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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      

         Wednesday, August 19, 1998, Vol. 1, No. 125

                         Headlines


C H I N A   &   H O N G   K O N G

COTTON FIELD: Creditors Meeting on August 24, 1998
EASY LEADER: Creditors Meeting on August 24, 1998
GAIN POWER: Company Liquidates
GOLD VICTORY: Company to Liquidate
MING FUNG: Few Assets Seen in Failed Firm

I N D O N E S I A

BANK SERVITIA: Delays Merger Plans After Profit Declines
PT GARUDA: May Sack Thousands of Employees

J A P A N  

HITACHI LTD.: Moody's Lowers Long-Term Ratings a Notch
LONG TERM: Sumitomo's LTCB Move May Receive State Funds

K O R E A

A AND K: Company Liquidates
DAEWOO GROUP: Half-Year Results of Operations
DONGBANG PEREGRINE: Fate to be Decided in October
DONGSUH FURNITURE: Completes Creditor Reconciliation
DURAE METEK: Company Liquidates
HYUNDAI GROUP: Half-Year Results of Operations
HYUNDAI INDUSTRY: Completes Creditor Reconciliation Procedure
KOREA LONG: Fate to be Decided in October
LG GROUP: Half-Year Results of Operations
MANDO MACHINERY: Strike Hits Mando Machinery
SAMSUNG GROUP: Half-Year Results of Operations
SHINDONGYANG MACHINERY: Starts Creditor Reconciliation Procedure  
SHINHWA FABRIC: Completes Creditor Reconciliation Procedure
SK GROUP: Half-Year Results of Operations
SK SECURITIES: Fate to be Decided in October
SSANGYONG INVESTMENT: Fate to be Decided in October
TAESUNG CO.: Starts Creditor Reconciliation Procedure

M A L A Y S I A

CAPITOL BUSINESS: Members' Voluntary Winding-Up
LANDMARKS BHD: Posts RM9,000,000 Six-Month Loss
SIN NAN: Members' Voluntary Winding-Up
SUNGEI BAKAU: Petitions Court for Reduction to Capital

P H I L I P P I N E S

DESERT FOX: Bus Operator Receives Debt Relief

S I N G A P O R E

KHONG GUAN: Reports S$4.5 million Second-Half Loss
SHOWPLA ASIA: Singapore Exchange Suspends Trading in Shares

T H A I L A N D

ADVANCE AGRO: Posts Baht 1.85 Billion Second Quarter Loss
BANGKOK BANK: Depositors Make Run Before Merger with Krung
BIJOUX HOLDINGS: News About Rehabilitation Plan
Q-ZONE: FSRA Sells Shares to International Engineering
SIAM CITY: Rushing to Clean-Up Non-Performing Loans
TELECOM ASIA: Posts Baht 1.32 Billion Second Quarter Loss
THAI AIRWAYS: Posts Baht 4.3 billion Second Quarter Loss
THAI PETROCHEMICALS: Looking For New Investors
THAI PETROCHEMICALS: Second Quarter Profits Announced


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


COTTON FIELD: Creditors Meeting on August 24, 1998
--------------------------------------------------
Notice dated August 15 announces that a meeting of the creditors
of COTTON FIELD GARMENT TEXTILE MFG. CO. LTD. will be held at
Room 205, 2/F., Kaiser Centre, 18 Centre Street, Hong Kong on
August 24 at 3:00 pm for the purpose of considering and receiving
a statement of position of the company's affairs prepared by the
directors, and for appointing liquidators of the company for the
purpose of winding up the affairs and distributing the assets of
the company.  Proxies for the meeting must be lodged not later
than 4 pm on August 22.


EASY LEADER: Creditors Meeting on August 24, 1998
-------------------------------------------------
Notice dated August 15 announces that a meeting of the creditors
of EASY LEADER INTERNATIONA LIMITED will be held at Room 205,
2/F., Kaiser Centre, 18 Centre Street, Hong Kong on August 24 at
3:45 pm for the purpose of considering and receiving a statement
of position of the company's affairs prepared by the directors,
and for appointing liquidators of the company for the purpose of
winding up the affairs and distributing the assets of the
company.  Proxies for the meeting must be lodged not later than 4
pm on August 22.


GAIN POWER: Company Liquidates
------------------------------
Notice dated August 14 announces that liquidation of GAIN POWER
LIMITED commenced on June 26, 1998.  Mr David Richard Hague and
John Kwok Heem Li, both of Price Waterhouse, have been appointed
joint liquidators of the company.


GOLD VICTORY: Company to Liquidate
----------------------------------
Notice dated August 14 announces that liquidation of GOLD VICTORY
HOLDINGS LIMITED commenced on June 26, 1998.  Mr. David Richard
Hague and John Kwok Heem Li, both of Price Waterhouse, have been
appointed joint liquidators of the company.


MING FUNG: Few Assets Seen in Failed Firm
-----------------------------------------
The South China Morning Post reports that it is likely for
clients of collapsed brokerage firm Ming Fung Group to receive
only token compensation from the liquidation of the firms.  
Sources said that both groups are facing substantial shortfalls
as a result of the slump in the value of the stock they hold.

Ming Fung clients' claims to shares amount to $290 million
compared with the $44 million in stock held on behalf of clients
at the end of June, and the shortfall might have been widened due
to the diminished value of the stock since June. Such claims
represent almost 88 per cent of $330 million in outstanding
claims against Ming Fung to date.  With the substantial  
discrepancy in the stock, Ming Fung clients will have to count on
the stock exchange compensation fund.

Ming Fung collapsed in May after its majority shareholder and
managing director Chan Kwong-hung was arrested in connection with
the alleged theft of clients' funds to cover loss-making
positions in his personal futures trading. Inquiries into the
allegations have reached an advanced stage and further action
might be taken in a month.  Initial investigations revealed that
a number of loans were transferred from the group's accounts to
people close to the firm. There were also indications that some
senior Ming Fung staff sold clients' stock without approval.


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


BANK SERVITIA: Delays Merger Plans After Profit Declines
--------------------------------------------------------
Bank Servitia (JSX:BUSV) delays its plan to merge with Bank
Central Dagang, Bank Hastin and Bank Prima Express. The merge
plan will be discussed again in the next nine months.  Bank
Servitia posted a significant decline in its 1H98 net profit to
Rp1.5 bln from Rp15.2 bln in 1H97.  (ANTARA and Asia Pulse 18-
Aug-1998)


PT GARUDA: May Sack Thousands of Employees
------------------------------------------
PT Garuda Indonesia is expected to sack thousands of its
employees under a rationalization plan expected to be implemented
during October-December, it was reported here.  A Garuda source
told Neraca daily that Garuda management had planned to dismiss
most of its employees. Garuda, which has a fleet of 58 aircraft,
has about 13,000 employees.  The existence of such a plan was
revealed when Garuda's general director Wiradharma Bagus Oka
summoned all department heads and personnel managers here last
week.

"In the three-hour meeting, the acting general director disclosed
Garuda's plan for restructuring in the area of manpower," the
source said here last week.  The source further said that at
least four criteria would be used by Garuda management to dismiss
its employees.

Firstly, employees who had made a mistake during the performance
of duties and the mistake was recorded in their curriculum vitae.
Secondly, employees who married employees within the company.
Thirdly, employees who had been employed with the company for
less than five years.  Fourthly, by reducing the retirement age
to 46 years for land employees and 50 years for flight employees.
Preparations for the restructuring started this week and each
department and personnel manager would be distributing circulars
from the board of directors on the policy about dismissal and
details, including the rights of dismissed employees.  (ANTARA
and Asia Pulse 18-Aug-1998)


=========
J A P A N  
=========


HITACHI LTD.: Moody's Lowers Long-Term Ratings a Notch
------------------------------------------------------
Moody`s Investors Service Inc. said it downgraded its long-term
debt rating for Hitachi Ltd. to double-A3 from double-A2.  The
rating action reflects Moody's concerns that Hitachi`s debt
protection will deteriorate amid the current severe operational
environment.  The rating outlook is negative.  Also, the long-
term debt ratings of Hitachi`s financially supported
subsidiaries, Hitachi America, Ltd., Hitachi International
(Holland) B.V., Hitachi Finance(UK)PLC. and Hitachi Asia Ltd.
were being lowered to double-A3 from double-A2. Hitachi 's
semiconductor business is expected to continue to suffer from
memory price declines in excess of its ability to reduce  
inventories.  Bloomberg reports that shares in Hitachi Ltd. (6501
JP) rose 10 yen to 800 notwithstanding the downgrade.  


LONG TERM: Sumitomo's LTCB Move May Receive State Funds
-------------------------------------------------------
A report published in the Hong Kong Standard says that according
to the interactive edition of the Yomiuri, the Japanese
government has decided to use funds originally earmarked for
protecting depositors to ensure that LTCB stays solvent as it
merges with Sumitomo.  This has come after record lows of LTCB's
shares upon rumors that Sumitomo may be getting cold feet as it
learns the extent of LTCB's bad loans. The two announced a merger
in June.  To receive the support, LTCB must this week present a
restructuring plan to cover steps to shut down money-losing
subsidiaries and cut back foreign operations.


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


A AND K: Company Liquidates
---------------------------
The A and K Trade Company advertised in the Korean language Maeil
Kyungje that the company filed for liquidation on August 7th.  
The creditors are to file their claims within two months from
today.  The company's address is 236-4,5 Nonhyun-dong, Kangnam-
gu, Seoul and the president is Mr. Kim Yong-gi.


DAEWOO GROUP: Half-Year Results of Operations
---------------------------------------------
Daewoo Group recorded a net loss of 205.6 billion won on sales of
27.7 trillion won and a debt-to-equity-ratio of 369.37 per cent.
Targeted for reform by the government of President Kim Dae-jung,
the Big Five will come up with plans for voluntary restructuring
by the end of this month.  They are to hammer out financial
details of the move with their creditor banks by the end of
December.


DONGBANG PEREGRINE: Fate to be Decided in October
-------------------------------------------------
The Korea Herald reports that the Financial Supervisory
Commission (FSC) should complete the first phase of its review of
DONGBANG PEREGRINE SECURITIES in October.  At that time, the
FSC's evaluation of Dongbang and three other brokerage houses
that failed to meet a 100 percent working capital ratio level
should be complete.  It will also be clear then which of these
four firms will face exit orders.  The capital ratio was minus
73.9 percent for Dongbang Peregrine.  Dongbang Peregrine
announced in July plans to increase paid-in capital.  However, it
is unclear if Dongbang's recapitalization plans will be
acceptable to the FSC.


DONGSUH FURNITURE: Completes Creditor Reconciliation
----------------------------------------------------
According to the Korean language Maeil Kyungje, Dongsuh Furniture
company completed its creditor reconciliation.  This company went
bankrupt on February 18 of this year.  Previously, Dongsuh
Furniture company was placed under a court receivership by the
Inchon District Court.  But the company was allowed to start a
creditor reconciliation procedure later and now completed the
procedure.


DURAE METEK: Company Liquidates
-------------------------------
According to the Korean language Maeil Kyungje's Business Brief
section, Durae Metek company was allowed to liquidate by the
Seoul District Court.


HYUNDAI GROUP: Half-Year Results of Operations
----------------------------------------------
The Hyundai Group posted a 455.5 billion won net loss over the
half-year period on sales of 35.5 trillion won.  Its debt-to-
equity ratio stood at 564.96 per cent. Targeted for reform by the
government of President Kim Dae-jung, the Big Five will come up
with plans for voluntary restructuring by the end of this month.  
They are to hammer out financial details of the move with their
creditor banks by the end of December.


HYUNDAI INDUSTRY: Completes Creditor Reconciliation Procedure
-------------------------------------------------------------
The Taechon District Court advertised in the Korean language
Maeil Kyungje that Hyundai Industry company has completed its
creditor reconciliation procedure.  The company's address is 483-
28 Yachon-ri, Kayagok-myun, Nonsan-shi and the president is Mr.
Chun Byung-sun.


KOREA LONG: Fate to be Decided in October
-----------------------------------------
The Korea Herald reports that the Financial Supervisory
Commission (FSC) should complete the first phase of its review of
Korea's brokerage houses in October.  At that time, the FSC's
evaluation of KOREA LONG TERM CREDIT BANK SECURITIES and three
other brokerage houses that failed to meet a 100 percent working
capital ratio level should be complete.  It will also be clear
then which of these four firms will face exit orders.  The
capital ratio was minus 4.8 percent for KLB Securities.  


LG GROUP: Half-Year Results of Operations
-----------------------------------------
LG Group posted a 283.6 billion won net loss on sales of 25
trillion.  Its debt-to-equity ratio reached 482.2 per cent.
Targeted for reform by the government of President Kim Dae-jung,
the Big Five will come up with plans for voluntary restructuring
by the end of this month.  They are to hammer out financial
details of the move with their creditor banks by the end of
December.


MANDO MACHINERY: Strike Hits Mando Machinery
--------------------------------------------
Workers at Mando Machinery began a strike Monday at its seven   
plants nationwide, according to a report published in the
ChosunIlbo.  With the strike at Hyundai and lack of orders at
Kia's Assan factory forcing a shutdown, the Korean auto industry
is now virtually at a stand still.  Union members called for the  
action to protest what they call management's unilateral layoffs
plan.  Mando supplies auto parts to practically all the country's
car manufacturers.  Kia is currently only operating its Sohari  
plant which only produces RVs, while Daewoo's production lines  
are running at 50%, with the exception of  its mini cars.

The Hong Kong Standard reported that Reuters says 4,500 workers
at Mando Machinery, a unit of the Halla Group and the country's
largest vehicle parts maker, went on strike in protest of the
company's plan to lay off redundant workers.  The company has not
clarified how many workers are redundant, but a union source said
1,500 staff would be laid off.

Mando, the Standard recalled, failed in December to honor
repayments of promissory notes as its creditors refused to roll
over loans. An official said the company is currently seeking
court protection and looking for foreign capital.


SAMSUNG GROUP: Half-Year Results of Operations
----------------------------------------------
Samsung Group recorded a 328.2 billion won net profit on sales of
35.5 trillion won, with a debt-to-equity ratio of 282.55 per
cent. Targeted for reform by the government of President Kim Dae-
jung, the Big Five will come up with plans for voluntary
restructuring by the end of this month.  They are to hammer out
financial details of the move with their creditor banks by the
end of December.


SHINDONGYANG MACHINERY: Starts Creditor Reconciliation Procedure  
----------------------------------------------------------------
The Taechon District Court advertised in the Korean language
Maeil Kyungje that the Shindongyang Machinery company was allowed
to start its creditor reconciliation procedure.  The creditors
have until September 19, 1998 to file their claims.  The
company's address is 77-1 Seongbuk-ri, Sunseong-myun, Tangjin-
gun, Chungnam, and the president is Mr. Sun Chung-ho.


SHINHWA FABRIC: Completes Creditor Reconciliation Procedure
-----------------------------------------------------------
The Seoul District Court advertised in the Korean language Maeil
Kyungje that the Shinhwa Fabric company has completed its
creditor reconciliation procedure.  The company's address is 210-
10 Sungsan-1 dong, Mapo-gu, Seoul and the president is Mr. Yi
Mun-ho.


SK GROUP: Half-Year Results of Operations
-----------------------------------------
SK Group recorded a net profit of 198.7 billion won on sales of
13.4 trillion won. Its debt-to-equity ratio stood at 329.32 per
cent. Targeted for reform by the government of President Kim Dae-
jung, the Big Five will come up with plans for voluntary
restructuring by the end of this month.  They are to hammer out
financial details of the move with their creditor banks by the
end of December.


SK SECURITIES: Fate to be Decided in October
--------------------------------------------
The Korea Herald reports that the Financial Supervisory
Commission (FSC) should complete the first phase of its review of
SK SECURITIES October.  At that time, the FSC's evaluation of SK
and three other brokerage houses that failed to meet a 100
percent working capital ratio level should be complete.  It will
also be clear then which of these four firms will face exit
orders.  The capital ratio was minus 62.7 percent for SK
Securities.  SK Securities announced in July plans to increase
its paid-in capital.  However, it is unclear if SK's
recapitalization plans will be acceptable to the FSC.


SSANGYONG INVESTMENT: Fate to be Decided in October
---------------------------------------------------
The Korea Herald reports that the Financial Supervisory
Commission (FSC) should complete the first phase of its review of
Korea's brokerage houses in October.  At that time, the FSC's
evaluation of SSANGYONG INVESTMENT & SECURITIES and three other
brokerage houses that failed to meet a 100 percent working
capital ratio level should be complete.  It will also be clear
then which of these four firms will face exit orders.  The Korea
Times reported that Ssangyong Investment & Securities originally
exceeded the FSC requirement, but the companies recapitalization
through the issuance of subordinate bonds was viewed as improper.  
Ssangyong Investment's capital ratio was later readjusted
downward to the minus 103.6 level.


TAESUNG CO.: Starts Creditor Reconciliation Procedure
-----------------------------------------------------
The Taechon District Court advertised in the Korean language
Maeil Kyungje that the Taesung company has been allowed to start
its creditor reconciliation procedure.  The creditors have until
September 12, 1998 to file their claims.  The company's address
is 1-14 Taehwa-dong, Taeduk-gu, Taechon and the president is Mr.
Kim Chung-sun.


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


CAPITOL BUSINESS: Members' Voluntary Winding-Up
-----------------------------------------------
A special resolution passed at an EGM held on 15.8.1998 resolved
that CAPITOL BUSINESS SERVICES (SEA) SDN.BHD. be wound up
voluntarily.  Creditors of the company are to submit their
claims/debts before 17.9.1998.


LANDMARKS BHD: Posts RM9,000,000 Six-Month Loss
-----------------------------------------------
Landmarks Bhd has posted a group pre-tax loss of 9 million
Malaysian ringgit for the six months ended June 30, compared with
a pre-tax profit of RM18.1 million in the year-earlier period.
Group turnover fell 14 per cent to RM104.6 million from RM121.6
million mainly due to lower contribution from PGK Sdn Bhd, the
group's property development company. On the company level, pre-
tax profit soared to RM18 million from RM598,000, while turnover
rose 90 per cent to RM43.4 million from RM22.9 million.

Landmarks said in a statement the group pre-tax loss was due to
an increase of 120 per cent in group interest expense from RM24
million to RM52.7 million and a drop of 81 per cent in PGK's
earnings.  The company said group performance for the second half
is not expected to improve unless the group manages to reduce its
borrowings.  (Business Times 18-Aug-1998)


SIN NAN: Members' Voluntary Winding-Up
--------------------------------------
A special resolution passed at an EGM held on 12.8.1998 resolved
that SIN NAN YEN SDN.BHD. be wound up voluntarily.  Creditors of
the company are to submit their claims/debts before 16.9.1998.


SUNGEI BAKAU: Petitions Court for Reduction to Capital
------------------------------------------------------
Sungei Bakau Realty Sdn. Bhd. Has petitioned for a court's order
to reduce its paid up share capital from RM63.840 million to
RM638,400-00.  The petition is directed to be heard on 24.8.1998.


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


DESERT FOX: Bus Operator Receives Debt Relief
---------------------------------------------
The Securities and Exchange Commission has approved the petition
of bus operator Desert Fox Transport Corp. to suspend debt
payments worth P208 million, according to a report in the Manila
Times.  The Novaliches, Quezon City-based Desert Fox is the first
bus firm to seek debt relief since the Asian financial crisis
erupted in July last year.  All claims against the company are
now suspended for 30 days.  The SEC has set a hearing for Sept.
16 to discuss the creation of a management committee or
rehabilitation receiver for the transport firm.

Desert Fox said its financial problems started in late 1995 when
25 of its 54 air-conditioned buses broke down causing months of
downtime.  That resulted in the company's failure to pay its
monthly amortizations.  Desert Fox said its problems multiplied
when the Land Transportation and Franching Regulatory Board
suspended its operations for a month after one of its buses
figured in an accident where seven passengers died and many were
injured. It said it lost P15 million as a result of the
suspension.  The bus firm also blamed the bus segregation scheme
hatched by the Metro Manila Development Authority along EDSA for
part of its losses.


=================
S I N G A P O R E
=================


KHONG GUAN: Reports S$4.5 million Second-Half Loss
--------------------------------------------------
Khong Guan Flour Milling's $952,000 net loss for the year ended
April 1998 was due to a second-half loss of $4.54 million.  The
company said yesterday that the poor results in the second half
were largely due to provisions -- $1.35 million for a fall in
value of short-term investments, $3.33 million for Indonesian
receivables in anticipation of the pessimistic scenario in view
of the May 1998 civil disturbances, and $177,000 for an insurance
claim.  Difficult trading conditions due to a shortage of cocoa
beans in Indonesia also played a role.  (Business Times 18-Aug-
1998)


SHOWPLA ASIA: Singapore Exchange Suspends Trading in Shares
-----------------------------------------------------------
Trading of Showpla Asia shares was suspended on the Singapore and
Osaka stock exchanges this week pending an announcement.  Showpla
Asia said in a statement yesterday that it had been in talks with
its bankers over "the continuing availability of bank
facilities".  The outcome of these discussions will be revealed
in the announcement.   

The mainboard-listed plastic injection-moulding company said it
would furnish information on Japanese parent Showa Plastics'
application for judicial management and, in particular, how it
would affect business.  It did not say when this announcement
will be made.  Meanwhile, the company will submit a report
required by the Securities and Exchange Law of Japan in view of
Showa Plastics'
application.  

Showpla Asia revealed last Friday that its Japanese parent had
filed for creditor protection, and that $20 million owed by it
might not be recoverable.  The company said that Showa Plastics'
application for "corporate reorganisation procedure" was
different from bankruptcy or receivership procedures, and that it
had sought to "revitalise and rehabilitate" the company.   Showa
Plastics said earlier that its outstanding liabilities totalled
17.77 billion yen (S$213.4 million).

Showpla Plastics holds a 33.07 per cent stake in Showpla Asia,
which posted a 51 per cent plunge in net earnings to $2.04
million for 1997.   Showpla Asia yesterday clarified that the
management accounts of the group as at June 30, 1998, were not
audited.  Showpla Asia was last traded at 6.5 US cents, near its
year's low of six cents and from a high of 17 US cents.  
(Business Times 18-Aug-1998)


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


ADVANCE AGRO: Posts Baht 1.85 Billion Second Quarter Loss
---------------------------------------------------------
Advance Agro PCL, Thailand's listed company, said it swung to a
second quarter net loss of 1.85 billion baht from a net profit of
70.3 million baht in th esame period a year before.  The pulp and
paper producer has roughly $650 million in foreign-currency
debts, but much of its earnings are from exports paid in dollars.


BANGKOK BANK: Depositors Make Run Before Merger with Krung
----------------------------------------------------------
Several branches of Bangkok Bank of Commerce have been hit by
deposit runs following the government's decision to merge the
ailing bank with state-owned Krung Thai Bank, according to
published reports.  In Trat, more than 200 people flocked to the
local BBC branch in the morning.  Half of them closed their
accounts and opened new ones with Krung Thai, which had set up a
temporary booth inside the branch.  A BBC branch executive said
clients withdrew at least 20 million baht.  Many were big
customers with more than one million baht each in their accounts,
and they were worried that they would lose interest.  Under the
government's reform package, the BBC yesterday ceased banking
operations and became an asset-management company to oversee non-
performing loans. Its performing assets, deposits and liabilities
were transferred to Krung Thai Bank. First Bangkok City Bank will
also be merged with Krung Thai.


BIJOUX HOLDINGS: News About Rehabilitation Plan
-----------------------------------------------
The Board of Directors for Bijoux Holdings Public Company Limited
advised the SET that (A) Mr. Thongman Pherkcheoy will now serve
as Managing Director and (B) Messrs. Ouysin Thongsri and Nirut          
Thongnarktong and Ms. Chalermporn Narsuwan will now serve as
Directors.  Since company new directors have just been appointed
new on August 16th, 1998 and we are now in the process of
auditing company assets, liabilities and contacting foreign
investors.  Therefore, the Company is not be able to fix the date
to submit a rehabilitation plan to the SET.


Q-ZONE: FSRA Sells Shares to International Engineering
------------------------------------------------------
The International Engineering Public Company Limited advised the
SET that, on 14 August 1998, it bought 1 million shares of Q-Zone
(Center) Company Limited for Baht 900,000 in cash which was
announced for bidding by Financial Sector Restructuring
Authority.  Q-Zone (Center) Company Limited sells mobile phones.


SIAM CITY: Rushing to Clean-Up Non-Performing Loans
--------------------------------------------------
Siam City Bank, the Bangkok Post reports, says it is moving
quickly to rehabilitate and restructure non-performing loans, now
at 48% of the 240 billion baht in credit outstanding.  By the end
of the month, the Financial Institutions Development Fund will
exchange 60 billion baht in outstanding loans for equity in the
bank. When combined with the 20 billion baht swapped by the Fund
last February, Siam City Bank's capital funds will become
sufficient to cover non-performing loans, president Sompoch
Intranukul told the Post.  

The bank's capital ratio would increase to 10% of outstanding
credit from 6%, sufficient for operations through 2000.  The
ratio limits the amount of loans that can be made, relative to a
bank's capital base.  The Bank of Thailand minimum is 8.5%.

"The main duty for management now is to strengthen the bank's
standing as much as possible, including rehabilitating non-
performing loans and maximising asset quality in preparation for
sale to new investors," Mr Sompoch was quoted as saying.   

Siam City Bank and Bangkok Metropolitan Bank are to be sold off
to new investors by the end of the year, under the financial-
reform plan announced by the government last Friday.  Both banks
will be recapitalised to improve their capital ratios to at least
8.5% by the end of the month, following full provisioning for
potential loan losses.  Mr Sompoch said the bank would establish
an asset-management company to take over non-performing loans. It
is now negotiating with foreign investors to take a stake in the
asset-management company.  He said loan customers would be
divided into four grades:

    (1) The first would be completed projects for which revenue
        was insufficient to cover interest.  The bank would help
        restructure loans or projects to improve revenues.

    (2) The second group would be incomplete projects, which the
        bank would help by restructuring debt, swapping debt for
        equity or inviting new partners.

    (3) The third group would include non-performing loans backed  
        by collateral such as land. The bank would seek to
        maximise revenues by renting or leasing the land.

    (4) The fourth group would consist of bad loans, on which the
        bank would file suit for foreclosure.

"Rehabilitating non-performing loans will help reduce the final
burden on the government," Mr Sompoch said. "The government has
committed to share with new investors any losses if asset quality
deteriorates in the future."  Paithoon Kijsamrej, senior vice-
president, said non-performing loans would also be divided by
sector, such as property, agriculture, commercial and industrial.
Executives said they would also focus on lowering the bank's
loan-to-deposit ratio from 177% to 150% by attracting more
deposits and maximising asset quality. Greater emphasis would be
paid to small and medium-sized enterprises in promising sectors
such as exports or agricultural goods.  Foreign-currency
borrowings would also be balanced against the bank's foreign-
denominated loans.

Mr Sompoch said the bank had $80 million in foreign debt due this
year. It has another $520 million outstanding through 2002
through a floating-rate certificate of deposit programme.  He
said interest rates for both loans and deposits would definitely
fall, with the bank no longer needing to compete for funds in
order to service its debt to the Fund.


TELECOM ASIA: Posts Baht 1.32 Billion Second Quarter Loss
---------------------------------------------------------
Telecom Asia PCL posted a second quarter net loss of 1.32 billion
baht, compared to a net loss of 886 million baht in the same
period last year.  The company said it swung to a net profit of
8.43 billion from a net loss of 1.33 billion baht for the year-
earlier period.  


THAI AIRWAYS: Posts Baht 4.3 billion Second Quarter Loss
--------------------------------------------------------
Thai Airways International Plc said that its net loss ballooned
to 4.3 billion baht in the three-month period ending June 30 due
to accounting changes and foreign exchange losses. In the nine
months to June, Thai said it recorded a net loss of 2.99 billion
baht compared with a profit 2.66 billion baht in the
corresponding period for the previous fiscal year.

Analysts surveyed by the Bangkok Post have suggested Asia's
financial woes may delay the further privatisation of THAI until
late this year.  The state-run airline had shown little progress
on the proposed sale of the 335 million new and existing shares
since the plan was approved by the cabinet in early June, they
said.  One brokerage analyst told the Post that he did not expect
the sale to take place before January because the government was
preoccupied with the privatisation of other state enterprises.
Other analysts suggested the sale might be delayed until the
government benefits from the issue of new sovereign bonds this
year.


THAI PETROCHEMICALS: Looking For New Investors
----------------------------------------------
The Leophairatana family, the founder and the largest shareholder
in Thai Petrochemical Industry (TPI) group, will reduce its stake
in a bid to attract new investors, according to a report
appearing in the Bangkok Post.  The group would welcome foreign
partners as major shareholders, chief executive Prachai
Leophairatana told the Post, easing his family's stand on
retaining 60% in one of the country's largest industrial groups.

TPI has US$3.8 billion in debts and this year faces 18.9 billion
baht in interest payments that have soared because of the
weakened baht.  The shrinking domestic market has compounded the
problem, the Post said.  

"We have to open up to foreign investors to stay in business," Mr
Prachai was quoted as saying, adding that TPI's debt
restructuring plan with its 140 creditors should be settled at
the end of October.   The restructuring hinged on TPI's ability
to reduce the group's stake in power supply and deep-sea port
management companies to a maximum of 25%.

Merrill Lynch (Asia-Pacific) is reportedly looking at the
possibility of new partners for TPI's cement business.  TPI has
postponed investment in TPIPL Power Ltd, the sponsor of a 300-
megawatt power plant in Saraburi, until new investors can be
found.  TPI Polene, the group's main cement company, has cut its
annual production capacity from nine million tons to five
million.  Previously, TPI Polene reduced stakes in Thai
Caprolactrum from 49% to 41.8% while Ube industries and Marubeni,
two Japanese partners, lifted their combined stake to 51%.  PTI
Polene has sold a 25% stake in Thai Nitrate to Dyno industries
AS of Norway, which now holds 50%.


THAI PETROCHEMICALS: Second Quarter Profits Announced
-----------------------------------------------------
Thai Petrochemical Industry (TPI) and TPI Polene reported
improved financial results in the first half of this year, thanks
to the export boost and foreign exchange gains.  TPI recorded a
net profit of 13,302 million baht, compared to 676 million baht
recorded in the same period last year.  The 246% jump in export
earnings to 4,299 million baht was a driving force behind the
profit increase. About 60% of sale revenues was derived from
plastic resin exports.  TPI Polene group's profit before foreign
exchange and interest payment in the first half soared 19% to
1,927 million baht.  Revenues rose 56% to 13,127 million baht
with foreign exchange gains of 5,045 million baht.  TPI's sales
revenue in the first half of the year jumped 92.97% to 23,375
million baht, a result of higher production and lower costs.  TPI
and TPI Polene have also placed greater emphasis on exporting
more of their production.  TPI Polene's exports of cement and
clinker in the second quarter of this year were valued at 270
million baht, close to the level in the first quarter.  (Bangkok
Post 18-Aug-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
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