/raid1/www/Hosts/bankrupt/TCRAP_Public/990113.MBX
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, January 13, 1999, Vol. 2, No. 8
Headlines
* C H I N A & H O N G K O N G *
GUANGDONG ENTERPRISES: GDE faces hurdles in restructuring
GUANGDONG INTERNATIONAL: Secured creditors top list
GUANGZHOU INTERNATIONAL: GZITIC has trouble paying debts
LEADING SPIRIT: Guarantees made on standstill agreement
NEW WORLD: New World to raise HK$2.4b
PEREGRINE INVESTMENTS: Directors face threat of civil suit
SING TAO HOLDINGS: Share sale on despite bankruptcy bid
UDL HOLDINGS: UDL given extra time
* I N D O N E S I A *
CIPUTRA DEVELOPMENTS: Indonesian firm still has debt burden
* J A P A N *
DAI-ICHI LIFE: Moody's cuts credit ratings
DAITO KOGYO: Nitto Construction may buy failed firm
LONG TERM CREDIT BANK: Goldman named LTCB adviser
LONG TERM CREDIT: Set up dummy to hide bad loans
MEIJI MUTUAL LIFE: Moody's cuts credit ratings
MITSUI CHEMICALS: Foresees 53% drop in net profit in FY98
NIPPON CREDIT: NCB to publicly seek financial adviser
NISSAN MOTOR: Purchase by DaimlerChrysler looks likely
TAIYO MUTUAL LIFE: Moody's cuts credit ratings
* K O R E A *
BLUEHILL DEPARTMENT STORE: Creditors auction Bluehill store
CHANGAN CONSTRUCTION: Starts creditor reconciliation
CHUNGNAM CITY GAS: Completes creditor reconciliation
CHUNGHWA METAL: Chunghwa Metal's liquidation completed
DAEWOO ELECTRONICS: To narrow differences on swap
DONGAH LIFE: Five insurance companies to go on the block
DOOWON LIFE: Five insurance companies to go on the block
HANBO IRON & STEEL: Creditors plan to finish sale in Jan.
HANDUK LIFE: Five insurance companies to go on the block
HANKUK LIFE: Five insurance companies to go on the block
HYUNDAI: Hyundai's financial health questioned
HYUNDAI ELECTRONICS: LG makes demands for its workers
HYUNDAI METAL: Hyundai Metal's liquidation completed
JOSUN LIFE: Five insurance companies to go on the block
KOOKMIN LIFE: Five insurance companies to go on the block
KUMHO LIFE: Attracts $100 mil. from U.S. firm
KYEMONG PUBLISHING: Kyemong Publishing liquidates
LG SEMICON: LG makes demands for its workers
PACIFIC LIFE: Five insurance companies to go on the block
SAMSUNG: Gives up control of US PC maker AST
SAMSUNG MOTORS: To narrow differences on swap
SHINHEUNG WOOL: Shinheung Wool liquidates
TONG-IL GROUP: Affiliates apply for court receivership
* M A L A Y S I A *
RENONG: Government sets terms for Renong aid
* P H I L I P P I N E S *
APO CEMENT: Cemex to buy 99% of Apo Cement for US$400m
JG SUMMIT: Cemex to buy 99% of Apo Cement for US$400m
MERALCO: Meralco denies it is trying to fend off takeover
PHILIPPINE AIRLINES: Creditors call rescue unacceptable
PHILIPPINE AIRLINES: Tan pledges PAL bridge money
PILTEL: Piltel in debt talks
* T H A I L A N D *
PRANDA JEWELRY: Appoints Asset Plus in restructuring effort
SANSIRI: Allotted the new issue share of Sansiri Pcl
=================================
C H I N A & H O N G K O N G
=================================
GUANGDONG ENTERPRISES: GDE faces hurdles in restructuring
---------------------------------------------------------
According to the South China Morning Post, debt-laden
Guangdong Enterprises (Holdings) (GDE) faces a tough time
in winning approval for a standstill agreement at a
meeting with bankers today amid disappointment over the
treatment of Gitic's creditors at a meeting on Sunday,
despite the Guangdong provincial government's earlier
pledge that it intended to bail out GDE following Gitic's
demise.
Eighty-five banks have been invited to the meeting at which
GDE will offer a debt-restructuring plan. The GDE Group,
except for its listed flagship Guangdong Investment, is
proposing to suspend repayments on principal until April
15, although interest would be paid during the period. Some
bankers expect the GDE group to offer additional collateral
or to pay higher interest to secure banks' approval.
GUANGDONG INTERNATIONAL: Secured creditors top list
---------------------------------------------------
According to the South China Morning Post, a Guangzhou-
based Bank of China official said yesterday Gitic had
started bankruptcy procedures and that the firm would
submit its application to the Higher People's Court of
Guangdong in the coming days.
Creditors of Guangdong International Trust and Investment
Corp (Gitic) with security held against their loans should
have repayment priority under the maninland's bankruptcy
law, as indicated by chief drafter of the mainland's 1986
bankruptcy law Cao Siyuan.
Following creditors with security on the priority list for
repayment are employees, followed by government and
taxation authorities. Secured creditors are, however,
unable to make further claims should the proceeds from the
sale of their security be insufficient to cover the debts,
which is allowed under Hong Kong law. The last to obtain
restitution are unsecured creditors.
While more than two-thirds of debts owed to Hong Kong-based
banks are registered with the State Administration for
Foreign Exchange (SAFE), the vast majority are unsecured,
according to Stewart Man, project manager of debt-paper
databank Basisfield.
Under the bankruptcy law, the court has to confirm its
acceptance of a wind-up petition within seven days of
receiving an application. A notice needs to be placed of
the confirmation. Creditors would then be required to
register their claims within a period of three months. A
liquidation committee will be formed by the court to
establish the exact amount of assets and liabilities of the
bankrupt firm. A creditors meeting will be held about three
months after the registration process. The status of
creditors and claims will then be verified and the
committee will also set priority for debt repayment. It
will take another three months for the committee to come up
with the final report on the bankrupt firm's position for
creditors to examine and vote, which is the final
procedure.
According to head of Beijing Siyuan Merger and Bankruptcy
Consultancy, Mr Cao, if Gitic files for bankruptcy this
month, creditors will not get their money back, if any,
until August at the earliest.
According to the Hong Kong Standard, Standard & Poor's
attacked Beijing for backing away from its earlier
assurances on Gitic. The ratings agency claimed senior
Beijing officials had assured it that the principal of
bonds registered with SAFE might eventually be paid in
full.
S&P lowered its rating on Gitic's US$150 million worth of
bonds due in 2003 to single-D from double-C. But the agency
said Hong Kong banks would not be downgraded as a result of
the Gitic bankruptcy. The exposure of these banks to the
Gitic collapse had already been factored into their ratings
after Gitic was closed in October last year. The ratings
agency also said most of Hong Kong banks with exposure to
Gitic have large enough balance sheets to withstand the
losses from provisions made.
Mainland-based banks were considered more likely candidates
for downgrades.
GUANGZHOU INTERNATIONAL: GZITIC has trouble paying debts
--------------------------------------------------------
The Asian Wall Street Journal reported that the Guangzhou
International Trust & Investment Corporation (or GZITIC) is
facing trouble paying debts after an auction designed to at
raising capital failed.
The auction of GZITIC's 27 percent stake in a domestic
securities firm was canceled by China Securities Regulatory
Commission, which said that GZITIC did not have permission
to hold the sale.
The auction was to raise money to repay Anhui International
Trust & Investment Corp. (or AITIC). GZITIC borrowed about
50 million yuan ($6 million) in short term funds in 1998,
and has been unable to pay it bank.
A court in the Anhui has issued a writ that freezes some
GZITIC's assets.
The article reported that the canceled auction will go
forward at a later date.
LEADING SPIRIT: Guarantees made on standstill agreement
-------------------------------------------------------
The respective boards of directors of Leading Spirit
(Holdings) Company Limited ("LSH") and Leading Spirit
Conrowa Electric Company Limited ("LSC") announce that in
addition to the Cross Guarantee given by each member of the
Borrower Group, certain other forms of security and
guarantee have been and are to be provided to the Banks to
secure the obligations of all the members of the Borrower
Group pursuant to the Standstill Agreement.
Under the Standstill Agreement, the total bank borrowings
of LSH and its subsidiaries (excluding LSC and its
subsidiaries) amounted to approximately HK$843 million and
that of LSC and its subsidiaries amounted to approximately
HK$227 million.
The respective boards of directors of LSH and LSC wish to
reassure their shareholders that the Guarantee and Security
so created will not interfere with the normal operations of
the two companies and their respective subsidiaries and so
long as the Borrower Group complies with the terms of, and
perform the obligations under, the Standstill Agreement,
the Borrower Group can freely operate the Bank Accounts and
handle the Accounts Receivable.
The provision of the Guarantee and Security was a
fundamental term required by the Banks for the Standstill
Agreement which is crucial to the two groups. By entering
into the Standstill Agreement, the Banks will not take any
steps or commence any proceedings for the winding up or
dissolution of any subsidiaries of LSH or LSC, or take any
action to sue for or, enforce the payment of monies under
the banking facilities in an aggregate amount of HK$1,070
million during the Standstill Period.
The principal activities of LSH and its subsidiaries
consist of investment holding, property investment,
assembly of motorcycles and motor vehicles and trading of
their parts and components, and investment in LSC and its
subsidiaries. The principal activities of LSC and its
subsidiaries consist of investment holding, the trading of
parts and components used in the manufacture of consumer
electrical and electronic products and the manufacture,
assembly and sale of consumer electrical and electronic
products under its "CONROWA" brand name. The products are
mainly sold in the PRC.
NEW WORLD: New World to raise HK$2.4b
-------------------------------------
Singapore Business Times and Bloomberg report New World
Development Co, Hongkong's fourth largest property
developer, is raising HK$2.35 billion (S$506.7 million) by
selling shares and will use the proceeds to spend mainly on
its Hongkong property business, a company executive said.
It is selling 117 million new shares at HK$20.05 each. CLSA
Global Emerging Markets and Goldman, Sachs are arranging
the sale.
New World Development has built up debt and needs money
because it's still spending cash on businesses such as
telecommunications, buses and China property, which aren't
yet profitable.
New World Development had total debt of HK$25 billion as of
June 30, 1998, and a debt-to-equity ratio at the time of 48
per cent, according to its annual report. Managing director
Henry Cheng said in November he wants to bring New World
Development's debt down to HK$14 billion.
PEREGRINE INVESTMENTS: Directors face threat of civil suit
----------------------------------------------------------
According to the South China Morning Post, legal advice
sought by PricewaterhouseCoopers suggests that certain
directors of the failed Peregrine Investments, who
include fixed-income head Andre Lee and chairman Philip
Tose, faced the prospect of legal action for failing to
fulfil their fiduciary duties.
PricewaterhouseCoopers partner in charge of the liquidation
David Hague said that a variety of legal actions to recover
assets were being considered but declined to comment on the
prospect of legal action against directors.
It is understood that creditors have authorised
PricewaterhouseCoopers to set aside several million dollars
to pursue certain directors and other third parties who may
have acted negligently in carrying out their duties. More
assets will be set aside if court action proceeds.
Liquidators could choose to target directors' personal
assets or their company director insurance policies.
Mr Tose blamed the Asian crisis for the collapse of
Peregrine, but the demise has been specifically linked to
fixed-income loans made to Indonesian corporates, in
particular US$265 million in loans to taxi firm Steady
Safe.
SING TAO HOLDINGS: Share sale on despite bankruptcy bid
-------------------------------------------------------
According to the South China Morning Post, Sing Tao
Holdings said its chairman Sally Aw Sian was proceeding
with her $115 million share sale in spite of a legal
attempt to force her into bankruptcy. Sing Tao also
revealed yesterday Ms Aw had pledged the majority of her
50.04 per cent stake in Sing Tao to unnamed financial
institutions. Ms Aw is selling 23 per cent of Sing
Tao, 12.26 per cent to Dublin-based China Enterprise
Development Fund (CEDF) and the remaining 10.74 per cent to
third-party investors to be found by China Enterprise.
The deal is scheduled to be completed on February 15, a
fortnight after all the conditions, including a
satisfactory due-diligence exercise on Sing Tao and
approval from securities regulators, are fulfilled.
Sources said CEDF was assessing Sing Tao's operations and
financial position.
Ms Aw's debts are alleviated by the share sale and the $100
million disposal of Ms Aw's prime Hong Kong property asset,
the Tiger Balm Garden.
Last week, Yosham filed a bankruptcy petition against Ms
Aw. The petition followed a writ filed by Yosham's director
Ho Ying-chie claiming $294.2 million unpaid debts from Ms
Aw.
UDL HOLDINGS: UDL given extra time
----------------------------------
According to the South China Morning Post, cash-strapped
civil marine engineering company UDL Holdings won time from
a judge yesterday to drum up creditors' support to save the
ailing company from liquidation. The company had sought
backing from creditors for a restructuring plan just
minutes before the court went into session. A 14-day
reprieve was granted despite vigorous arguments form HSBC
to swiftly proceed with a winding up petition.
UDL claims to have backing from 76.98 per cent of creditors
for a rehabilitation plan but HSBC said the backing was for
an adjournment of the case. Accountants Ernst & Young had
described the scheme as "too complicated".
A winding-up petition has also just been filed against UDL
Civil Contractors, with Far East International named as the
creditor.
Nelson Wheeler Corporate Reconstruction & Insolvency
managing director Nick Hill said from creditors'
viewpoints, restructuring could ultimately provide small
returns and there's a feeling it might start a bit of a
landslide.
Part of the problem in the present construction climate was
a snowballing effect when contractors failed to meet
deadlines and hence stalled paying off sub-contractors.
=================
I N D O N E S I A
=================
CIPUTRA DEVELOPMENTS: Indonesian firm still has debt burden
-----------------------------------------------------------
According to the Hong Kong Standard, Ciputra Developments,
one of the major property developers in Indonesia, has yet
to reach agreement with creditors to convert massive
unsecured debt into equity.
Finance director Harun Hajadi denied a report in Bisnis
Indonesia that negotiations on the plan had been completed.
He said he expected "the whole thing" to be completed by
June.
Ciputra owes a total of US$305 million in US dollar loans
and 1.23 trillion in rupiah. Its cash flow has shrivelled
as interest rates soared to record highs and mortgage
finance dried up after the rupiah began tumbling in August
1997.
So far, only 450 billion rupiah of the company's debt has
been rescheduled. The company reached an agreement to
replace coupons on a 150-billion rupiah bond maturing in
2001, and a 300-billion rupiah bond maturing in 2003, with
non-interest bearing bonds and a 56 per cent stake in
subsidiary PT Ciputra Surya.
The company has unsecured floating-rate notes trading worth
US$125 million in Singapore and Luxembourg, and US$75
million in other unsecured loans, all owed to foreign
banks. It also has 122 billion in unsecured rupiah loans.
Company executives will meet with creditors in Singapore
early next month and an agreement could be expected by
March, according to Mr Harun. That debt will be treated in
the same way as the rupiah bonds, and the creditors will
also end up with equity.
=========
J A P A N
=========
DAI-ICHI LIFE: Moody's cuts credit ratings
------------------------------------------
AP Financial News reports credit rating agency Moody's
Investors Service today cut the debt ratings of three
Japanese life insurance companies expected to suffer
falling profits and shrinking assets. Meiji Mutual Life
Insurance, Dai-Ichi Mutual Life Insurance and Taiyo Mutual
Life Insurance were among a group of eight Japanese
insurers Moody's placed on watch list October for possible
downgrades.
DAITO KOGYO: Nitto Construction may buy failed firm
---------------------------------------------------
Bloomberg reports shares of Nitto Construction Co. rose 20
yen to 225. The mid-size general contractor said it may buy
failed contractor Daito Kogyo Co., which last year applied
for protection from its creditors. Nitto said no agreement
had been reached, although the Yomiuri newspaper reported
the acquisition will take place Oct. 1. The stock was
suspended in early morning trading.
LONG TERM CREDIT BANK: Goldman named LTCB adviser
-------------------------------------------------
According to the South China Morning Post, Goldman, Sachs &
Co was chosen to advise the nationalised Long Term Credit
Bank (LTCB) on the sale of its business, as Japan starts to
seek outside help to restructure its troubled financial
firms. Goldman was chosen from a field of seven companies,
and will soon enter into formal contract negotiations, said
Ichiro Murakami, and LTCB spokesman. The deal could signal
the start of a surge in Japanese merger and acquisition
activity, as companies battered by bad loans and poor
profits in a rocky economy are forced to sell all or part
of their business.
LONG TERM CREDIT: Set up dummy to hide bad loans
------------------------------------------------
Kyodo News reports failed Long-Term Credit Bank of Japan
(LTCB) created a company on paper to conceal 20 billion yen
in bad loans it had extended to a women's clothing sales
group which collapsed in 1991, LTCB sources said Monday.
The dummy firm is one of 19 phantom companies LTCB
established to dispose of bad loans, the sources said.
LTCB set up the dummy company in March 1993 in a bid to
dispose of bad loans extended to the Tokyo-based
Fontainebleau group, through purchasing two hotels used as
collateral for the loans, the sources said.
LTCB had extended loans of 7 billion yen and 6.4 billion
yen to the Fontainebleau group between 1989 and 1990 for
the purpose of hotel and resort development, they said.
Following the collapse of Fontainebleau, the LTCB put the
two hotels up for auction, but could not sell them, they
said.
In April 1993, one month after its establishment, the dummy
company bought one of the hotels, located in Atami,
Shizuoka Prefecture, using a 5.5 billion yen loan from
LTCB, the sources said.
In a similar way, the dummy company bought the second
hotel, also in Atami.
A Tokyo-based company later bought the hotel but has not
put it into operation.
MEIJI MUTUAL LIFE: Moody's cuts credit ratings
----------------------------------------------
AP Financial News reports credit rating agency Moody's
Investors Service today cut the debt ratings of three
Japanese life insurance companies expected to suffer
falling profits and shrinking assets. Meiji Mutual Life
Insurance, Dai-Ichi Mutual Life Insurance and Taiyo Mutual
Life Insurance were among a group of eight Japanese
insurers Moody's placed on watch list October for possible
downgrades.
MITSUI CHEMICALS: Foresees 53% drop in net profit in FY98
---------------------------------------------------------
Nikkei reports Mitsui Chemicals Inc., born from the merger
of Mitsui Petrochemical Industries Ltd. and Mitsui Toatsu
Chemicals Inc., expects net profit to plunge 53% to some 5
billion yen in the fiscal year ending March, company
sources said. The firm's efforts to maximize write-offs of
nonperforming assets is behind the drop. Mitsui Chemicals
plans to use all 5 billion yen to pay out a 6 yen per share
annual dividend.
The bottom line would be 60% lower than that of the
combined net profits of the two pre-merger companies in
fiscal 1996. The firm must write off loans to a finance
subsidiary used by another affiliate in a canceled plan to
build a golf course.
Mitsui Chemicals expects pretax profit to reach 38.7
billion yen, 24% more than the two former firms' combined
pretax profit in fiscal 1996.
The company also faced 15 billion yen in stock appraisal
losses as of Dec. 31 after switching to a lower of cost or
value accounting method.
NIPPON CREDIT: NCB to publicly seek financial adviser
-----------------------------------------------------
Jiji Press English News reports Nippon Credit Bank, which
is under temporary state control after being declared
insolvent last month, will launch a public search for a
financial adviser for its future sale to the private
sector, bank officials said Monday.
The bank hopes to end state control at an early date and
choose its receiver financial institution with the help of
a Japanese or overseas bank or brokerage house that has
mergers and acquisition expertise, the officials said.
Long-Term Credit Bank of Japan, which was also nationalized
after becoming insolvent last year, has chosen Goldman,
Sachs and Co. of the United States as its financial
adviser.
NISSAN MOTOR: Purchase by DaimlerChrysler looks likely
------------------------------------------------------
The Wall Street Journal featured a front-page article
confirming speculation that DaimlerChrysler AG may be
considering a buy into Nissan Motor Co. For weeks, the
article says, DaimlerChrysler executives have said they are
interested in an alliance with Nissan's heavy-truck
affiliate, Nissan Diesel Motor Co.
But on Sunday night in Detroit, DaimlerChrysler Chairman
Juergen Schrempp opened the door to something more. "We do
not exclude an equity participation" in Nissan Motor
itself, Mr. Schrempp said, in response to questions at an
industry conference. Monday, Nissan replied to Mr.
Schrempp's comments by saying it would be willing to
conclude a deal with DaimlerChrysler on the truck unit or
any other arena of cooperation.
Mr. Schrempp and DaimlerChrysler's other chairman, Robert
J. Eaton, had been planning for some time to be in Tokyo
next week for an exhibition of DaimlerChrysler products and
technology. In addition, Mr. Schrempp is scheduled to meet
next week with Nissan President Yoshikazu Hanawa, according
to an individual close to the situation.
And as bad as things are at Nissan, DaimlerChrysler's
exposure would probably be limited. Nissan has lost
millions in five of the past six years, and its debt stands
somewhere between $22 billion and $30 billion - more than
any other auto maker owes. Nissan would be bankrupt if it
were an American company. But, according to one individual
close to the situation, a company taking a minority but
controlling position of 34.5% in Nissan wouldn't be taking
on the whole debt. If Nissan subsequently failed, the only
risk would be the investment in Nissan shares, which could
be in the billions of dollars but would fall well short of
that towering total debt.
The article gives an extensive history of Nissan Motor,
both in Asia and the US, and describes the decisions and
conditions that have led the company to where it is today.
TAIYO MUTUAL LIFE: Moody's cuts credit ratings
----------------------------------------------
AP Financial News reports credit rating agency Moody's
Investors Service today cut the debt ratings of three
Japanese life insurance companies expected to suffer
falling profits and shrinking assets. Meiji Mutual Life
Insurance, Dai-Ichi Mutual Life Insurance and Taiyo Mutual
Life Insurance were among a group of eight Japanese
insurers Moody's placed on watch list October for possible
downgrades.
=========
K O R E A
=========
BLUEHILL DEPARTMENT STORE: Creditors auction Bluehill store
-----------------------------------------------------------
The Korea Times reported that creditors auctioned off the
Bluehill Department Store in Pundang, a southern suburb of
Seoul. Lotte Department Stores won the auction bidding
123.5 billion won. This 32,400 pyong store opened in August
1996 in the satellite city of Pundang, which is well know
for its strong concentration of eager consumers.
Despite its success in the Pundang market, Bluehill
encountered financial problems when its parent group
Chungkoo was declared bankrupt in 1997. The Daegu Bank was
the creditor selling this store.
CHANGAN CONSTRUCTION: Starts creditor reconciliation
----------------------------------------------------
The Seoul District Court advertised in the December 3rd
Korean language Maeil Kyungje that the Chang An
Construction Company started its creditor reconciliation
procedure. The creditors have until December 23 to file
their claims. The company's address is 335-1, Edong-dong,
Paju-shi, and the president is Chang Chol-su.
CHUNGNAM CITY GAS: Completes creditor reconciliation
----------------------------------------------------
The Taechon District Court advertised in the December 3rd
Korean language Maeil Kyungje that the Chungnam City Gas
Company completed its creditor reconciliation procedure.
The company's address is 210 Chungchon-dong Chung-gu,
Taechonshi and the president is Mr. Shin Young-chan.
CHUNGHWA METAL: Chunghwa Metal's liquidation completed
------------------------------------------------------
The Seoul District Court advertised in the December 10th
Korean language Maeil Kyungje that the Chunghwa Metal
Company's liquidation plan was completed. The company's
presidents are Mr. Yoo Sung-ho and Mr. Park Sang-sun.
DAEWOO ELECTRONICS: To narrow differences on swap
-------------------------------------------------
The Korea Herald reports adding to growing optimism over
"big-deal" industrial restructuring, Samsung and Daewoo
groups yesterday managed to narrow their differences in the
terms and conditions for the proposed swap between their
automobile and electronics affiliates, industry sources
said.
Despite a tentative agreement to exchange Samsung Motors
Inc. for Daewoo Electronics Co., the two groups had been
locked in heated dispute over a set of conditions,
particularly whether or not Daewoo will continue to produce
Samsung's "SM 5" cars at its Pusan plant.
Spurred by the semiconductor big deal between Hyundai and
LG groups as well as mounting government pressure, however,
the rival conglomerates will likely reach the middle
ground, with Daewoo agreeing to guarantee continued
production of SM 5's for a certain period, the sources
said. "Samsung's earlier promise to allow Daewoo
Electronics to manage itself independently for five years
will serve as a key to the stalemate," said an official at
the Federation of Korean Industries. "In response, Daewoo
may soften its stance, vowing to produce Samsung's SM 5
models, possibly for three to five years," he forecast.
Against this backdrop, senior partners from U.S. accounting
agency Deloitte Touche Thomatsu (DTT), commissioned with
the task of evaluating assets of Samsung Motors and Daewoo
Electronics, have been meeting with Samsung and Daewoo
officials in Seoul to discuss evaluation procedures.
Depending on the talks, DTT and the two groups will sign an
agreement regarding asset evaluations by the end of this
week, as recommended by government regulators. According to
informed sources, both parties may agree to exclude Daewoo
Electronics' overseas operations from the swap deal.
Samsung's commercial-vehicle and automobile-parts
businesses are also expected to be dropped from the deal,
they added.
DONGAH LIFE: Five insurance companies to go on the block
--------------------------------------------------------
The Korea Times reported in a front page headline that five
of Korea's life insurance companies will not be able to
survive independently, and will probably be sold to
foreigners by the end of March. These five companies are
among the seven which were ordered by the government last
August to produce rehabilitation plans, as they had
deficiencies in their solvency requirements ranging from 16
to 32 percent. Additionally, all of these seven targeted
insurance companies have promised to improve their
financial status by raising funds from abroad, but as of
the end of 1998, none of them succeeded in attracting
foreign funds.
A similar story in the Korea Herald stated that among these
seven troubled insurance companies, those without any
affiliation with a large conglomerate have little hope of
attracting capital via foreign investments or a rights
issue. Dongah and Hankuk Life are two companies on this
list with an affiliation with a large conglomerate.
Officials with the Financial Supervisory Commission (FSC)
said that the list of companies to be sold will be
finalized this month, and the FSC will conduct due
diligence based on finance statements next month. The
sale will reportedly take the form of open bidding. It is
also possible that two or three firms will be merged so
that they can be sold as a package.
The seven insurance companies are Dongah Life Insurance
Company (an affiliate of the Dong Ah Group), Doowon Life
Insurance, Handuk Life Insurance, Hankuk Life Insurance (an
affiliate of the Hyundai Group), Josun Life Insurance,
(which is based in Taegu), Kookmin Life Insurance, and
Pacific Life Insurance.
DOOWON LIFE: Five insurance companies to go on the block
--------------------------------------------------------
The Korea Times reported in a front page headline that five
of Korea's life insurance companies will not be able to
survive independently, and will probably be sold to
foreigners by the end of March. These five companies are
among the seven which were ordered by the government last
August to produce rehabilitation plans, as they had
deficiencies in their solvency requirements ranging from 16
to 32 percent. Additionally, all of these seven targeted
insurance companies have promised to improve their
financial status by raising funds from abroad, but as of
the end of 1998, none of them succeeded in attracting
foreign funds.
A similar story in the Korea Herald stated that among these
seven troubled insurance companies, those without any
affiliation with a large conglomerate have little hope of
attracting capital via foreign investments or a rights
issue. Dongah and Hankuk Life are two companies on this
list with an affiliation with a large conglomerate.
Officials with the Financial Supervisory Commission (FSC)
said that the list of companies to be sold will be
finalized this month, and the FSC will conduct due
diligence based on finance statements next month. The
sale will reportedly take the form of open bidding. It is
also possible that two or three firms will be merged so
that they can be sold as a package.
The seven insurance companies are Dongah Life Insurance
Company (an affiliate of the Dong Ah Group), Doowon Life
Insurance, Handuk Life Insurance, Hankuk Life Insurance (an
affiliate of the Hyundai Group), Josun Life Insurance,
(which is based in Taegu), Kookmin Life Insurance, and
Pacific Life Insurance.
HANBO IRON & STEEL: Creditors plan to finish sale in Jan.
---------------------------------------------------------
According to a report in the Korea Times, creditors of the
bankrupt Hanbo Iron & Steel Company are planning to wrap up
negotiations on its sale by the end of this month. These
creditors have also urged the Dongkuk Steel Mill Company
(so far the only bidder for Hanbo) to present new of letter
of intent for the purchase Hanbo.
Dongkuk Steel, which has a production capability of 2
million tons, had offered to 1.72 trillion won to take over
Hanbo in the first round of international bidding that was
conducted last year. The creditor banks reportedly aborted
bidding on Hanbo because Dongkuk's offering price failed to
meet their expectations.
Creditor banks prefer to sell off Hanbo's two main plants
as a package, but they could be sold off in separate parts
contingent on buyer interest. Hanbo's main facility is its
Tanjin Steelworks which includes a mill producing 1.8
million tons of crude steel a year for hot coils and steel
rods, as well as a cold-rolled steel plate plant that
suspended operations this last July. The other part of the
company comprises uncompleted facilities (whose
construction was stopped last year) that were slated to
become a 2.1 million ton hot coil mill and a 2 million ton
cold-rolled sheet plate plant.
HANDUK LIFE: Five insurance companies to go on the block
--------------------------------------------------------
The Korea Times reported in a front page headline that five
of Korea's life insurance companies will not be able to
survive independently, and will probably be sold to
foreigners by the end of March. These five companies are
among the seven which were ordered by the government last
August to produce rehabilitation plans, as they had
deficiencies in their solvency requirements ranging from 16
to 32 percent. Additionally, all of these seven targeted
insurance companies have promised to improve their
financial status by raising funds from abroad, but as of
the end of 1998, none of them succeeded in attracting
foreign funds.
A similar story in the Korea Herald stated that among these
seven troubled insurance companies, those without any
affiliation with a large conglomerate have little hope of
attracting capital via foreign investments or a rights
issue. Dongah and Hankuk Life are two companies on this
list with an affiliation with a large conglomerate.
Officials with the Financial Supervisory Commission (FSC)
said that the list of companies to be sold will be
finalized this month, and the FSC will conduct due
diligence based on finance statements next month. The
sale will reportedly take the form of open bidding. It is
also possible that two or three firms will be merged so
that they can be sold as a package.
The seven insurance companies are Dongah Life Insurance
Company (an affiliate of the Dong Ah Group), Doowon Life
Insurance, Handuk Life Insurance, Hankuk Life Insurance (an
affiliate of the Hyundai Group), Josun Life Insurance,
(which is based in Taegu), Kookmin Life Insurance, and
Pacific Life Insurance.
HANKUK LIFE: Five insurance companies to go on the block
--------------------------------------------------------
The Korea Times reported in a front page headline that five
of Korea's life insurance companies will not be able to
survive independently, and will probably be sold to
foreigners by the end of March. These five companies are
among the seven which were ordered by the government last
August to produce rehabilitation plans, as they had
deficiencies in their solvency requirements ranging from 16
to 32 percent. Additionally, all of these seven targeted
insurance companies have promised to improve their
financial status by raising funds from abroad, but as of
the end of 1998, none of them succeeded in attracting
foreign funds.
A similar story in the Korea Herald stated that among these
seven troubled insurance companies, those without any
affiliation with a large conglomerate have little hope of
attracting capital via foreign investments or a rights
issue. Dongah and Hankuk Life are two companies on this
list with an affiliation with a large conglomerate.
Officials with the Financial Supervisory Commission (FSC)
said that the list of companies to be sold will be
finalized this month, and the FSC will conduct due
diligence based on finance statements next month. The
sale will reportedly take the form of open bidding. It is
also possible that two or three firms will be merged so
that they can be sold as a package.
The seven insurance companies are Dongah Life Insurance
Company (an affiliate of the Dong Ah Group), Doowon Life
Insurance, Handuk Life Insurance, Hankuk Life Insurance (an
affiliate of the Hyundai Group), Josun Life Insurance,
(which is based in Taegu), Kookmin Life Insurance, and
Pacific Life Insurance.
HYUNDAI: Hyundai's financial health questioned
----------------------------------------------
The lead story in the Korea Times Financial section was an
article questioning the health of the Hyundai Group, the
largest of Korea's family owned conglomerates (or
chaebols). The report mentioned that there are concerns in
Seoul about the effects of Hyundai's relentless expansion
on its financial health.
Late last December, one local credit rating agency put
under review for possible downgrade bonds and commercial
papers issued by six affiliates of Hyundai. Among these six
was Hyundai Motors, which recently agreed to raise 1.7
trillion won as part of a deal to purchased the controlling
stake of the bankrupt Kia Motors. This deal also requires
Hyundai to shoulder a good part of Kia's multi-trillion won
debt.
An official at the Korea Exchange Bank, Hyundai's prime
creditor, was also quoted as saying the if the government
initiated Hyundai takeover/merger of LG semiconductor
places an excessive burden on Hyundai, it could signal the
beginning of problems for the chaebol. Details of the
takeover of LG Semicon by Hyundai Electronics Industries
have yet to be worked out, but LG is reportedly demanding
on the order of 4 to 5 trillion won in exchange for giving
up its chip business.
A banker at the Seoul branch of ING Bank was quoted as
saying that the amount of funds which Hyundai needs looks
too big in the short-term, and that Hyundai's financial
situation is being closely monitored. ING has put all new
dealings with Hyundai on hold. These near-term cash needs
include Hyundai's commitment to a $2 billion deal with
North Korea for the development the Mount Kumgang tourism
business. Furthermore, an earlier report in the Korea
Herald mentioned that the Hyundai Group's debt-to-equity
ratio stood at 332.6 percent as of the end of 1998.
According to government mandates, this must be reduced to
200 percent by the end of this year.
Hyundai's fate also appears linked to the markets,
according to banking analysts in Seoul. Hyundai is
reportedly planning to meet much of its demand for funds
through rights offerings. If the stock market should
suddenly fall, this would be a fatal blow to Hyundai's fund
raising plans.
HYUNDAI ELECTRONICS: LG makes demands for its workers
-----------------------------------------------------
The Korea Times reports LG Semicon, which is to sell all of
its shares to Hyundai Electronics Industries (HEI) in their
merger, is demanding cash as compensation as well as strict
conditions for reemploying all of its workers. In a meeting
with reporters, LG's chief executive for restructuring Kang
Yoo-shik said negotiations cannot proceed without Hyundai
accepting its six-point proposal for rehiring all of LG
Semicon's workers.
Other conditions include providing the LG workers with the
same or higher wages and similar welfare benefits and
allowing them to sustain their current organizations,
including labor unions.
Under their letter of intent, the two companies are to
complete their negotiations on HEI's takeover of LG before
the end of this month and sign an official contract,
although it remains to be seen if it can be done so
quickly.
As for LG's planned move to take ADL to court as early as
this week for what it called a "biased and arbitrary"
evaluation, Kang said the suit will go ahead regardless of
the negotiations with HEI.
HYUNDAI METAL: Hyundai Metal's liquidation completed
----------------------------------------------------
The Seoul District Court advertised in the December 10th
Korean language Maeil Kyungje that the Hyundai Metal
Company's liquidation plan was completed. The company's
presidents are Mr. Yoo Sung-ho and Mr. Park Sang-sun.
JOSUN LIFE: Five insurance companies to go on the block
-------------------------------------------------------
The Korea Times reported in a front page headline that five
of Korea's life insurance companies will not be able to
survive independently, and will probably be sold to
foreigners by the end of March. These five companies are
among the seven which were ordered by the government last
August to produce rehabilitation plans, as they had
deficiencies in their solvency requirements ranging from 16
to 32 percent. Additionally, all of these seven targeted
insurance companies have promised to improve their
financial status by raising funds from abroad, but as of
the end of 1998, none of them succeeded in attracting
foreign funds.
A similar story in the Korea Herald stated that among these
seven troubled insurance companies, those without any
affiliation with a large conglomerate have little hope of
attracting capital via foreign investments or a rights
issue. Dongah and Hankuk Life are two companies on this
list with an affiliation with a large conglomerate.
Officials with the Financial Supervisory Commission (FSC)
said that the list of companies to be sold will be
finalized this month, and the FSC will conduct due
diligence based on finance statements next month. The
sale will reportedly take the form of open bidding. It is
also possible that two or three firms will be merged so
that they can be sold as a package.
The seven insurance companies are Dongah Life Insurance
Company (an affiliate of the Dong Ah Group), Doowon Life
Insurance, Handuk Life Insurance, Hankuk Life Insurance (an
affiliate of the Hyundai Group), Josun Life Insurance,
(which is based in Taegu), Kookmin Life Insurance, and
Pacific Life Insurance.
KOOKMIN LIFE: Five insurance companies to go on the block
---------------------------------------------------------
The Korea Times reported in a front page headline that five
of Korea's life insurance companies will not be able to
survive independently, and will probably be sold to
foreigners by the end of March. These five companies are
among the seven which were ordered by the government last
August to produce rehabilitation plans, as they had
deficiencies in their solvency requirements ranging from 16
to 32 percent. Additionally, all of these seven targeted
insurance companies have promised to improve their
financial status by raising funds from abroad, but as of
the end of 1998, none of them succeeded in attracting
foreign funds.
A similar story in the Korea Herald stated that among these
seven troubled insurance companies, those without any
affiliation with a large conglomerate have little hope of
attracting capital via foreign investments or a rights
issue. Dongah and Hankuk Life are two companies on this
list with an affiliation with a large conglomerate.
Officials with the Financial Supervisory Commission (FSC)
said that the list of companies to be sold will be
finalized this month, and the FSC will conduct due
diligence based on finance statements next month. The
sale will reportedly take the form of open bidding. It is
also possible that two or three firms will be merged so
that they can be sold as a package.
The seven insurance companies are Dongah Life Insurance
Company (an affiliate of the Dong Ah Group), Doowon Life
Insurance, Handuk Life Insurance, Hankuk Life Insurance (an
affiliate of the Hyundai Group), Josun Life Insurance,
(which is based in Taegu), Kookmin Life Insurance, and
Pacific Life Insurance.
KUMHO LIFE: Attracts $100 mil. from U.S. firm
---------------------------------------------
The Korea Herald reports Kumho Life Insurance Co. will
attract $100 million by selling off 60 percent of its
stakes to Hartford Life International Ltd. of the United
States, officials said yesterday. Officials at Kumho
exchanged a memorandum of understanding (MOU) with the U.S.
life insurance giant to form a large-scale joint venture,
Kumho officials said. It is the first time that a domestic
insurance firm has successfully lured investments from a
foreign company, they said.
Hartford Life International will acquire 60 percent of
Kumho Life based on the agreement under which Kumho will
maintain managerial rights, they added. Kumho officials
said that they will be able to upgrade their financial
status to an international level by introducing insurance
techniques used by advanced nations and provide customers
with quality services. Established in 1810, Hartford Life
International has been analyzing the management and assets
of Kumho Life since last July, they said.
KYEMONG PUBLISHING: Kyemong Publishing liquidates
-------------------------------------------------
According to the December 7th Korean language Maeil
Kyungje's Business Brief section, the Seoul District Court
has approved the Kyemong Publishing Company's liquidation
application.
LG SEMICON: LG makes demands for its workers
--------------------------------------------
The Korea Times reports LG Semicon, which is to sell all of
its shares to Hyundai Electronics Industries (HEI) in their
merger, is demanding cash as compensation as well as strict
conditions for reemploying all of its workers. In a meeting
with reporters, LG's chief executive for restructuring Kang
Yoo-shik said negotiations cannot proceed without Hyundai
accepting its six-point proposal for rehiring all of LG
Semicon's workers.
Other conditions include providing the LG workers with the
same or higher wages and similar welfare benefits and
allowing them to sustain their current organizations,
including labor unions.
Under their letter of intent, the two companies are to
complete their negotiations on HEI's takeover of LG before
the end of this month and sign an official contract,
although it remains to be seen if it can be done so
quickly.
As for LG's planned move to take ADL to court as early as
this week for what it called a "biased and arbitrary"
evaluation, Kang said the suit will go ahead regardless of
the negotiations with HEI.
PACIFIC LIFE: Five insurance companies to go on the block
---------------------------------------------------------
The Korea Times reported in a front page headline that five
of Korea's life insurance companies will not be able to
survive independently, and will probably be sold to
foreigners by the end of March. These five companies are
among the seven which were ordered by the government last
August to produce rehabilitation plans, as they had
deficiencies in their solvency requirements ranging from 16
to 32 percent. Additionally, all of these seven targeted
insurance companies have promised to improve their
financial status by raising funds from abroad, but as of
the end of 1998, none of them succeeded in attracting
foreign funds.
A similar story in the Korea Herald stated that among these
seven troubled insurance companies, those without any
affiliation with a large conglomerate have little hope of
attracting capital via foreign investments or a rights
issue. Dongah and Hankuk Life are two companies on this
list with an affiliation with a large conglomerate.
Officials with the Financial Supervisory Commission (FSC)
said that the list of companies to be sold will be
finalized this month, and the FSC will conduct due
diligence based on finance statements next month. The
sale will reportedly take the form of open bidding. It is
also possible that two or three firms will be merged so
that they can be sold as a package.
The seven insurance companies are Dongah Life Insurance
Company (an affiliate of the Dong Ah Group), Doowon Life
Insurance, Handuk Life Insurance, Hankuk Life Insurance (an
affiliate of the Hyundai Group), Josun Life Insurance,
(which is based in Taegu), Kookmin Life Insurance, and
Pacific Life Insurance.
SAMSUNG: Gives up control of US PC maker AST
--------------------------------------------
Singapore Business Times and Reuters report South Korean
electronics giant Samsung Electronics Co yesterday said it
was relinquishing control in a US-based personal computer
maker, and acknowledged its acquisition had been a failure.
Samsung said the sale of 65 per cent of loss-making AST
Research Inc was part of its efforts to streamline its
overseas operations and analysts agreed it was good for
Samsung to correct a bad decision made in the past.
Samsung said it signed a contract with a group of US
investors to set up a 35-65 joint venture, AST Computer,
which will later absorb AST Research's operations. Samsung
did not give the value of its 35 per cent stake but a
simple calculation from its partners' investment showed
Samsung's stake was worth a mere US$6.75 million (S$11.27
million). That's a far cry from the more than US$547
million Samsung spent in acquiring AST Research in 1995 and
1997, an ambitious move prompted by its huge cash flow amid
a semiconductor boom.
SAMSUNG MOTORS: To narrow differences on swap
---------------------------------------------
The Korea Herald reports adding to growing optimism over
"big-deal" industrial restructuring, Samsung and Daewoo
groups yesterday managed to narrow their differences in the
terms and conditions for the proposed swap between their
automobile and electronics affiliates, industry sources
said.
Despite a tentative agreement to exchange Samsung Motors
Inc. for Daewoo Electronics Co., the two groups had been
locked in heated dispute over a set of conditions,
particularly whether or not Daewoo will continue to produce
Samsung's "SM 5" cars at its Pusan plant.
Spurred by the semiconductor big deal between Hyundai and
LG groups as well as mounting government pressure, however,
the rival conglomerates will likely reach the middle
ground, with Daewoo agreeing to guarantee continued
production of SM 5's for a certain period, the sources
said. "Samsung's earlier promise to allow Daewoo
Electronics to manage itself independently for five years
will serve as a key to the stalemate," said an official at
the Federation of Korean Industries. "In response, Daewoo
may soften its stance, vowing to produce Samsung's SM 5
models, possibly for three to five years," he forecast.
Against this backdrop, senior partners from U.S. accounting
agency Deloitte Touche Thomatsu (DTT), commissioned with
the task of evaluating assets of Samsung Motors and Daewoo
Electronics, have been meeting with Samsung and Daewoo
officials in Seoul to discuss evaluation procedures.
Depending on the talks, DTT and the two groups will sign an
agreement regarding asset evaluations by the end of this
week, as recommended by government regulators. According to
informed sources, both parties may agree to exclude Daewoo
Electronics' overseas operations from the swap deal.
Samsung's commercial-vehicle and automobile-parts
businesses are also expected to be dropped from the deal,
they added.
SHINHEUNG WOOL: Shinheung Wool liquidates
-----------------------------------------
The Pusan District Court advertised in the December 4th
Korean language Maeil Kyungje that the Shinheung Wool Co.
has been liquidated. The company's address is 726-2 Mora-
dong, Sasang-gu, Pusan and the president is Mr. Kim Jun-
woo.
TONG-IL GROUP: Affiliates apply for court receivership
------------------------------------------------------
The December 11th edition of the Korean language Maeil
Kyungje reported that the 4 affiliate companies of the
Tong-il Group applied for court receivership on December
10. The four affiliates are Hanguk Titanum Co., Ilsan Stone
Material Co., Tong-il Heavy Industry Co., Ilsung
Construction Co. These four companies' application for
workout program was rejected by the Corporation
Restructuring Committee on November 28.
===============
M A L A Y S I A
===============
RENONG: Government sets terms for Renong aid
--------------------------------------------
According to the Hong Kong Standard, the National Economic
Action Council (Neac) was quoted yesterday by the national
Bernama news agency as saying the Malaysian government
would help conglomerate Renong if its debt restructuring
plan did not weigh on the government and protected national
assets.
=====================
P H I L I P P I N E S
=====================
APO CEMENT: Cemex to buy 99% of Apo Cement for US$400m
------------------------------------------------------
Singapore Business Times and Bloomberg report Cemex SA of
Mexico, the world's third-largest cement maker, said it
would pay JG Summit Holdings Inc US$400 million (S$668.2
million) for the Philippines' biggest cement factory.
Cemex, the latest multinational to buy a chunk of corporate
Asia after the region slid into recession, plans to acquire
JG Summit's 99 per cent stake in Apo Cement Corp. The sale
comes just four years after JG Summit, whose businesses
span snack foods and blue jeans, entered the cement
industry.
In the Philippines, Cemex bought a third of Rizal Cement Co
in 1997 for US$91 million. With Apo Cement under its wings,
Cemex will have about a fifth of the Philippine industry's
capacity, according to estimates by Indosuez WI Carr
Securities. Cemex is paying a premium of about 7 per cent
for the purchase compared with other similar transactions
in the Philippines, analysts said. It beat at least two
other companies bidding for Apo.
For JG Summit, the sale is a chance to reduce the US$1
billion in foreign debt it amassed to build a US$300
million chemical plant and boost its phone unit's network.
JG Summit shares surged 8.3 per cent yesterday to a nine-
month high of 3.25 pesos.
JG SUMMIT: Cemex to buy 99% of Apo Cement for US$400m
-----------------------------------------------------
Singapore Business Times and Bloomberg report Cemex SA of
Mexico, the world's third-largest cement maker, said it
would pay JG Summit Holdings Inc US$400 million (S$668.2
million) for the Philippines' biggest cement factory.
Cemex, the latest multinational to buy a chunk of corporate
Asia after the region slid into recession, plans to acquire
JG Summit's 99 per cent stake in Apo Cement Corp. The sale
comes just four years after JG Summit, whose businesses
span snack foods and blue jeans, entered the cement
industry.
In the Philippines, Cemex bought a third of Rizal Cement Co
in 1997 for US$91 million. With Apo Cement under its wings,
Cemex will have about a fifth of the Philippine industry's
capacity, according to estimates by Indosuez WI Carr
Securities. Cemex is paying a premium of about 7 per cent
for the purchase compared with other similar transactions
in the Philippines, analysts said. It beat at least two
other companies bidding for Apo.
For JG Summit, the sale is a chance to reduce the US$1
billion in foreign debt it amassed to build a US$300
million chemical plant and boost its phone unit's network.
JG Summit shares surged 8.3 per cent yesterday to a nine-
month high of 3.25 pesos.
MERALCO: Meralco denies it is trying to fend off takeover
---------------------------------------------------------
Singapore Business Times and Bloomberg report Manila
Electric Co, the Philippines' largest power distributor,
has denied speculation that the company is mounting a plan
to thwart a takeover by businessman Eduardo Cojuangco.
"We believe that there's no talk about a takeover," said
Elpi Cuna, a Meralco spokesman. Members of the Lopez family
who own 16.5 per cent of Meralco stock through First
Philippine Holdings Corp could not be reached for comment.
The Philippine Daily Inquirer reported that the family is
wooing three foreign power companies to help bankroll its
bid to buy the government's 33 per cent stake, worth about
17 billion pesos (S$752.5 million).
Analysts say Mr Cojuangco, chairman of San Miguel Corp, has
been looking at investing in other companies. He took
control of the nation's largest brewer in July and
generated US$1.3 billion (S$2.2 billion) of cash by selling
assets in Europe and the Philippines. "He's got the money
to do it," said Mike Manuel, analyst at Vickers Ballas in
Manila.
On the other hand, a takeover might not be possible since a
provision in Meralco's charter prohibits another entity
except the Lopez family acquiring more than 10 per cent of
the company.
PHILIPPINE AIRLINES: Creditors call rescue unacceptable
-------------------------------------------------------
The Asian Wall Street Journal reported that creditors
holding Philippine Airlines (PAL) floating-rate notes (or
FRNs) have issued a statement that the proposed PAL rescue
plan is unacceptable.
PAL's management prepared the rehabilitation plan and has
submitted it in early December to the Philippine Securities
Exchange Commission. The commission has allowed PAL to stop
payments on $2.1 billion in debts pending this plan's
approval. The rehabilitation plan calls for an equity
infusion of $150 million in fresh equity, reduction of
fleet size, cutting overhead costs, an indefinite grace
period on principal loan payments, and eventually finding a
strategic partner.
However, PAL's creditors holding $95.9 million (out of an
outstanding $178.5) FRNs have rejected the plan because it
does not offer reasonable terms of settlement, according to
a statement issued from a representative of these note
holders. Earlier this month the U.S. Export-Import (Ex-Im)
Bank also criticized this proposed rehabilitation plan as
being unfair to "international secured lenders." The Ex-Im
Bank is a creditor of PAL and is the trustee of four of its
Boeing 747-400 aircraft servicing PAL's trans-Pacific
routes.
PAL's troubles stem from an unfortunate timing of an fleet
modernization program, the Asian currency crisis, and a 22
day pilot strike in June, 1998. These combined severely
affected PAL's cash flow and its ability to service its
debts.
PHILIPPINE AIRLINES: Tan pledges PAL bridge money
-------------------------------------------------
According to the South China Morning Post and the Hong Kong
Standard, Philippine Finance Secretary Edgardo Espiritu
said yesterday that tobacco tycoon and Philippine Airlines
chairman Lucio Tan would provide bridge financing of
three billion pesos to keep ailing PAL flying until an
investor is found. The money would be used to pay for
aircraft leased from the US Export-Import Bank until April
when it is hoped PAL will have found a new investor as
specified in its rehabilitation plan.
Mr Tan was holding talks with institutional investors, two
from the US and two from Asia. There may be more than one
investor involved in taking up a controlling 40 per cent
stake in the airline.
PILTEL: Piltel in debt talks
----------------------------
According to the South China Morning Post, Piltel, a 50 per
cent owned cellular subsidiary of Philippine Long Distance
Telephone (PLDT), is in talks with creditors over debt
payments which have become due. PLDT is 17.2 per cent owned
by conglomerate First Pacific, which has operational
control of the company. PLDT said Piltel's situation would
not affect its ability to meet its own financial
obligations.
===============
T H A I L A N D
===============
PRANDA JEWELRY: Appoints Asset Plus in restructuring effort
-----------------------------------------------------------
Pranda Jewelry Plc is looking to increase sales by 7% this
year, with 10% growth in new markets as part of a stepped-
up export drive. Efforts would also continue to reduce
costs, improve management efficiency, product and service
development, training and technology, according to
executive chairman Prida Tiasuwan. The company has also
appointed Asset Plus Securities Co to oversee debt
restructuring and structural changes at Pranda and its
subsidiaries as part of its near-term strategic goals.
SANSIRI: Allotted the new issue share of Sansiri Pcl
----------------------------------------------------
Sansiri Public Company has informed the Stock Exchange of
Thailand that it will offer its new issue shares in the
amount of 250,000 shares with the par value of Baht 10.-
each to Merrill Lynch Phatra Securities Co., Ltd., one of
the 17 institution investors as specified in the SEC
Announcement, at the price of Baht 5.- per share. The
share subscription period of the said offer will commence
from January 11, 1999 to January 15, 1999 during 8.00 -
17.00 hour each day.
Thus the objective of this shares offering was to raise
money from Merrill Lynch Phatra Securities Co., Ltd. to
repay the outstanding debt owe to it. Prior to this
offering, Merrill Lynch Phatra Securities Co., Ltd. did not
hold any shares in the company so that after the
subscription of the said offering shares, Merrill Lynch
Phatra Securities Co., Ltd. will hold 250,000 shares in the
Company which equal to 0.18 % of the company's paid up
capital.
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 1999. 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 $575 for 6
months 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 * * *