/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/981201.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 Tuesday, December 1, 1998, Vol. 1, No. 197 Headlines * C H I N A & H O N G K O N G * ABLEMAN INVESTMAN LIMITED: Winding-up petition CENTURY CITY: Hang Lung in talks for assets of Century City CONCORDIA PAPER: Tons of paper pile up in Hong Kong ENFIELD CONSTRUCTION: Liquidations force write-off EVERWEAL TRADING LIMITED: Winding-up petition HWA KAY THAI: Shine United to take over Hwa Kay Thai INTERFORM CERAMICS: Interform offered $1.7b lifeline KPS RETAIL: Blockbuster to get part of KPS stores LEMEX (HONG KONG) LIMITED: Winding-up petition LI TAK SHOES MANUFACTORY LIMITED: Winding-up petition MAX CONCORD INVESTMENT LIMITED: Winding-up petition PAK TAK SHOES MANUFACTORY LIMITED: Winding-up petition PALADIN LIMITED: Results announcement SING TAO HOLDINGS: Sells 32% holding in Culturecom US GOURMET ICE CREAMS (ASIA) LIMITED: Winding-up petition WING MOU CONSTRUCTION: Liquidations force write-off YUE XIU ENTERPRISES: Rules out asset sales to cut debt * I N D O N E S I A * INDOCEMENT TUNGGAL PRAKARSA: Debt restructuring by April * J A P A N * LONG TERM CREDIT: GE Capital in move on lease arm of LTCB NOMURA SECURITIES: Nomura's long-term debt downgraded * K O R E A * CHO HUNG BANK: Chief axed in government ordered shake-up DAEWOO: Government says banks may cut loans to chaebols DONG-A TV: Dong-A TV applies for bankruptcy HANGIL MERCHANT: To be de-listed from stock exchange HANJOO ELECTRONICS: To be de-listed from stock exchange HANYANG CO: Receiver suspected of getting improper rebates HYUNDAI: Government says banks may cut loans to chaebols KIA MOTORS: Hyundai will buy Kia despite doubts on debts KISAN COMPANY: To be de-listed from stock exchange LG: Government says banks may cut loans to chaebols SAEHAN MERCHANT: To be de-listed from stock exchange SAMSUNG: Government says banks may cut loans to chaebols SK: Government says banks may cut loans to chaebols TAE YANG E&TECH: To be de-listed from stock exchange TONG-IL GROUP: Affiliates too weak for workout program * M A L A Y S I A * ALLIED SCOPE (SOUTHERN) SDN BHD: Winding-up petition AOKAM PERDANA: Foreign creditors take over Aokam Perdana HICOM HOLDINGS: RAM reviews Hicom bonds, Munif ratings NM BACKER COMMUNICATIONS SDN BHD: Winding-up petition ORIENT SAGA SDN BHD: Voluntary winding-up * P H I L I P P I N E S * PHILIPPINE LONG DISTANCE: Estrada defends take over VITARICH: Restructuring almost complete * T H A I L A N D * BANGKOK RATCHADA: Creditors of defunct firm plan meeting NAKORNTHAI STRIP: Nakornthai credit rating downgraded UNITED COMMUNICATION: Ucom to delve into debt restructure ================================= C H I N A & H O N G K O N G ================================= ABLEMAN INVESTMAN LIMITED: Winding-up petition ---------------------------------------------- Notice is hereby given that a petition for the winding-up of Ableman Investman Limited by the High Court of Hong Kong was, on the 22nd day of October, 1998, presented to the said Court by The Hong Kong Special Administrative Region and the petition is heard on 22nd of October, 1998. Other creditors who support or oppose the making of the order may appear at the time of the hearing. CENTURY CITY: Hang Lung in talks for assets of Century City ----------------------------------------------------------- According to the South China Morning Post, Hang Lung Development is in discussion with Standard Asia, which is acting as financial adviser to Century City International Holdings, over a possible acquisition of the financially- troubled group's assets. Following widespread speculation property tycoons Chen Din- hwa and Li Ka-shing were interested in acquiring the assets of Paliburg Holdings, Hang Lung chairman Ronnie Chan Chi- chung said yesterday there was a meeting with the bank but he could not disclose more details. Last week Mr Li denied the rumors. CONCORDIA PAPER: Tons of paper pile up in Hong Kong --------------------------------------------------- AP Online reports about 5,000 tons of paper have piled up around Hong Kong following the bankruptcy of a paper recycler earlier this month, a newspaper reported Saturday. Schools have been told to dump 40 tons of paper that was originally intended for recycling by failed Concordia Paper, the South China Morning Post reported. "It's sad news, but there's no alternative but to stop the program," the director of Better Environment Hong Kong, Steve Choi, was quoted as saying. "There's no export market and now there's no local recycler paper is just piling up at the port," he said. Meanwhile, 10 potential buyers were in talks to buy the recycling factory, Alan Tang of its receiver, KPMG Peat Marwick, told the Post. Concordia Paper closed after the price of recycled paper plummeted, making it unable to cover the costs of collecting and handling the paper. More than 400 workers lost their jobs at the company. ENFIELD CONSTRUCTION: Liquidations force write-off -------------------------------------------------- According to the South China Morning Post, medium sized contractors Wing Mou Construction and Enfield Construction went into liquidation following the withdrawal and suspension of a bank facility which was triggered by bribery allegations. On Nov 24, the Independent Commission against Corruption arrested three directors and staff of the companies for allegedly paying bribes of $30 million to a Government clerk in the past 11 months. The next day, the debtors withdrew and froze the companies' bank facilities and demanded immediate loan payment. Their failure to pay forced both companies into liquidation. Property developer Winsor Properties Holdings has been forced to make an extra $160.2 million provision for debts receivable after the collapse of two debtors, taking total provisions to $190.2 million. Winsor said although its loans to the debtors were secured, a major portion of them would be unlikely to recover. The company said those arrested and their debtors were unrelated to Winsor, and the liquidations would not have any material impact on Winsor's financial position. EVERWEAL TRADING LIMITED: Winding-up petition --------------------------------------------- Notice is hereby given that a petition for the winding-up of Everweal Trading Limited by the High Court of Hong Kong was, on the 26th day of October, 1998, presented to the said Court by Leung Tai Chuen and the petition is heard on 9th day of December, 1998. Other creditors who support or oppose the making of the order may appear at the time of the hearing. HWA KAY THAI: Shine United to take over Hwa Kay Thai ---------------------------------------------------- According to the South China Morning Post, control of Hwa Kay Thai, owned about 49 per cent by Wong Chue-meng and his family and hit by a $2.51 billion net loss last year, is to change hands after the proposed issue of new shares equivalent to 57.4 per cent of the group's capital. Patrick Wong, through his wholly-owned Shine United, will pay $60 million for the stake through a deal reached on Nov 21. Under the agreement, Hwa Kay Thai proposes to cut its share capital to $0.01 each from $0.50 each. Shine United would then subscribe for new shares. The deal's completion depends on a compromise agreement with its creditors and principal creditor Puma A G and Yee Hing Co. INTERFORM CERAMICS: Interform offered $1.7b lifeline ---------------------------------------------------- According to the South China Morning Post, financially- troubled tile-maker Interform Ceramics Technologies has been offered a rescue deal of $1.7b in asset and cash injections by privately run China Wealth Group owned by a 31-year-old mainland economist and businessman Lam Chung- yan. Interform said the deal, subject to approval of shareholders and the stock exchange, would make China Wealth Group its largest shareholder with not less than 75 per cent of a new company. The new company will be incorporated in Bermuda and will become the holding company for Interform by way of a share swap on a one-for-one basis. The package of proposals announced yesterday include listing the new company on the exchange by way of an introduction following the withdrawal of Interform's own listing. Interform said China Wealth had agreed to inject $100 million in cash through a subscription of 5 per cent per annum fixed-rate convertible notes redeemable in 2002 for shares in the new company. China Wealth had also agreed to inject $1.6 billion in assets into the new company including operations manufacturing and selling ceramic tiles as well as production machinery and accessories. The asset injection will be done by issuing 9.6 billion shares in the new company and a $640 million 5 per cent per annum fixed-rate convertible not redeemable in 2002. Interform said that the deal would automatically terminate if not executed by this Saturday. The proposals have won approval in principle from a number of bank creditors. Interform also revealed yesterday its plans to restructure and settle $807 million in debts owed to creditors by a mixture of a cash repayment of five cents in every dollar, the issue of fixed-rate convertible notes and a share placement. The company's financial problems emerged in August last year when it revealed an attributable loss of $460.6 million in the year to March last year and said it was in talks with creditors to freeze repayments. KPS RETAIL: Blockbuster to get part of KPS stores ------------------------------------------------- The Asian Wall Street Journal reports that Ernest & Young, the appointed liquidator of the KPS Retail Stores Ltd., have reached an agreement for Blockbuster Inc. to acquire parts of the failed video-rental chain. Blockbuster, a unit of Viacom Inc. has exclusive rights to complete negotiations within 30 days to acquire some of KPS inventory and store leases. The report also stated that the debt level of KPS is still uncertain, but that liquidators intend to keep the debt with KPS as it is liquidated. KPS, Hong Kong's leading video-rental chain, acknowledged financial troubles last June when it announced that customers would have a limited time to redeem prepaid video rental coupons. This move drew an angry response from customers, and four of them succeed in having their claims upheld by an October 23 ruling in a Hong Kong small claim tribunal. This court action was expected to trigger many more such suits against KPS, and lead to KPS filing for receivership. KPS's problems were also due to the proliferation of low- cost pirated video compact disks as well as a July, 1997 law that limited the distributors through which videos could be imported into Hong Kong. Under this law, companies can only import copyrighted goods through authorized distributors. LEMEX (HONG KONG) LIMITED: Winding-up petition ---------------------------------------------- Notice is hereby given that a petition for the winding-up of Lemex (Hong Kong) Limited by the High Court of Hong Kong was, on the 27th day of October, 1998, presented to the said Court by Cheung Yik Kuen and the petition is heard on 9th day of December, 1998. Other creditors who support or oppose the making of the order may appear at the time of the hearing. LI TAK SHOES MANUFACTORY LIMITED: Winding-up petition ----------------------------------------------------- Notice is hereby given that a petition for the winding-up of Li Tak Shoes Manufactory Limited by the High Court of Hong Kong was, on the 10th day of November, 1998, presented to the said Court by Hui Hon Lam and the petition is heard on 16th day of December, 1998. Other creditors who support or oppose the making of the order may appear at the time of the hearing. MAX CONCORD INVESTMENT LIMITED: Winding-up petition --------------------------------------------------- Notice is hereby given that a petition for the winding-up of Max Concord Investment Limited by the High Court of Hong Kong was, on the 30th day of October, 1998, presented to the said Court by Waldo Development Company Limited and the petition is heard on 9th of December, 1998. Other creditors who support or oppose the making of the order may appear at the time of the hearing. PAK TAK SHOES MANUFACTORY LIMITED: Winding-up petition ------------------------------------------------------ Notice is hereby given that a petition for the winding-up of Pak Tak Shoes Manufactory Limited by the High Court of Hong Kong was, on the 10th day of November, 1998, presented to the said Court by Hui Hon Lam and the petition is heard on 16th day of December, 1998. Other creditors who support or oppose the making of the order may appear at the time of the hearing. PALADIN LIMITED: Results announcement ------------------------------------- Paladin Limited announced its interim net loss widened but it hopes the redevelopment of its property can he to bring more profit in future. The company announced a net loss of $189.1 million or the six months to June 1998. This figure represents about twice the net interim loss for the same period last year of $91.8 million. However, turnover increased by 1 per cent to $338.8 million for the same period. SING TAO HOLDINGS: Sells 32% holding in Culturecom -------------------------------------------------- According to the South China Morning Post, Sing Tao said yesterday it would raise $21 million from the sale of a 32 per cent stake in Culturecom Holdings to an Australian listed company called ViaGold Capital which was called Aestar Investment (International) until a transformation earlier this year. It is one of a string of China plays to list in Australia in recent years. ViaGold is chaired by Zhang Yonglinger and Sing Tao said it was not connected with Sing Tao or Culturecom directors. It will not make a general offer and will nominate two representatives to the Culturecom board to raplaced chairman Tang Lap-yan and John Wilkinson. Sing Tao said the current management services agreement between Sing Tao and Culturecom would also be terminated on completion of the deal tomorrow. Yesterday's statement reiterated comments on Friday that discussions for Ms Aw to sell part or all of her 50.04 per cent holding in Sing Tao were at a considerably more advanced stage with one potential buyer than with the others. According to the Hong Kong Standard, the agreement has been reached with Chamberlin Investments, a wholly-owned subsidiary of ViaGOLD Capital the main business of which is the development of a 22-square kilometer high-tech science park on the outskirts of Beijing. Chamberlin would nominate two directors - Cheung Wai-tung and Joseph Hau Leung-hui. Sing Tao said it intended to retain the remaining shareholding interest in Culturecom. The Securities and Futures Commission ruled that Chamberlin would not be required to make a mandatory general offer. Culturecom said its existing principal business activities of printing and publishing will continue. US GOURMET ICE CREAMS (ASIA) LIMITED: Winding-up petition --------------------------------------------------------- Notice is hereby given that a petition for the winding-up of US Gourmet Ice Creams (Asia) Limited by the High Court of Hong Kong was, on the 27th day of October, 1998, presented to the said Court by Hong Kong and Shanghai Banking Corporation and the petition is heard on 2nd of December, other creditors who support or oppose the making of the order may appear at the time of the hearing. WING MOU CONSTRUCTION: Liquidations force write-off --------------------------------------------------- According to the South China Morning Post, medium sized contractors Wing Mou Construction and Enfield Construction went into liquidation following the withdrawal and suspension of a bank facility which was triggered by bribery allegations. On Nov 24, the Independent Commission against Corruption arrested three directors and staff of the companies for allegedly paying bribes of $30 million to a Government clerk in the past 11 months. The next day, the debtors withdrew and froze the companies' bank facilities and demanded immediate loan payment. Their failure to pay forced both companies into liquidation. Property developer Winsor Properties Holdings has been forced to make an extra $160.2 million provision for debts receivable after the collapse of two debtors, taking total provisions to $190.2 million. Winsor said although its loans to the debtors were secured, a major portion of them would be unlikely to recover. The company said those arrested and their debtors were unrelated to Winsor, and the liquidations would not have any material impact on Winsor's financial position. YUE XIU ENTERPRISES: Rules out asset sales to cut debt ------------------------------------------------------ According to the South China Morning Post and the Hong Kong Standard, Yue Xiu Enterprises (Holdings) yesterday denied plans for massive asset sales or other fund-raising exercises to reduce debts. Speaking after a special shareholders' meeting to approve the sale of its 51 per cent interest in Shaanxi's Xian- Lintong Expressway to Hong Kong-listed arm GZI Transport, Yue Xiu chairman Liu Jinxiang denied the sale was aimed at relieving financial pressure on its parent, saying that if this was so, it would not have allowed half the 204 million yuan consideration to be settled by issue of convertible bonds. Mr Liu said Yue Xiu would not be affected by the mainland's policy of separating government from business as it had been incorporated in Hong Kong. Also, the policy did not mean a clean break between the government and enterprises. He stressed the group would remain the window company of the municipal government and continued to receive its support. According to the South China Morning Post, Mr Liu said the company would also not be affected by liquidity problems at Guangdong International Trust and Investment as the two did not have any substantial dealings. According to the Hong Kong Standard, Mr Liu said the group had suffered a credit squeeze following Gitic's squeeze but with some $1.5 billion cash on hand for Guangzhou Investment and 4460 million for GZI Transport, the group is unlikely to face any immediate financing pressure. He also said the group would continue to expand its businesses. According to the South China Morning Post, Yue Xiu vice- chairman Guo Peinan said the group had plans for meeting debt obligations in place until the middle of next year. The company said its flagship listed arm Guangzhou Investment had $1.5 billion cash with net gearing of 31 per cent while GZI Transport had about $460 million and net gearing of 15 per cent. ================= I N D O N E S I A ================= INDOCEMENT TUNGGAL PRAKARSA: Debt restructuring by April -------------------------------------------------------- Indonesia's biggest cement maker, Indocement Tunggal Prakarsa, said it expected to restructure its debts y April, and planned to sell some non-core businesses to raise cash. "The process is expected to be completed by April 1999," the company said. It had said in August it expected to restructure its debts by year-end. Indocement said lenders had appointed Bank of America as chairman of a steering committee to oversee the restructuring process, during which interest and principal will not be paid. ========= J A P A N ========= LONG TERM CREDIT: GE Capital in move on lease arm of LTCB --------------------------------------------------------- According to the South China Morning Post, industry sources said yesterday that GE Capital Service Corp is in talks to buy the leasing business of Japan Leasing Corp - one of three non-bank affiliates of the failed LTCB - in a deal estimated at 700 billion yen. GE also planned to acquire Japan Leasing Auto Corp, a wholly owned subsidiary of Japan Leasing. The price will be decided after a scrutiny of the assets. The two companies were planning to conclude the negotiations by Dec 20, as said by the daily, quoting a financial source. Japan Leasing would pay loans from financial institutions with proceeds from the deal, while seeking to rehabilitate its real estate business, which was saddled with huge bad loans. The Tokyo District Court is expected to approve today Japan Leasing's restructuring plan to begin its rehabilitation process. According to the Hong Kong Standard, GE may offer 900 billion yen for the leasing operations of Japan Leasing. Japan Leasing in September filed for protection from creditors. The deal would allow it to focus on rehabilitating its real estate finance operation, which is weighed down with bad loans, as reported on the Nihon Keizai newspaper. GE Capital has operated in Japan since 1994, offering shipping container and auto leasing, consumer credit cards, insurance and other services. NOMURA SECURITIES: Nomura's long-term debt downgraded ------------------------------------------------------ The Asian Wall Street Journal reports that the Japan Rating & Investment Information Inc. has downgraded its long-term debt rating on Nomura Securities Company from AA to A+. The downgrade affects 250 billion yen of straight bonds and 70 billion yen of unsecured convertible bonds. Nomura's commercial paper rating was also reduced from A1+ to A1. Nomura's overseas units were recently hit badly by the Russian financial crisis, and the company has reported first half year pre-tax loss of 2.318 trillion yen in consolidated terms. ========= K O R E A ========= CHO HUNG BANK: Chief axed in government ordered shake-up -------------------------------------------------------- The Korea Herald reported that the president and two executive directors of the Cho Hung Bank tendered their resignations after the Financial Supervisory Commission (FSC) ordered a management reshuffle. The move came after the bank failed to generated any tangible results so far in its efforts to reform. The FSC also ordered the bank to submit a new re- capitalization plan by the end of the year, and to sell off its financial subsidiaries to improve its financial status. This article also reports that the bank has thus far been unable to attract badly needed foreign capital, or to merge with local competitors. The FSC, Korea's financial watchdog institution, established an evaluating committee in June to diagnose 12 commercial banks (including Cho Hung) which failed to meet the minimum 8 percent capital adequacy requirements set by the Bank for International Settlements (BIS). It issues closure order for five banks in late June, and has asked 7 other banks (including Cho Hung) to provide drastic self rehabilitation plans. These plans were to include payroll cuts, management layoffs, capital increases or decreases, and mergers with stronger banks. The FSC reportedly plans to keep alive only those banks that are able to meet the 8 percent BIS capital adequacy ratio by June, 2000 via these new rehabilitation plans. According to statistics published earlier, Cho Hung's BIS ratio was listed at 1.49 percent. DAEWOO: Government says banks may cut loans to chaebols ------------------------------------------------------- The Korea Herald reported that the government is detailing steps to reform Korea's largest family owned conglomerates (or chaebols) that may result in the suspension of new loans to the heavily indebted groups. The top economic adviser to Korean President Kim Dae-jung announced guidelines that the government intends to use for its corporate restructuring efforts. These guidelines include a requirement for each chaebol to conclude an agreement with its creditor banks on how to improve its financial situation. The chaebol-bank agreements must be concluded by the end of next month and implemented in 1999. The agreements should outline plans for the chaebols to sell-off non-core businesses and real estate assets. According to Kang Bong-kyun, President Kim's economic adviser, if the chaebols do not abide by the agreements, they will get no more new loans from the banks. The chaebol-bank agreements will also be structured so that a chaebol's creditor banks are able to take group action. The article further noted that the debt-to-equity ratio for the nation's largest chaebols now ranges from 370 to 570 percent. DONG-A TV: Dong-A TV applies for bankruptcy -------------------------------------------- The Korean language Maeil Kyungje reports that Dong-A TV has applied for bankruptcy. Dong-A TV (also know as Dong Ah TV) suspended broadcasting on October 31. Dong-A TV (cable TV channel 34) targeted women viewers, and plans to change the channel into a home shopping channel did not succeeded. According to an earlier report in the Maeil Kyungje, the Dong Ah Group decided to liquidate its affiliate Dong-A TV and its program provider, Dabicon. Last year, Dong-A TV had a 600 million won deficit making the company's total losses reach 34.3 billion won, exceeding the company's assets of 25 billion won. According to the Korea Times report, since the launching of cable channels in Korea in 1995, this is the first station that actually stopped its operations. HANGIL MERCHANT: To be de-listed from stock exchange ---------------------------------------------------- The Asian Wall Street Journal reports that Hangil Merchant Banking Corporation will be de-listed from the Korea Stock Exchange as of January 16, 1999 since it has either started liquidation procedures or has had its license canceled. HANJOO ELECTRONICS: To be de-listed from stock exchange ------------------------------------------------------- The Asian Wall Street Journal reports that Hanjoo Electronics Company will be de-listed from the Korea Stock Exchange as of January 16, 1999 since it has either started liquidation procedures or has had its license canceled. HANYANG CO: Receiver suspected of getting improper rebates ---------------------------------------------------------- The Korean language Maeil Kyungje reports that the Seoul Public Prosecutor's Office suspects that the court receiver of the Hanyang Co. has received improper rebates from the company's insurers. Mr. Yi Chi-un reportedly accepted 600 million won in total from 8 different insurance companies over the past two years. The prosecutor's office has not filed a formal charge as Mr. Yi is not considered a flight risk and it does not appear that he has used this money for personal purposes. HYUNDAI: Government says banks may cut loans to chaebols -------------------------------------------------------- The Korea Herald reported that the government is detailing steps to reform Korea's largest family owned conglomerates (or chaebols) that may result in the suspension of new loans to the heavily indebted groups. The top economic adviser to Korean President Kim Dae-jung announced guidelines that the government intends to use for its corporate restructuring efforts. These guidelines include a requirement for each chaebol to conclude an agreement with its creditor banks on how to improve its financial situation. The chaebol-bank agreements must be concluded by the end of next month and implemented in 1999. The agreements should outline plans for the chaebols to sell-off non-core businesses and real estate assets. According to Kang Bong-kyun, President Kim's economic adviser, if the chaebols do not abide by the agreements, they will get no more new loans from the banks. The chaebol-bank agreements will also be structured so that a chaebol's creditor banks are able to take group action. The article further noted that the debt-to-equity ratio for the nation's largest chaebols now ranges from 370 to 570 percent. KIA MOTORS: Hyundai will buy Kia despite doubts on debts -------------------------------------------------------- The Korea Times reported that the creditors of the bankrupt Kia Motors Company and its sister bus and truck maker the Asia Motors Company will write off 219.4 billion additional won in debt in return for Hyundai purchasing the two auto makers. This amount was decided after the audit management office in charge of the sale of these auto makers conducted an in-depth review of the assets and liabilities of these companies. This debt represents additional Asia Motors liabilities uncovered by Hyundai, and is greater than 10 percent of the debt of Asia Motors reported when the company was put up for action. Under to formula used in the bidding agreements, if either extra debt or asset shortage were uncovered which totals to 10 percent of stated net assets in the auction held last month, the creditors would write-off additional debts. The president of Hyundai Motors was quoted as saying that although they were not fully satisfied with the decision of the bidding secretariat, Hyundai will still sign the contract on December 1 transferring ownership of these two auto makers Hyundai. Hyundai will then commence negotiations with creditor financial institutions about the receipt of additional loan extensions for the purpose of normalizing the auto makers. KISAN COMPANY: To be de-listed from stock exchange -------------------------------------------------- The Asian Wall Street Journal reports that will be de- listed from the Korea Stock Exchange as of January 16, 1999 since it has either started liquidation procedures or has had its license canceled. LG: Government says banks may cut loans to chaebols --------------------------------------------------- The Korea Herald reported that the government is detailing steps to reform Korea's largest family owned conglomerates (or chaebols) that may result in the suspension of new loans to the heavily indebted groups. The top economic adviser to Korean President Kim Dae-jung announced guidelines that the government intends to use for its corporate restructuring efforts. These guidelines include a requirement for each chaebol to conclude an agreement with its creditor banks on how to improve its financial situation. The chaebol-bank agreements must be concluded by the end of next month and implemented in 1999. The agreements should outline plans for the chaebols to sell-off non-core businesses and real estate assets. According to Kang Bong-kyun, President Kim's economic adviser, if the chaebols do not abide by the agreements, they will get no more new loans from the banks. The chaebol-bank agreements will also be structured so that a chaebol's creditor banks are able to take group action. The article further noted that the debt-to-equity ratio for the nation's largest chaebols now ranges from 370 to 570 percent. SAEHAN MERCHANT: To be de-listed from stock exchange ---------------------------------------------------- The Asian Wall Street Journal reports that Saehan Merchant Banking Corporation will be de-listed from the Korea Stock Exchange as of January 16, 1999 since it has either started liquidation procedures or has had its license canceled. SAMSUNG: Government says banks may cut loans to chaebols -------------------------------------------------------- The Korea Herald reported that the government is detailing steps to reform Korea's largest family owned conglomerates (or chaebols) that may result in the suspension of new loans to the heavily indebted groups. The top economic adviser to Korean President Kim Dae-jung announced guidelines that the government intends to use for its corporate restructuring efforts. These guidelines include a requirement for each chaebol to conclude an agreement with its creditor banks on how to improve its financial situation. The chaebol-bank agreements must be concluded by the end of next month and implemented in 1999. The agreements should outline plans for the chaebols to sell-off non-core businesses and real estate assets. According to Kang Bong-kyun, President Kim's economic adviser, if the chaebols do not abide by the agreements, they will get no more new loans from the banks. The chaebol-bank agreements will also be structured so that a chaebol's creditor banks are able to take group action. The article further noted that the debt-to-equity ratio for the nation's largest chaebols now ranges from 370 to 570 percent. SK: Government says banks may cut loans to chaebols --------------------------------------------------- The Korea Herald reported that the government is detailing steps to reform Korea's largest family owned conglomerates (or chaebols) that may result in the suspension of new loans to the heavily indebted groups. The top economic adviser to Korean President Kim Dae-jung announced guidelines that the government intends to use for its corporate restructuring efforts. These guidelines include a requirement for each chaebol to conclude an agreement with its creditor banks on how to improve its financial situation. The chaebol-bank agreements must be concluded by the end of next month and implemented in 1999. The agreements should outline plans for the chaebols to sell-off non-core businesses and real estate assets. According to Kang Bong-kyun, President Kim's economic adviser, if the chaebols do not abide by the agreements, they will get no more new loans from the banks. The chaebol-bank agreements will also be structured so that a chaebol's creditor banks are able to take group action. The article further noted that the debt-to-equity ratio for the nation's largest chaebols now ranges from 370 to 570 percent. TAE YANG E&TECH: To be de-listed from stock exchange ---------------------------------------------------- The Asian Wall Street Journal reports that Tae Yang E&Tech Company will be de-listed from the Korea Stock Exchange as of January 16, 1999 since it has either started liquidation procedures or has had its license canceled. TONG-IL GROUP: Affiliates too weak for workout program ------------------------------------------------------ The Korean language Maeil Kyungje reports that 4 Tong-il Group affiliates decided to apply for court receivership this week. These affiliates' workout procedures were recently suspended. The four affiliated affected are Hanguk Titanium Company, Ilshin Stone Material Company, Ilsung Construction Company, and Tong-il Heavy Industry Company. The group's president Mr. Park Heung-cho has said that upon the approval of court receivership, the group plans to sell their real estate holding and dispose of their non- profitable businesses. The Korean language Maeil Kyungje earlier reported that the 4 Tong-il Group affiliates were excluded from the group's workout program. This decision was made by the group's creditors reportedly at the urging of the Korean government's Corporate Restructuring Committee (Kiop-kujo-jojong-uiwonhoe). The article also indicated that this was the first time companies have had their workout procedure suspended. This action also means that the debt payment delays associated with the procedure have now been canceled. =============== M A L A Y S I A =============== ALLIED SCOPE (SOUTHERN) SDN BHD: Winding-up petition ---------------------------------------------------- Eng Joo Hardware Sdn Bhd on 17/9/98 petitioned for the winding-up of Allied Scope (Southern) Sdn Bhd. The petition is directed to be heard on 15/1/99. AOKAM PERDANA: Foreign creditors take over Aokam Perdana -------------------------------------------------------- The Asian Wall Street Journal reported that Aokam Perdana Bhd., a Malaysian timber company under court protection, has signed a deal to restructure payment on $125 million Eurobonds which effectively allows its creditors to take over the company. The bonds, 80 percent of which are owned by Credit Suisse First Boston (Hong Kong), will reportedly be converted into equity. An additional 38 million ringgit in new financing will be raised by Credit Suisse. It was reported last July that Aokam had defaulted on $4.3 million payments of interest on a $135 million bond. Aokam is also the guarantor of loans taken out by its subsidiaries, Aokam Industries Sdn. Bhd. and Pembangunan Papan Lapis (Sabah) Sdn. Bhd. which have also defaulted on 33.3 million ringgit ($8.1 million) in payments. HICOM HOLDINGS: RAM reviews Hicom bonds, Munif ratings ------------------------------------------------------ Singapore Business Times reports Hicom Holdings Bhd's RM950 million redeemable secured bonds (1996/2001) and RM500 million Murabahah Underwritten Notes Issuance Facility (1997/2002) (Munif)'s BBB2 and P3 ratings have been reviewed and reaffirmed by Rating Agency Malaysia (RAM). RAM, in a statement, said that the ratings are premised on Hicom's propitious debt structure, a large portion of which are low-coupon and long term in nature which helped cushion the impact of interest rate increases in the first eight months of 1998. The proposed sale of Hicom's 36.03 per cent equity stake in Kedah Cement Holdings Bhd is viewed positively as cash proceeds from the sale to be deposited in an escrow account will enhance security value of the bonds, RAM added. In addition, Hicom's shareholdings in Perusahaan Otomobil Nasional Bhd (Proton) and Edaran Otomobil Nasional Bhd (EON) which have a total market value of around RM1.1 billion would afford it flexibility to raise funding. Even though these shares are currently pledged as security for the bonds, disposal of these shares for cash in an arrangement similar to the proposed sale of the Kedah Cement stake cannot be ruled out, RAM said. These positives are balanced by the lacklustre performance and weak demand outlook for the automotive sector which Hicom is heavily exposed to. The group's businesses in the property development and services sector are not expected to contribute any significant cash return as they are either adversely affected by the current recession or in their early stages of development. RAM added that as share prices remained depressed during the review period, the market value of shares pledged for the bonds continued to be lower than the minimum 1.66 times security coverage required under the trust deed for the bonds. Rating-linked covenant for the RM500 million Munif has also been breached when the rating for the facility was downgraded to P3 in June 1998. RAM explained that these breaches of covenants represent event of default/cancellation and technically, both the bonds and Munif could be immediately payable if so requested by the bondholders/underwriters. Hicom does not have sufficient cash reserves to redeem the bonds nor the Munif if these private debt securities are called for early redemption. NM BACKER COMMUNICATIONS SDN BHD: Winding-up petition ----------------------------------------------------- Hong Leong Finance Bhd on 12/10/98 petitioned for the winding-up of NM Backer Communications Sdn Bhd. The petition is directed to be heard on 13/1/99. ORIENT SAGA SDN BHD: Voluntary winding-up ----------------------------------------- The members of Orient Saga Sdn Bhd on 20/11/98 resolved to wind-up the company voluntarily. Creditors are requested to submit their claims before 30/12/98. ===================== P H I L I P P I N E S ===================== PHILIPPINE LONG DISTANCE: Estrada defends take over --------------------------------------------------- Philippine President Joseph Estrada on Saturday defended Hong Kong-based First Pacific Co. Ltd's 750-million-dollar buy-in to Philippine Long Distance Telephone Co. (PLDT) as a "positive sign," according to Agence France-Presse. "What is wrong with the deal? As long as it does not violate the law limiting foreign ownership to 40 percent ... I don't see anything wrong with that," Estrada said in his weekly radio show. Estrada added that First Pacific's acquisition of 17.2 percent of PLDT, the country's main telecommunications carrier, was an example of a much-needed long-term foreign investment and not mere short-term portfolio investment. "This is a positive sign. In the first place, we have been doing everything to attract foreign investors," Estrada added. On Wednesday, just after First Pacific announced its deal with PLDT that gave it management control of the company, several congressmen and senators said they would call an investigation into the agreement. The legislators have cited possible foreign control of a major industry as well as national security concerns as reasons for their probe. VITARICH: Restructuring almost complete --------------------------------------- A BusinessWorld report says nearly all of the 12 creditor- banks of poultry-based food producer Vitarich Corp. have agreed to the company's debt restructuring proposal. A highly placed source from the company told BusinessWorld last Friday that the restructuring, involving Vitarich's three-billion Philippine peso (PhP) loan, is "almost complete." "The debt restructuring is 97% complete. This means that 97% of the PhP3 billion will now be restructured since almost all of the banks have agreed on the proposal. The remaining 3% are the two banks which have yet to give their approval," the source said. The banks who agreed to the company's plan are: Philippine Commercial International Bank, Metropolitan Bank annd Trust Co., Philippine National Bank, Far East Bank and Trust Co., Land Bank of the Philippines, Solidbank Corp., Bank of Commerce, Rizal Commercial Banking Corp., Philippine Banking Corp., and Standard Chartered Bank. The official said the Bank of the Philippine Islands and Union Bank of the Philippines have not yet agreed on the management's proposal. =============== T H A I L A N D =============== BANGKOK RATCHADA: Creditors of defunct firm plan meeting -------------------------------------------------------- The Bangkok Post reports a committee representing creditors of the defunct Bangkok Ratchada Trust Co will meet on January 19 to discuss the appointment of new members after the current nominees were opposed by the Bank of Thailand. An official from the Legal Execution Department, who declined to be named, said the central bank wanted to study more closely the credentials of nominees from Siam City Bank and Thai Life Assurance, and those of Maj-Gen Sataporn Vimuktanond. The official said one retail creditor of the company, which went bankrupt in 1984, had accused the central bank of recovering debts from the company and deliberately prolonging the department's attempts to repay retail creditors. But the department was now pooling the assets of Bangkok Ratchada Trust for sale, the official said. Money from some assets sold earlier had been deposited at the bank in the department's name. Once all assets had been sold, creditors would be paid, although she could not predict when. If the department opposed the nominees at the next meeting, the committee would automatically collapse. If there were issues to be considered, the department would call a full meeting of creditors. NAKORNTHAI STRIP: Nakornthai credit rating downgraded ----------------------------------------------------- Standard & Poor's yesterday cut its long-term corporate credit rating on Nakornthai Strip Mill Plc (NSM) to 'CCC minus' from 'B minus', adding that the rating outlook was negative, according to the Bangkok Post. The US-based agency also lowered to 'CCC minus' from 'B minus' its rating on US$249 million in senior mortgage notes due in 2006, issued by NSM Steel (Delaware) Inc and guaranteed by NSM. The rating on US$203 million in senior subordinated mortgage notes due in 2008, issued by NSM Steel (Delaware) and guaranteed by NSM was lowered to 'CC' from 'CCC minus'. S & P said the downgrade reflected an oversupply and sharp price declines in regional and global steel markets, along with funding constraints that had adversely affected operations and project implementation. It noted constraints on cashflow generation, and revision of the company's original plans for some projects and marketing arrangements. The Post reports NSM has responded by attempting to reduce costs and working capital requirements. It also has been seeking alternative sources of working capital. UNITED COMMUNICATION: Ucom to delve into debt restructure --------------------------------------------------------- United Communication Industry Plc (Ucom) anticipates it will complete its US$400 million debt restructuring before the end of the year, with a registered capital increase of Bt2.5 billion, according to the Nation. The new injection, already approved by its board but pending a shareholders meeting on Dec 28, will double the firm's capital to Bt5.13 billion. The capital increase is the first stage in the company's negotiations with its creditors. If successful, Ucom will become the second telecom firm -- after Total Access Communication Plc (TAC), its cellular phone subsidiary -- to extend its loan payment period. Telecom experts point out that those companies wanting to restructure debts have to convince their creditors of positive cash flow and growth potential. Tuesday Ucom announced that its shares, valued at Bt10, will be reserved for the conversion of debentures. Some 67 million new shares will be reserved for the conversion of Bt3.69 billion in local currency debentures. According to Ucom, the capital increase will largely reduce the company's debt. 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. ISSN: 1520-9482. 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 * * *