-dae, one president of Kia Motors, told reporters  
Wednesday that the company plans to give voting rights to
all new share buyers. Ford is unlikely to take full control
of Kia, due to the latter's amount of debts and labor
problems, Lee said.

But the American giant will instead exert a larger voice at  
the board of directors and shareholders' meetings, Lee
said. Ford, though the largest Kia shareholder with a 16.9  
percent stake - which owns that amount with its Japanese  
affiliate, Mazda - has thus far not been involved in Kia's  
management.

Under the new scheme, Ford, as the largest shareholder, can  
exercise substantial influence over future managerial  
decisions. Visiting Ford vice chairman Wayne Booker has
already pledged to increase capital in Kia, and the
government is also pushing for Ford to assist in the
management of the financially-strapped firm. Kia is
considering giving Ford preferential rights after issuing
new shares.
(Asia Pulse 06-May-1998)


KOHAP GROUP: Plan to Restructure Involves Sell-offs
---------------------------------------------------
Kohap group plans to complete its restructuring program
until the end of June this year, raising, among other
things, its financial status. To this end, Kohap will focus
on introducing foreign capital by selling off its
production facilities at home and abroad, Kohap said in a
press release.

To be sold under the program includes a polyester factory
in Mexico at $23 million to a Mexican firm. Kohap noted
yarn plants in Xingdao, China and Indonesia will also be
put up for sale. It also is considering selling off some
stakes of its plants in Ulsan, constructed in 1996,
prompted by low operation rates at 50 to 60 percent, since
late last year when the financial crisis began to hit the
nation.

Kohap chairman Chang Chi-hyuk said in a meeting with
reporters that the group would be able to realize more than
$2.4 billion in exports this year with more than 93 percent
operational rates of production lines, boosted by resumed
financial assistance from banking institutes.

"We are mobilizing all possible means available to
materialize the massive restructuring program and cope with
the financial crunch. In the long term, the number of
branch enterprises will be reduced to three and the company
will refrain from resorting to layoffs of employees in the
process," he said.
(Korea Times 04-May-1998)


SAMSUNG GROUP: To Reduce Number of Business Lines
-------------------------------------------------
As part of its sweeping restructuring program, the Samsung
Group has decided to reduce the number of its business
lines from the present 10 to four or five before the end of
1999 through mergers and sell-offs. The giant business
empire has also decided to attract $5 billion in foreign
funds by disposing of some of its subsidiaries or capital
tie-ups with foreign business partners this year in an
effort to improve its financial structure. At the same
time, it will reduce its debt-equity ratio from the current
317 percent to 197 percent by the end of 1999 and further
to 124 percent by 2002.

These are among the restructuring programs the Samsung
Group announced yesterday to ride out the current financial
crisis and bolster its financial structure. The group has
engaged in 10 business categories, including electronics,
machinery, chemicals, automobiles, shipbuilding,
distribution, clothing, real estate development and
service. Samsung will liquidate all businesses except those
in core areas through sell-offs to a third party, mergers
and joint ventures with foreign business partners, he said.

For instance, Samsung recently sold its heavy equipment and
forklift businesses to Volvo of Sweden and Clark of the
United States for $700 million and $30 million,
respectively, while disposing of its three overseas
subsidiaries _ IGT, Cagen and Tisep _ to foreign companies
for $50 million.

To pull down its debt-equity ratio to 124 percent, the
level of advanced countries, by 2002, it will pay back a
total of 29 trillion won ($20.7 billion) in debts during
the period from 1998 through 2002. During the cited period,
it will secure 3.3 trillion won by disposing of assets, 9.7
trillion won through capital increases, 4 trillion won by
disposing of some businesses and asset reappraisal, and 14
trillion won through pay cuts and other cost-saving
efforts, the spokesman said.
(Korea Herald 07-May-1998)


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M A L A Y S I A
===============

HALIM SECURITIES: Guarantor Uniphoenix Receives Petition
--------------------------------------------------------
Malaysian property and financial group Uniphoenix Corp said
it has received a winding-up petition from Multi-Purpose
Bank against it as corporate guarantor for Halim
Securities. In a statement, Uniphoenix said its lawyers
have advised that the petition is "misconceived", and it
has filed an application to strike out the petition.

It noted that Halim, its 80 per cent-owned unit, was
presented with a winding-up petition by the same bank on
April 24 "for failure to settle a sum" of M$16.08 million
(S$7.1 million). Uniphoenix then applied for a court order
to strike out the petition.

On March 23, Halim became the first brokerage to be placed
under the Kuala Lumpur Stock Exchange's (KLSE) direct
control after it defaulted on a MS$10 million obligation to
its clearing house.

Halim had failed to comply with a restriction that allowed
it to buy shares only if it had received 100 per cent of
the payment up front. As a result, the firm could not meet
its obligation to the exchange. The KLSE moved quickly to
protect investors and prevent the problems of the firm
having a knock-on effect on the stockbroking industry.

But Singapore's Phillip Securities came to Halim's rescue
when Uniphoenix announced a restructuring exercise for the
ailing broking house. It is expected to hold 49 per cent in
Halim, now controlled by Malaysian businessman and
politician Soh Chee Wen.
(The Straits Times 06-May-1998)


SIME DARBY BHD: Seeks Higher Net Cash Surplus
---------------------------------------------
Conglomerate Sime Darby Bhd, which recently hived off its
financially-troubled Sime Bank Bhd to Rashid Hussain Bhd
(RHB), will soon embark on aggressive measures to restore
the financial health of the company, its chief executive
officer, Tan Sri Nik Mohd Yaacob said. He said Sime Darby
is now set to make its operations "lean and mean" in order
to prepare itself to take advantage of opportunities when
the economy recovers. In an interview in Sydney recently,
Nik said:" Sime Darby wants to get into a high net cash
surplus position."

While saying that Sime Darby Bhd was already in a net cash
position, he added that it must be strengthened to improve
the conglomerate's financial position. Nik explained that
Sime Darby's many subsidiaries were in a net cash position
where their borrowings were less than the cash they held.

Nik said Sime Darby would divest some of its overseas
assets, to take advantage of the situation there to
generate cash for the group. Recently, the group sold its
7.6 % shareholding in London-based Elementis Plc (formerly
known as Harrisons and Crossfield Plc) for RM200 million
which would be added to the group's balance sheet. The sale
was spurred by the strong pound and the change in the
nature of business of Elementis to chemicals in which Sime
Darby had no involvement. Nik also explained that the group
had many assets overseas, especially in the property
sector, that were currently not only enjoying good value
but would generate significant amount of cash if sold
now.
(The Star Online 06-May-1998)


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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