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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      

      Tuesday, June 23, 1998, Vol. 1, No. 86

                    Headlines



C H I N A   &   H O N G   K O N G

BEDFORD PROPERTY INVESTORS: Bedford Moves to Sell Company
BRIGHTMOND CO. LTD.: Winding-up Petition
HING SHING: Clients Plan Joint Compensation Protest
LAI SUN DEVELOPMENT: Lai Sun Chief Backs $503m Rights Issue
MING FUNG GROUP: Clients Stage Compensation Protest


J A P A N  

COSMO OIL: Credit Review for Possible Downgrade
DAIEI INC.: Moody's Downgrades Daiei Credit Rating
HAZAMA CORP: Posts 65.9b Yen Net Loss In FY97
JAPAN ENERGY: Credit Review for Possible Downgrade
LONG TERM CREDIT: Merger Move Bid for Ailing LTCB
MITSUBISHI MOTORS CORP.: S&P Lowers Mitsubishi's Rating
MITSUI MINING: Reports Net Loss


K O R E A

ARAE-A CONSTRUCTION: Reports to Creditor Body
CHUNG-KAE PHARMACEUTICAL: Starts Creditor Proceedings
CHUNGWON DEVELOPMENT: Reports to Creditor Body
DAE CHANG ENTERPRISE: Firm on 'Hit List' Goes Under
KOREA ELECTRIC POWER: State Company to Be Privatised

KOREA TELECOM: State Company to Be Privatised
KOREA TOBACCO: State Company to Be Privatised
POHANG IRON & STEEL: State Company to Be Privatised
SHINHO ELECTRONICS: Firm on 'Hit List' Goes Under
SHINNAM DEVELOPMENT: Firm on 'Hit List' Goes Under


P H I L I P P I N E S

MIDAS DIVERSIFIED: Export Firm to Withdraw Plea
PHILIPPINE AIRLINES: To Cut Fleet in $16.1b Debt Plan


T H A I L A N D

PHATRA THANAKIT: Announces Merger With Thai Farmers Bank


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C H I N A   &   H O N G   K O N G
=================================

BEDFORD PROPERTY INVESTORS: Bedford Moves to Sell Company
---------------------------------------------------------
According to a Bloomberg report shown on the Hong Kong
Standard of June 20, Bedford Property Investors, an owner
of US West Coast office and warehouse properties, has hired
investment bank Lehman Brothers for a possible sale of the
firm.

The move came after the company suffered a 20 per cent drop
in its market price this year, making it hard for the
company to raise capital to invest profitably in
properties.


BRIGHTMOND CO. LTD.: Winding-up Petition
----------------------------------------
A petition for the winding-up of Brightmond Company Limited
by the High Court of HKSAR was on 1 Jun, 98, and is
directed to be heard before the Court on 15 July, 98.


HING SHING: Clients Plan Joint Compensation Protest
---------------------------------------------------
According the SCMP of June 20, former clients of the
collapsed brokers CA Pacific Securities, Ming Fung Group's
Chark Fung Securities will today petition the SAR's Chief
Executive for full compensation. CA Pacific's former
clients will petition for full compensation for both cash
and margin clients.

Clients of Hing Shing demanded compensation in cash instead
of shares as the share value had dropped from $30 million
last August to $3 million at present. They said that Hing
Shing had not collapsed in its entirety and should
compensate the clients who used the closed branch.


LAI SUN DEVELOPMENT: Lai Sun Chief Backs $503m Rights Issue
-----------------------------------------------------------
Lai Sun Development yesterday defended its planned $503.5
million rights issue and rejected speculation that the
company had financial difficulties.

Executive director Julius Lau Shu-yan yesterday said that
with liquidity in the financial market still low, the
proposed fund-raising was aimed at improving the company's
cash flow during the credit crunch.

He said key shareholders - Lai Sun Garment International
and the family of chairman Lim Por-yen - would underwrite
the rights issue, indicating their confidence and
commitment. Even if minority shareholders decided not to
subscribe, the big shareholders would underwrite all rights
shares and inject more than $500 million into the company,
he said.

Last week Lai Sun announced a proposed one-for-two rights
issue of at least 535.66 million new shares at 94 cents
each. The price is a 13.8 per cent discount to the average
closing price of $1.09 per share over the five trading days
to June 16.

Some analysts estimate Lai Sun's net gearing ratio to be
more than 50 per cent.

Last Friday Lai Sun started the public sale of 15 houses at
its luxury joint-venture Tycoon Place in Wong Yue Tan, Tai
Po at $6,255 per square foot.


MING FUNG GROUP: Clients Stage Compensation Protest
---------------------------------------------------
According to the SCMP of June 22, about 80 customers of
Ming Fung Group yesterday staged a demonstration at the
stock exchange, demanding full compensation for shares
deposited with the group.

They accused the regulators of negligence in supervising
the group, resulting in the alleged theft of shares
amounting to about $200 million. A deputy convenor of a
committee orgainising the demonstration said that clients
had been told by the regulators in January that Ming
Fung Group's financial positionn was sound and it was not
until May 24 when the SFC dicided to liquidate the group,
that the clients were notified of a $246 million shortfall
in group assets. Clients attributed their plight to a
deficiency in the Central Clearing and Settlement
System which centralises all the exchange share settlement
procedures but allows brokers to administer the shares
deposited there without client consent.

The above mentioned convenor said that clients of Ming Fung
should not expect to get the same treatment as former CA
Pacific Securities clients who each got up to $150,000
because the government did not agree to using the CA
Pacific case as a model.

He also said he was informed by Ming Fung's provisional
liquidator, KPMG Peat Marwick that the group's four
subsidiaries, Ming Fung Bullion, Winton Commence, Chark
Fung Securities and Kee Fung International Finance, would
be liquidated independently of one another.


=========
J A P A N  
=========

COSMO OIL: Credit Review for Possible Downgrade
-----------------------------------------------
The Asian Wall Street Journal reported that Moody's
Investor Services Inc. place its senior unsecured debt
rating of Ba3 for Japan Energy Corp. and the Ba1 senior
unsecured rating of Cosmo Oil Co. on review for possible
downgrade. Moody's is reportedly concerned that the
increasingly difficult operating environment from low
gasoline prices in Japan will constrain significant
improvements in debt coverage measurements. Both of
these companies' earnings have been depressed over the past
several years, due in part to continuing decline in
gasoline prices and increased competition due to excess gas
stations.


DAIEI INC.: Moody's Downgrades Daiei Credit Rating
--------------------------------------------------
The Asian Wall Street Journal reported that Moody's
Investor Services Inc. downgrades its long-term debt rating
for Daiei Inc. from Ba3 to B2. This downgrade affects 140
billion yen ($1.03 billion) of bonds.


HAZAMA CORP: Posts 65.9b Yen Net Loss In FY97
---------------------------------------------
Hazama Corp. recorded a consolidated net loss of 65.9
billion yen for the year ended March, mainly as a result of
126.8 billion yen in extraordinary loss for the year, the
company announced Friday. Nihon Keizai Shimbun reports June
20 the extraordinary loss resulted from liquidation of
ailing group companies and the posting of loan-loss
reserves for accounts receivable considered uncollectable.
The major civil engineering company saw group equity
capital decline to 11.1 billion yen from 78.6 billion yen a
year earlier.

The absence of proceeds from the sale of securities
holdings is expected to depress group net profit 28% to 10
billion yen this term.


JAPAN ENERGY: Credit Review for Possible Downgrade
--------------------------------------------------
The Asian Wall Street Journal reported that Moody's
Investor Services Inc. place its senior unsecured debt
rating of Ba3 for Japan Energy Corp. and the Ba1 senior
unsecured rating of Cosmo Oil Co. on review for possible
downgrade. Moody's is reportedly concerned that the
increasingly difficult operating environment from low
gasoline prices in Japan will constrain significant
improvements in debt coverage measurements. Both of
these companies' earnings have been depressed over the past
several years, due in part to continuing decline in
gasoline prices and increased competition due to excess gas
stations.


LONG TERM CREDIT: Merger Move Bid for Ailing LTCB
-------------------------------------------------
According to an Agence France-Presse article on the Hong
Kong Standard of June 22, the Yomiuri Shimbun paper said
that LTCB, struggling under heavy bad loans, has asked
several major commercial banks to allow it to merge. The
paper said that the bank was in merger talks with its
largest shareholder, Dai-Ichi Kangyo Ban, but both banks
later denied that report.

Analysts said a merger would be well received by the
markets, but the best thing to do would be to close it down
and pay off its depositors in view of the limited need for
long term credit banks. Tokyo's three long term credit
banks were set up after World War II to finance the
restoration of Japan's industry, but are now struggling to
find their way as the economy matures.

LTCB suffered a pre-tax loss of 282.7 billion yen in the
past year to March and is struggling under bad loans
amounting to 1,378.5 billion yen.

The Asashi said that if Dai-Ichi Kangyo Bank agrees to a
merger it would be able to ask the Resolution and
Collection Bank, a scheme set up to dispose of the nation's
bad loans, to take over LTCB's irrecoverable loans.

The merger would create one of Japan's biggest banks in
terms of assets to rival Bank of Tokyo-Mitsubishi, whose
assets stand at 82 trillion yen.

The Mainichi Shimbun said LTCB may disband to become a
bridging bank, taking over the operation of failed banks
with public funds.

The finance ministry and the central bank of Japan are said
to be considering the plan.

A Bloomberg report said that LTCB also denied a published
report the government is considering transforming it into a
public bank, to serve as a bridge bank to take over loans
from troubled banks and continue lending to customers of
those banks.

The Bloomberg report also said that Japan's commitment to
allowing weak financial institutions to fail was called
into question last week when Kyodo News reported the
government was considering merging the two struggling
lenders LTCB and Nippon Credit Bank.

The above mentioned report, denied by both of the banks
concerned, disappointed investors who hoped the government
would earmark public funds to set up a bridge bank that
would take over assets of failing lenders.


MITSUBISHI MOTORS CORP.: S&P Lowers Mitsubishi's Rating
-------------------------------------------------------
The Asian Wall Street Journal reported that Standard and
Poor's Ratings Group lowered Mitsubishi Motors rating based
on public information (pi) from BBBpi to Bbpi. The rating
agency said Mitsubishi Motors is not well-positioned to
cope with a more challenging business environment, given
its limited planned product introductions and its
substantial exposure to the commercial-vehicle segment,
which will face a downfall in demand.  


MITSUI MINING: Reports Net Loss
-------------------------------
Mitsui Mining Co. a leading Japanese mining company, a
Friday said it suffered a consolidated net loss of 399
million yen (US$2.92 million) for the year ended March 31.
The company said sales were hurt by the shutdown of its
coal mine in southern Japan in March 1997 and by the parent
company's sale of part of its shareholding of Mitsui
Greenland, an operator of leisure facilities, in addition
to the effects of the sagging domestic economy.


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

ARAE-A CONSTRUCTION: Reports to Creditor Body
---------------------------------------------
The Chungwon Development Company and the Arae-A
Construction Company advertized in Korean language Maeil
Kyungje that their affiliated companies should report as
soon as possible to the companies' creditor body since the
two companies filed for bankruptcy on May 30, 1998 (the
president of both companies is Mr. Yoon Seyoung). The
creditor body's address is 224-9 Jayang-dong, Kwangjin-gu,
Seoul.  Tel.: 02-457-5068, Fax: 457-5069


CHUNG-KAE PHARMACEUTICAL: Starts Creditor Proceedings
-----------------------------------------------------
The Seoul District Court announced in the Korean language
Maeil Kyungje that Chung-kae Pharmaceutical Company started
its creditor reconciliation procedure. The company's
address is 94-69 Youngdeungpo-7ga, Youngdeungpo-gu, Seoul
and the president is Mr. Chang Min-su. The creditors have
until July 11, 1998 to report.


CHUNGWON DEVELOPMENT: Reports to Creditor Body
----------------------------------------------
The Chungwon Development Company and the Arae-A
Construction Company advertized in Korean language Maeil
Kyungje that their affiliated companies should report as
soon as possible to the companies' creditor body since the
two companies filed for bankruptcy on May 30, 1998 (the
president of both companies is Mr. Yoon Seyoung). The
creditor body's address is 224-9 Jayang-dong, Kwangjin-gu,
Seoul.  Tel.: 02-457-5068, Fax: 457-5069


DAE CHANG ENTERPRISE: Firm on 'Hit List' Goes Under
---------------------------------------------------
According to the Korea Herald, the Dae Chang Enterprise Co.
defaulted on 770 million won notes due last Friday to the
Cho Hung Bank and another 330 billion won due to the Korea
First Bank.  The Dae Chang Enterprise Co. is a construction
company that separated from the Daewoo Group in 1983.  It
was run until late last year by Kim Kwan-choong, the older
brother of Kim Woo-choong, who is chairman of the Daewoo
Group.

Dae Chang is among the 55 companies cited by creditor banks
on a list of nonviable companies (the "Hit List") that
declared bankruptcy last week. Since the list of firms was
made public, banks have been collecting outstanding loans
to these companies which, according to the Korea Herald, is
driving them out of business.


KOREA ELECTRIC POWER: State Company to Be Privatised
----------------------------------------------------
According to the SCMP of June 22, the South Korean
govenment will this week announce a list of about a dozen
state companies that will be privatised in an effort to
reform the inefficient public sector and raise money needed
to resolve serious non-performing loan and unemployment
problems. President Kim Dae-jung could receive the list as
early as today.

Korea Electric Power, the utility monopoly, and several
other giant firms are expected to be on the list.

The bureau said that Korea Electric Power invested 107
billion won in five communications companies without any
dividend incomes and lost 200 billion won by investing in
an unprofitable cable television company.

The government's privatisation plan is likely to face
strong opposition from labor unions at state enterprises as
well as ministries which do not want to lose their
influence by shedding the companies. Union members at Korea
Telecom, Korea Electric Power and three other large state
companies staged a mass rally in downtown Seoul to protest
the move.


KOREA TELECOM: State Company to Be Privatised
---------------------------------------------
According to the SCMP of June 22, the South Korean
govenment will this week announce a list of about a dozen
state companies that will be privatised in an effort to
reform the inefficient public sector and raise money needed
to resolve serious non-performing loan and unemployment
problems. President Kim Dae-jung could receive the list as
early as today.

Korea Telecom is expected to be on the list.

The government's privatisation plan is likely to face
strong opposition from labor unions at state enterprises as
well as ministries which do not want to lose their
influence by shedding the companies. Union members at Korea
Telecom, Korea Electric Power and three other large state
companies staged a mass rally in downtown Seoul to protest
the move.


KOREA TOBACCO: State Company to Be Privatised
---------------------------------------------
According to the SCMP of June 22, the South Korean
govenment will this week announce a list of about a dozen
state companies that will be privatised in an effort to
reform the inefficient public sector and raise money needed
to resolve serious non-performing loan and unemployment
problems. President Kim Dae-jung could receive the list as
early as today.

ABN Amro Asia's Seoul branch research head said that
foreign investors will be interested in buying shares in
companies like Korea Tobacco & Ginseng Corp.


POHANG IRON & STEEL: State Company to Be Privatised
---------------------------------------------------
According to the SCMP of June 22, the South Korean
govenment will this week announce a list of about a dozen
state companies that will be privatised in an effort to
reform the inefficient public sector and raise money needed
to resolve serious non-performing loan and unemployment
problems. President Kim Dae-jung could receive the list as
early as today.

Pohang Iron & Steel, the world's second largest steel
producer, is expected to be on the list.

Analysts said most state enterprises would be sold to
foreign investors because domestic firms and banks could
not afford to buy them. Banks are saddled with 100 trillion
won of bad loans because of a wave of bankruptcies among
big corporations during the past year.

The bureau said that Pohang Iron & Steel wasted 100 million
won by keeping large convention centres and executive
mansions which were used only a few days a year. The
government's privatisation plan is likely to face strong
opposition from labor unions at state enterprises as well
as ministries which do not want to lose their influence by
shedding the companies.


SHINHO ELECTRONICS: Firm on 'Hit List' Goes Under
-------------------------------------------------
Shinho Electronic & Communication Co, a unit of the midsize
conglomerate Shinho Group, went bankrupt Friday after
defaulting on maturing loans of 103 million won (US$74,000)
for two days, according to its creditor Daegu Bank. In
South Korea, if a company fails to honour maturing loans
for two days, it is considered as bankrupt.

Shinho Electronics is among the 55 companies cited by
creditor banks on a list of nonviable companies (the "Hit
List") that declared bankruptcy last week. Since the list
of firms was made public, banks have been collecting
outstanding loans to these companies which, according to
the Korea Herald, is driving them out of business.


SHINNAM DEVELOPMENT: Firm on 'Hit List' Goes Under
--------------------------------------------------
Additionally, the Shinnam Development Co., which is a
subsidiary of the Hanil Group, defaulted on 18.18 billion
won worth of notes due to the Korea First Bank last
Thursday.  On the following day, this builder declared
bankruptcy.

Shinnam Development is among the 55 companies cited by
creditor banks on a list of nonviable companies (the "Hit
List") that declared bankruptcy last week. Since the list
of firms was made public, banks have been collecting
outstanding loans to these companies which, according to
the Korea Herald, is driving them out of business.


=====================
P H I L I P P I N E S
=====================

MIDAS DIVERSIFIED: Export Firm to Withdraw Plea
-----------------------------------------------
Export firm Midas Diversified Export Corp. is set to
withdraw the petition it filed with the Securities and
Exchange Commission (SEC) asking for a temporary relief
from the payment of its debts amounting to 3.05 billion
Philippine pesos (PhP). Midas counsel Augusto Macam said
Samuel Lee, the firm's owners, reached an agreement with
its biggest creditor bank, Metropolitan Bank & Trust Co.
(Metrobank), to restructure its debt payments over a three-
year period. The agreement involves surrendering one of
Midas' assets to Metrobank to settle its debts. Metrobank
has a total loan exposure of PhP688.7 million.

BusinessWorld reports June 22 that under the arrangement,
the bank effectively agreed not to foreclose on the
property used to mortgage the loan. Mr. Macam also said
other creditor banks of Midas agreed to an arrangement
which would involve pooling all of the firm's unencumbered
assets into one basket which other creditor banks can tap
into to secure their debts. So far, he said over PhP1
billion are already in the basket.


PHILIPPINE AIRLINES: To Cut Fleet in $16.1b Debt Plan
-----------------------------------------------------
The SCMP reports that financially troubled Philippine
Airlines won crucial support yesterday when creditor banks
agreed to reschedule its debts of 85 billion pesos, most of
which are owed to foreign banks.

A joint statement by creditors and PAL said that they
recognized that the economy crisis, aggravated by labor
problems, have caused heavy stresses on PAL's
organizational structure and finances, and PAL's
obligations need to be rescheduled in the immediate term.

PAL yesterday formally sought approval from the Securities
and Exchange Commission for a rehabilitation plan and asked
the SEC to appoint a rehabilitation receiver or committee
to implement the plan. The airline said in its petition
that it foresees the impossibility of paying its
obligation and liabilities as they fall due. It also said
it had sufficient assets to cover all its debts. The banks
said the plan would include a cut in fleet size,
rationalisation of manpower, disposal of excess assets and
inventories, sale of some business units and restructuring
of its route network. PAL anticipates that it will be able
to pay its obligations if it is rehabilitated.

SEC chairman Perfecto Yasay said he wanted the
rehabilitation plan finalised within two months, and any
viable plan that the SEC would approve must ensure that the
rehabilitation will be achieved within a period of three to
five years. He said he would issue an order next week
creating an interim committee that would review PAL's
proposed rehabilitation plan.

Incoming Finance Secretary Edgardo Espiritu said the
rehabilitation would boost the credibility of the airline,
which had been a victim of mismanagement and the outlet of
a lot of political appointments. He said that it was
unlikely for the government, which owns about 30 per cent
of the airline, to bail it out.

PAL's 620-member pilot union, which has been on strike for
two weeks, had doubts about the debt rescheduling deal.  
Spokesman of the Airline Pilots Association of the
Philippines said that the rehabilitation will only be good
if there is a change in management style, and the pilots'
strike is only an excuse for the bad management.

The alliance of PAL's three labor unions said they would
hold a nationwide protest on July 1, the first day of
office of president-elect Joseph Estrada.

According to an Agence France-Presse report on the Hong
Kong Standard, the airline flew into more turbulence
yesterday when its ground crew filed a strike notice, a
move which could paralyse most traffic at Manila airport.

The report also says that the bulk of the 85 billion peso
loan, against total assets of 90 billion pesos, are
believed to have been provided by foreign banks and
aircraft leasing companies.

According to the report, PAL spokesman said that under the
rehabilitation scheme, PAL would initially carry out an
operating plan that would last until the end of September.
After that, depending on the airline's performance in that
period, the management will decide whether to expand or
shrink operations, or even to close down entirely.

PAL said it was seeking the help of regulators in
implementing a rehabilitation plan to avoid defaulting on
loans and breaking up company assets that may arise from
creditors' action.

The report describes the rehabilitation plan as including
laying offs of personnel instead of using the term
rationalisation of manpower mentioned above. It describes
the sale of some business units as outsourcing of some
airline functions and says that in restructuring route
network, the airline will give up routes and frequencies to
strategic alliances.

The report mentions that The Business World newspaper said
PAL management met creditors on Wednesday including
representatives of Chase Manhattan Corp, Banque Nationale
de Paris and Credit Agricole Indosuez.


===============
T H A I L A N D
===============

PHATRA THANAKIT: Announces Merger With Thai Farmers Bank
--------------------------------------------------------
Thai Farmers Bank and Phatra Thanakit executives announced
Monday that the parent commercial bank will raise its stake
in the finance company to 100% from 49%. Thai Farmers Bank
intends to make a tender offer of baht 4.50 per share for
shares of Phatra Thanakit Public Company Limited not
currently held by TFB on the condition that the tender
offer will be made after Phatra Thanakit's Extraordinary
Shareholders Meeting to be held on July 16, 1998.
Thereafter, Thai Farmers Bank Public Company Limited plans
to delist Phatra Thanakit Public Company Limited from the
Stock Exchange of Thailand.

The SET, meanwhile, announced that Phatra Thanakit asked
the SET to halt its securities from the afternoon trading
of June 22, 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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