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      T R O U B L E D   C O M P A N Y   R E P O R T E R     
  
                   A S I A   P A C I F I C      

         Wednesday, January 27, 1999, Vol. 2, No. 18
  
                          Headlines

* C H I N A   &   H O N G   K O N G *

FUJIAN ENTERPRISES: Fails to make $8m principal payment
GKC HOLDINGS: German Kitchen granted more time
GUANGDONG ENTERPRISES: S&P Pulls Rating on GDE Debt
GUANGDONG INTERNATIONAL: Gitic arm seeks deal on loans
GUANGDONG INTERNATIONAL: Gitic failure puts McDonald's on hold
GUANGNAN HOLDINGS: Suspicious Share Trading by Director
HB INTERNATIONAL: Investors and banks throw lifeline to HB
PEREGRINE INVESTMENTS: SFC softens probe into Peregrine fall
PEREGRINE INVESTMENTS: Liquidators Sell Swiss & Taiwanese Units
SING TAO: Scam puts Sing Tao sale under cost cloud
TAK WING: Sale proceeds to pay judgment
YI F TRADING: Eyebrows Raised over HK$1 Billion Loss

* J A P A N *

LONG TERM: Expects to Pay 800 Million of 3.7 Trillion Yen Due
YASUDA TRUST: Fuji Bank Said to be in "Serious Talks"

* K O R E A *

DONG AH CONSTRUCTION: Creditors Agree To Swap Equity for Debt
DONG AH GROUP: Selling Subsidiary & Land To Raise Cash
HANGUK DEVELOPMENT: Starts Workout Program
HANGUK ZIPPER: Company Bankrupt
SSANGYONG GROUP: Ssangyong oil unit sale stalled
SUNJIN METAL: Metal Company Starts Creditor Reconciliation

* M A L A Y S I A *

RENONG: Creditors Looking Forward to Final Restructuring Scheme
PROLINK DEVELOPMENT: Renong unit defaults on interest payment

* P H I L I P P I N E S *

PILIPINO TELEPHONE: Piltel suspends debt payments
PHILIPPINE AIRLINES: PAL will meet January 30 debt deadline
PHILIPPINE AIRLINES: Sufficiency of Equity Infusion Questioned
PHILIPPINE AIRLINES: PAL to announce top-level changes

* T H A I L A N D *

ALPHATECH ELECTRONICS: Founder Attempts Last-Minute Upset


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


FUJIAN ENTERPRISES: Fails to make $8m principal payment
-------------------------------------------------------
Fujian Enterprises (Holdings) this week to make an US$8 million
principal repayment on its $80 million syndicated loan, as it
proceeded with a debt and asset restructuring proposal.  This
brings the amount of principal repayment overdue since November
to $18 million - $8 million on the $80 million syndicated loan
arranged by CCIC Finance and another $10 million of principal on
a $70 million syndicated loan arranged by Standard Chartered
Bank.  As previously reported, the firm ceased repaying principal
in November but had continued to pay interest.

An official at one of the participating banks in the $80 million
loan told the South China Morning Post that he expects a
creditors' meeting to be held soon to decide on the next course
of action.

A Fujian Enterprise official told the Post that creditor banks
have been understanding of the firm's situation and no legal
action had been heard of. He said the firm had not made a final
decision on whether to appoint its creditor bank, CCIC Finance,
as its financial adviser but said it was looking for an
accounting firm to act as a financial adviser as well. He
said the firm was seeking a capital infusion from its owner, the
Fujian provincial government before an asset injection of two
billion yuan promised by the provincial government in November.


GKC HOLDINGS: German Kitchen granted more time
----------------------------------------------
GKC Holdings subsidiary German Kitchen (HK), facing a torrent of
litigation for unpaid debt, is solvent, a judge was told.
However, the judge said she had come across the company in a
different context to sugggest otherwise, notably bankruptcy
petitions against four former directors, all members of the Tang
family.  GKC is battling a winding-up petition brought by Citic
Beijing subsidiary Shortbridge. Yesterday, it won more time --
until close of court business on Friday -- to present to the
court affirmations on the board of directors and current
financial position of the company.  Another subsidiary, German
Kitchen (China) went into liquidation in October. Writs against
GKC Holdingss have been flooding into the High Court since July.


GUANGDONG ENTERPRISES: S&P Pulls Rating on GDE Debt
---------------------------------------------------
Standard & Poor's lowered its rating on Guangdong Enterprises
(Holdings) (GDE) from CCC-minus to "not meaningful", to reflect
the possibility of the company's failure to meet forthcoming
principal payments. It also lowered the firm's US$500 million
8.875 per cent senior unsecured notes and $250 million 8.75 per
cent senior unsecured notes to CC from CCC-minus and removed
them from CreditWatch, where they were placed on October 22 last
year.

The agency said the downgrade reflected major uncertainties
regarding the success of restructuring negotiations that will
affect scheduled payments on these issues.  Although GDE said it
would freeze principal repayments on debts until April 15, S&P
said it was uncertain whether the firm would be able to make the
next payments on rated bonds due in May and June.

Bankers told the morning news sources yesterday that they were
waiting for a proposal from the company on its debt and corporate
restructuring.  They reacted negatively to a report suggesting
GDE might propose cutting its principal repayments to lenders and
turn its debt into equity.  Analysts surveyed by the Post said
the suggestion was possible given that it was unlikely the GDE
group would be able to survive under the weight of its
outstanding debt.  A foreign-bank official added that he would
expect some banks to take legal action to recover their money if
the report was true.

By evening yesterday, bankers representing the eight creditor
banks said there had been no progress in negotiations for a
financial restructuring following yesterday's meeting. The banks
still do not have a clear understanding of the company's
financial position and have no confidence in a rumored cash
infusion from the Guangdong provincial government.


GUANGDONG INTERNATIONAL: Gitic arm seeks deal on loans
------------------------------------------------------
Gitic Enterprises is in talks with banks on the refinancing of
HK$84.6 million in borrowings, and should be finalised shortly.  
Controlling shareholder Gitic HK (Holdings) has guaranteed a loan
facility of up to US$2 million provided by a bank to one of Gitic
Enterprises' wholly owned subsidiaries. The outstanding amount
was US$900,000 as of yesterday.  Gitic HK's Secretary said the
liquidation of Gitic HK and forced bankruptcy of ultimate parent
Gitic had no serious impact on the firm which is presently
operating normally and has sufficient working capital to
maintain current operations assuming the continuing support of
its bankers, according to the South China Morning Post.

Trading in Gitic Enterprises has been suspended since the news of
Gitic's closure broke on October 7 and will remain suspended
until further notice.

According to the Hong Kong Standard, creditor banks of GDE
Holdings have agreed to designate PricewaterhouseCoopers as legal
adviser and Allen & Overy as legal counsel in ongoing  
negotiations for the financial restructuring of the firm.
Desigantions are subject to approval by GDE.

Standard Chartered Bank heads the eight-member steering committee
representing GDE's creditor banks in the financial restructuring
negotiations.  The other seven banks representing the creditors
of GDE are ABN Amro Bank, Bank of China, Bank of East Asia,
Banque Nationale de Paris, HypoVereinsbank, HSBC, Sanwa Bank.  
The steering committee is scheduled to meet with GDE again today
following meetings held on Tuesday night and Jan 12.

The bankers will vote on whether to grant the debt moratorium
being requested by GDE. A unanimous vote by the creditor banks on
the debt moratorium is required before it can be approved.  GDE
has asked for a temporary principal debt moratorium while it
undergoes a comprehensive restructuring. The proposal from GDE on
its debt and corporate restructuring is still pending. Standard
Chartered Banks spokesman said the market exhibits a
pessimistic view on the success of GDE's debt restructuring and
this may affect the scheduled payments.

The Intermediate Court of Guangzhou aims to clear all lawsuits
filed by creditors of collapsed Gitic within the first quarter of
the year, Shanghai-based Business News reports.


GUANGDONG INTERNATIONAL: Gitic failure puts McDonald's on hold
--------------------------------------------------------------
McDonald's expansion in northern Guangdong had been put on hold
following Gitic's forced bankruptcy, said the company's president
Don Dempsey yesterday.  Gitic is a 50-50 joint-venture partner
with McDonald's in Guangdong Guang Xin McDonald's Food, which
operates 37 outlets in Guangzhou and neighbouring areas.  Mr
Dempsey said McDonald's China wanted to buy out its partner's
stake to ensure minimum disruption to its expansion plans as well
as generating funds for redistribution to Gitic's creditors. He
said it was still unclear whether the Chinese government would
allow McDonald's to own 100 per cent of its operations or insist
it found another mainland partner. He said he had no idea how and
when Gitic's stakes in its joint ventures would be handled. A
source close to the Gitic liquidation committee said the court
had just accepted the bankruptcy case of Gitic and had yet to
make up an agenda on the liquidation process.


GUANGNAN HOLDINGS: Suspicious Share Trading by Director
-------------------------------------------------------
An independent director of financially troubled red chip Guangnan
Holdings, sold his entire personal stake in the company - 300,000
shares at $1.413 each on January 11, one day before it revealed
higher than expected debts, which sent its share price plunging,
according to a report appearing in the South China Morning Post.
He had exercised his share options and bought the shares at $2.36
each on February 18, 1997, indicating he sold the shares at a
sharp loss.  The Company's secretary said that the timing of the
share sale was coincidental, saying independent directors can
sell or buy their shares at any time.

Separately, a wholly owned subsidiary of Guangdong Enterprises
(Holdings), Guangnan Hong (Group), yesterday said it sold 18.2
million Guangnan shares, about 2 per cent of the red chip's total
issued share capital.

Guangnan Hong is a substantial shareholder in Gunagnan Holdings.

Analysts said the shares were sold the previous week as the stock
exchange rules required substantial shareholders to disclose any
changes in shareholdings within five days of dealings.


HB INTERNATIONAL: Investors and banks throw lifeline to HB
----------------------------------------------------------
According to the South China Morning Post, troubled telephone-
maker HB International Holdings has made an agreement in
principle with a consortium of investors and a number of banks
for a capital injection into the company and debt restructuring.
HB International said should the proposal proceed, the consortium
would hold 35 per cent of the share capital of the company.  As
of November, the company owed $860 million to banks and
creditors.


PEREGRINE INVESTMENTS: SFC softens probe into Peregrine fall
------------------------------------------------------------
The Securities and Futures Commission (SFC) has changed its
stance on an investigation into the collapse of Peregrine
Investments Holdings and is suggesting the government appoint an
independent investigator to launch a probe, unnamed sources tell
the South China Morning Post.  

An SFC report submitted to the Financial Services Bureau last
Friday has been passed to the Department of Justice for legal
advice on the evidence.  The report suggests that any
investigation should be limited in scope.  

Legislators and brokers have suggested that any investigation
into the collapse of Peregrine Investments Holdings focus on
directors' disclosure requirements and the background to the
loans that led to the company's demise.  Market sources said the
decision to scale matters down may be due to cost concerns, as a
full investigation could cost more than $50 million and take
years to complete.  However, a source close to the SFC denied to
a Post reporter that the decision was sparked by cost concerns,
saying it had more to do with the evidence uncovered.  Other
sources advised the Post an investigator could apply to the
Financial Secretary to expand its scope if new evidence arose.

It is understood the investigation will focus on the reasons for
the collapse of the investment bank, and whether any directors
gave misleading information to the market before the collapse. In
a public statement in October 1997, Peregrine denied it was in
financial difficulties. It collapsed in January last year.  The
huge loans made to Indonesian taxi company Steady Safe, which led
to the collapse, would also come under investigation.


PEREGRINE INVESTMENTS: Liquidators Sell Swiss & Taiwanese Units
---------------------------------------------------------------
According to the Hong Kong Standard, the liquidators of Peregrine
from PricewaterhouseCoopers yesterday announced that the sale of
Peregrine's equity interest in the operations of Peregrine
Securities (Switzerland) has been completed. The transaction
involved the sale of 100 per cent of the shares to Walter
Bollier, the Swiss unit's managing director. Last Friday,
Peregrine's stake in Peregrine Securities (Taiwan) were also
sold.


SING TAO: Scam puts Sing Tao sale under cost cloud
--------------------------------------------------
A bid to illegally boost circulation figures in the Hong Kong
Standard has cast a potential shadow over a $115.8 milion sale of
23 per cent stake in the company by Sally Aw Sian to Dublin-based
investment funds China Enterprise Development Fund (CEDF) and the
Investment Co of China (ICC), according to a report appearing in
the South China Morning Post.  

Conditions must be met by next Tuesday with the purchase due to
be completed about a fortnight after that. Informed sources told
the Post that due diligence has been completed but the accountant
of CEDF has been warned of unpredictable contingent liabilities
should advertising agents launch legal claims against it.

Financial analysts speculate that the potential contingent
liabilities could enhance CEDF and ICC's bargaining power.  CEDF
said they had been aware of the court case from the beginning of
the deal.  CEDF has offered $1.20 a share, a 36.36 per cent
premium to yesterday's close of 88 cents.

The deal has been complicated by a bankruptcy petition against Ms
Aw by tobacco magnate Ho Ying-chie.


TAK WING: Sale proceeds to pay judgment
---------------------------------------
Tak Wing Investment (Holdings) announced last night it had sold a
property worth $25.8 million, the proceeds of which will be used
to help pay off a $17.6 million court judgment.  At the same
time, Tak Wing said it was trying to negotiate a standstill
agreement for other debts it cannot currently pay.


YI F TRADING: Eyebrows Raised over HK$1 Billion Loss
----------------------------------------------------
Creditors are questioning how HK$1 billion in assets can't be
recovered from Yi F Trading.  The questions were raised as
creditors - including about two dozen banks - were told at a
meeting they might recover as little as 1.5 per cent of their
money, according to a report appearing in the South China Morning
Post.  Yi F was estimated to have assets of $1.05 billion as of
November 30, 1998, against $1.1 billion in liabilities, but the
estimated realisable value of the assets was put at only $16.9
million.  Banks -- purportedly secured -- are owed a total of
$825.2 million.  

Creditors formally appointed Thomas Stevenson, Matthew O'Driscoll
and Stephen Liu Yiu-keung of Ernst & Young as liquidators.

An inspection committee, comprising of Japan's Bank of Tokyo-
Mitsubishi and Sanwa Bank, and the mainland's China Merchants
Bank, China and South Sea Bank and National Commercial Bank was
formed yesterday according to the Post.

Mr Liu said Yi F did not have many tangible assets while its 20
properties, mostly in Hong Kong, were all pledged as collateral
to obtain loans.  A creditor bank official said liquidators had
only recovered about $500,000 so far, which might not be enough
to cover liquidation fees.  

Significant controversy surrounds $500.9 million due from Yi F's
related companies in Hong Kong.  Of that amount, only $9 million
is reportedly recoverable, or a recovery rate of less
than 2 per cent.  In addition, about $107.7 million due from
related companies in the mainland is reportedly uncollectable.  
On top of that, there were payments made to other parties
totalling $17.3 million that could not be recovered. Of the
firm's $190 million in investments, only about $4.97 million was
expected to be realised.  

A report appearing in the Hong Kong Standard, increases Ernst &
Young's estimates of realisable assets to $56 million.

As previously reported, Yi F is one of the first companies
connected with a government-owned Chinese investment firm to be
forced into liquidation by a foreign creditor.


=========
J A P A N
=========


LONG TERM: Expects to Pay 800 Million of 3.7 Trillion Yen Due
-------------------------------------------------------------
Takashi Anzai, president of the nationalized Long-Term Credit
Bank of Japan, said Monday that LTCB will not repay Bank of  
Japan loans totaling 3.7 trillion yen before the March 31 end of
fiscal 1998, according to a report circulated by Jiji Press.  At
the moment, LTCB's financial condition would allow it pay up to
around 800 billion yen of the total, Anzai told reporters.  But
LTCB, put under temporary government control in October under
Japan's  new banking system rehabilitation legislation, does not
plan to make repayments  within fiscal 1998 in view of a problem
concerning the ceiling on government guarantees for central bank
loans, he said.

The BOJ loans were supplied with governmental repayment
guarantees through Deposit Insurance Corp., Japan's banking
safety net, to help LTCB cope with a  run on the bank after
nationalization procedures started, Jiji explained.  If LTCB
repays the loans and takes fresh loans from the central bank
before  the end of the current year, the ceiling on government
guarantees for LTCB would be cut, Anzai noted.  Anzai also said
that LTCB is likely to finish assessing its loan portfolios in
early February, a step necessary for the bank's eventual sale to
the private  sector as stipulated under the banking system
rehabilitation legislation.

Regarding a plan to have former LTCB board directors repay their
retirement allowances to take responsibility for the bank's
collapse, he said that 23 former executives have agreed to
voluntarily hand back their allowances.  The 23 individuals are
expected to pay back their retirement benefits by the end of
March, Anzai said.


YASUDA TRUST: Fuji Bank Said to be in "Serious Talks"
-----------------------------------------------------
Fuji Bank Ltd said yesterday it was in serious talks with
financially strapped Yasuda Trust and Banking Co Ltd to
strengthen their  capital relations.  "We have entered concrete
talks with Yasuda Trust and Banking to further strengthen capital
relations aimed at around the end of March this year," Fuji Bank
said in a statement.  Banks close their annual financial accounts
at the end of March, Xinhua notes, a factor which has pressed
many into mergers and alliances as they struggle to cope with
their bad loan crisis.  Fuji is also expected to ask for 1
trillion yen (US$8.8 billion) in public funds from the
government.


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


DONG AH CONSTRUCTION: Creditors Agree To Swap Equity for Debt
-------------------------------------------------------------
Creditors of Dong Ah Construction Industry Company have agreed to
exchange 80.2 billion won worth of debts into equity as early as
next month.  This move is expected to assist Dong Ah Construction
to reduce it debt to equity ratio to below 200 percent before
the end of this year.  This firm has already reduced its capital
this month with a 1 for 3 stock share consolidation.

The Korea Times reports that Dong Ah Construction will be put
under the direct control of its prime creditor bank, the Seoul
Bank, which was recently itself sold to foreign interests.  
Following this announced debt for equity exchange, creditor
financial institutions will have a combined 53.5 percent stake in
the company.  

In October, the Korea Herald reported that the Dong Ah
Construction Industry Company had a debt to equity ratio of 590
percent.  Additionally, newspaper reports last fall also
announced that Dong Ah's was the successful bidder for Phase III
of the Lybian government's multi-billion dollar Great Man-Made
River Project.


DONG AH GROUP: Selling Subsidiary & Land To Raise Cash
------------------------------------------------------
A report in the Korea Times claims that Dong Ah Group has plans
to sell off by March its transportation subsidiary, Korean
Express, in order to raise capital it needs to normalize its
operations.  The report also indicates that Dong Ah has promised
to sell its reclaimed land in Inchon City to the state-run Korea
Asset Management Corporation in a "desperate" attempt to overcome
financial difficulties.


HANGUK DEVELOPMENT: Starts Workout Program
------------------------------------------
The Korean language Maeil Kyungje reports that the Hanguk
Development Lease Company's debt was frozen by its creditors
until the company could normalize its operations.  This was
decided at meeting of the creditor on January 25, 1999.  The
report mentioned that this workout action may cause the
bankruptcy of financial institutions that have given loans to the
Hanguk Development Lease Company.

In Korea, a workout procedure is aimed at helping firms hit by
temporary liquidity shortages to regain financial health and
competitiveness through debt relief and creditor offered
restructuring programs.  It is also hoped to reduce banks' non-
performing loans by improving borrowers' debt payment
capabilities.  However, the workout can also result in the
shareholders being asked to reduce capital and the disposal of
unprofitable assets and subsidiaries.  Furthermore, there is a
compulsory shake-up of the top management of "workout companies".


HANGUK ZIPPER: Company Bankrupt
-------------------------------
The Seoul District Court advertised in the Korean language Maeil
Kyungje that the Hanguk Zipper company went bankrupt.  Creditors
have until February 26, 1999 to file their claims.  The company's
address is 645 Choji-dong, Ansan-shi.


SSANGYONG GROUP: Ssangyong oil unit sale stalled
------------------------------------------------
Hong Kong news sources report that a plan put up last September
by cash-strapped Ssangyong Group to sell its 28 per cent stake in
its oil refiner seems to be going nowhere, raising speculation
that the government may step in to hasten the sale.  A Ssangyong
spokesman said earlier this week that the group was talking to
three to four domestic and foreign suitors but declined to reveal
names or national affiliations.


SUNJIN METAL: Metal Company Starts Creditor Reconciliation
----------------------------------------------------------
According to the Korean language Maeil Kyungje's Business Brief
section, the Sunjin Metal Company was allowed to start its
creditor reconciliation procedure by the Suwon District Court.


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


RENONG: Creditors Looking Forward to Final Restructuring Scheme
---------------------------------------------------------------
Renong creditors will meet with Malaysia's debt arbitration
committee in the second week of February to complete a final
restructuring scheme to keep the company afloat.  Monday,
Malaysia's Corporate Debt Restructuring Committee sent out
letters to Renong's creditors to inform them of a meeting to
brief them on a "final restructuring scheme" for Renong.

Earlier, bankers said Renong may have its cash-rich toll-road
unit sell a record RM8.5 billion in bonds.  The proposal is aimed
at supplanting a controversial plan to replace $10.5 billion of
debt at Renong and other developers with government bonds.  That
plan was shelved after the Malaysian Government failed to support
it, faced with accusations it was bailing out Renong chairman
Halim Saad.

According to the Hong Kong Standard, Renong has said in a
statement that Prolink planned to sell 428 hectares in southern
Johor state to SP Seita's Bukit Indah for 210.76 million ringgit,
down from the original selling price of 483.18 million ringgit.
Renong said the disposal at the original price would have
resulted in a gain of 159 million ringgit, but this would now be
38 million ringgit. The sale was proposed in 1996.

Renong also said the planned sale of a further 488 acres to
another unit of SP Seita, Shabra Development, for 223 million
ringgit had been cancelled.

Renong had recognised an after-tax gain of 15.7 million ringgit
for the year ended June 30, 1998 at group level. This would leave
22.3 million ringgit to be recognised after the completion of the
revised deal.

The land was originally intended for the development of high-end
properties but can now be developed as lower-end properties
following the government's decision to bar bank financing for
units costing 250,000 ringgit or more.


PROLINK DEVELOPMENT: Renong unit defaults on interest payment
-------------------------------------------------------------
Malaysian conglomerate Renong disclosed that its Prolink
Development subsidiary defaulted on interest payments amounting
to R$41.4 million. The company, which has close ties to the main
ruling party, said the interest payments involved loans of 616
million ringgit and that the default constituted a cross-default
on other debts amounting to 85 million ringgit.


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


PILIPINO TELEPHONE: Piltel suspends debt payments
-------------------------------------------------
Pilipino Telephone (Piltel), the mobile phone unit of Philippine
Long Distance Telephone (PLDT), has suspended interest and
principal payments on 34 billion pesos of debt as losses mount.
Michael Lonergan, Piltel's financial adviser, said PLDT had not
made a decision on how it would resolve the woes of its 57 per
cent-owned cellular phone unit. Piltel, the South China Morning
Post reports, has hired Lehman Brothers to help restructure its
debts. It hopes to complete a plan by the middle of next month.

According to the Hong Kong Standard, some bank debts of the phone
firm fell due last week and creditors are demanding payments.
Piltel's chief financial adviser Michael Lonergan said of the 34
billion pesos owed by Piltel, one third is due to Marubeni Corp
for the landline project in Mindanao, one third is convertible
bonds, and one third is to the banks.  He said Piltel is
continuing talks with around 20 creditor banks but no major
developments have been made yet. He said Piltel hoped it could
reach a workable payments arrangement with its creditor banks by
the middle of February.


PHILIPPINE AIRLINES: PAL will meet January 30 debt deadline
-----------------------------------------------------------
PAL chief adviser Peter Foster expressed confidence in a
television interview yesterday that the airline will make a
partial payment on US$100 million debt due January 30.  Mr.
Foster declined, however, to say how much in payments PAL would
make to these creditors.  

Philippine Securities and Exchange Commission chariman Perfecto
Yasay indicated that creditors have said unless PAL services some
of its debts in the next few days, they will take legal action
and will not approve management's rehabilitation plan to turn the
carrier around.

PAL has made no payments on its debts since July, when it was
granted a moratorium by the SEC pending approval of a
rehabilitation plan and creditors have become increasingly
impatient in recent months.

Industry sources quoted in Manila newspapers estimate management
will make month-end payments of about $60 million


PHILIPPINE AIRLINES: Sufficiency of Equity Infusion Questioned
--------------------------------------------------------------
Reports say that a panel of the Securities and Exchange
Commission studying a rehabilitation plan submitted by Philippine
Airlines (PAL) has asked the airline to explain why it needs
only US$150 million in new equity. The three-member task force
also recommended that the airline set aside part of its new
capital for debt payments or consider converting some of its debt
into equity while undergoing rehabilitation.  The committee said
there should be a program or justification on the proposed US$150
million equity investment.

As previously reported, a new partner injecting US$150 million
will hold 90.9 per cent of the airline's shares, leaving present
owners with a 9.1 per cent stake.

Additionally, the Committee is concerned by inadequate cuts in
the airline's 800-strong workforce given its reduced fleet size
of only 22 aircraft.


PHILIPPINE AIRLINES: PAL to announce top-level changes
------------------------------------------------------
Philippine Airlines (PAL) is expected to announce changes to top-
level management in the next few days, according to a senior
airline official interviewed by the South China Morning Post.   
PAL reportedly has proposed a corporate rehabilitation plan which
is being evaluated by Manila's Securities and Exchange Commission
(SEC).

As previously reported, most of PAL's creditors have objected to
the plan. The SEC is to decide whether to approve the plan next
month. If the plan is unworkable, SEC chairman Perfecto Yasay has
said the commission may order the airline's closure. Yesterday,
the SEC aproved changes in a committee composed of senior
airline managers who are forging the rehabilitation plan.

Philippine law prevents foreigners from holding top management
posts.  PAL director Lusi Juan Virata, chairman of Jardine
Fleming Exchange Capital and reportedly a financial adviser to Mr
Tan, will also join the SEC-appointed committee. According to a
report published today in the Far Eastern Economic Review, Mr Tan
has offered to move over in favor of Mr Virata. Retained on the
committee were chief finance officer Jaime Bautista and an SEC
representative. Airline sources have suggested that Mr Bautista
is in line to fill the vacant post of president.

According to the Hong Kong Standard, the chief of PAL Lucio Tan
plans to step down in the next few weeks in a bid to save the
carrier from foreclosure, a leading Asian magazine said
yesterday.  The Far Eastern Economic Review said in a preview of
its latest edition that Lucio Tan is trying to placate creditors
demanding a US$60 million payment on the airline;'s debts of
US$1.2 billion by offering to surrender management control.

A SEC task force also said the airline must set a time frame for
the entry of a foreign partner which should be required to
deposit part of its investment in an escrow account as a sign of
goodwill.

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


ALPHATECH ELECTRONICS: Founder Attempts Last-Minute Upset
---------------------------------------------------------
Charn Uswachoke, the founder and former Chief Executive Officer
of Alphatec Electronics (ATEC) claims that $40 million is too
little for the proposed sale of an 80 percent stake in ATEC to
potential buyers AIG and Investor AB.  Charn reasons, according
to Business Day, that the global trend of ATEC's integrated
circuit (IC) business was likely to recover in the the last
quarter of this year, and as such, ATEC should be able to fetch a
higher sum for its equity.

The sale of the 80% stake underpins the company's rehabilitation
plan prepared by a unit of PricewaterhouseCoopers.  The plan is
to be presented for final approval by ATEC's creditors at a
meeting today.

Charn is asserting that ATEC's assets alone, including land,
factory and machinery, have a higher estimated value than the
proposed $40 million offered by AIG and Investor AB under the
rehabilitation plan -- and future earnings drive the value
higher.

"The cycle of IC business takes about two to three years to
rebound.  With this assumption, new partners of ATEC would gain
a much higher return from their $40 million investment in ATEC,"
Charn told Business Day.  

Krung Thai Bank -- which voted down ATEC's previous plan -- last
Friday took a final decision on whether or not to support ATEC's
rehabilitation plan but refused to disclose its stance, saying
that its decision had been passed on to the Bank of Thailand
(BOT), which oversees the Financial Institution Development Fund
(FIDF), the major shareholder of KTB.  The rehabilitation plan is
to be submitted to the court this Friday if approved by creditors
today.


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
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