/raid1/www/Hosts/bankrupt/TCRAP_Public/990204.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      

      Thursday, February 4, 1999, Vol. 2, No. 24

                    Headlines


* C H I N A   &   H O N G   K O N G *

BANK OF EAST ASIA: Bad loans hit Hong Kong bank
CHANGCHENG TRUST: China to close five trust companies
DALIAN INTERNATIONAL: Ditic puts debts at less than US$200m
DONGFANG TRUST: China to close five trust companies
HUARONG TRUST: China to close five trust companies

INTERFORM CERAMICS: Seeks extension for rescue proposal
PEOPLE'S INSURANCE: China to close five trust companies
PEREGRINE GROUP: Peregrine liquidator fees top $100m
SING TAO: Judge rejects Aw stake sale over creditor fears
UDL KENWORTH: Winding-up hearing set for March

WAH TAK FUNG: No standstill agreement reached with banks
XINDA TRUST: China to close five trust companies
ZHONGBAO TRUST: China to close five trust companies


* J A P A N *

NATIONAL BANK OF FIJI: Colonial to take over Fiji bank
NOMURA SECURITIES: No plan to sell Daiwa Bank shares
SUMITOMO RUBBER: To form alliance with Goodyear


* K O R E A *

CHUNGBUK BANK: FSC concludes bank is non-viable
DAEWOO CORP: Iranian payments to Daewoo Corp. delayed
GEOSON: To be hit hard by Hyundai takeover of Kia Motors
KOREA CREDIT: Daewoo/Samsung swap could harm Korea Credit
LG CAPITAL: To be hit hard by Hyundai takeover of Kia

LG-EDS SYSTEMS: Will lose client in Hyundai/LG swap
MBC ADCOM: To be hit hard by Hyundai takeover of Kia Motors
SAMSUNG CARD: Big loser in Samsung/Daewoo swap
SAMSUNG ELECTRO-MECHANICS: Big loser in Samsung/Daewoo swap
SEOULBANK: HSBC leads Seoulbank takeover race


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

PHILIPPINE AIRLINES: Boeing rejects rehabilitation plan


* T H A I L A N D *

ALPHATEC ELECTRONICS: Creditors agree on debt restructuring
THAI PETROCHEMICAL: Two creditors holding up restructuring


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

BANK OF EAST ASIA: Bad loans hit Hong Kong bank
-----------------------------------------------
Confirming fears that bad Chinese loans are an
escalating problem, one of Hong Kong's biggest banks said
Tuesday its profits plunged 56 percent last year after it
wrote off $192 million in unrecoverable debt.

A significant portion of the Bank of East Asia's bad loans
were made to the bankrupt Guangdong International Trust and
Investment Corp., known as Gitic. But even twice as many
debts to other Chinese borrowers were written off by the
Bank of East Asia, reflecting its increasingly cautious
approach to lending troubles on the mainland.

"We didn't expect Gitic to happen. We didn't expect a lot
of things to happen. We were caught by surprise as much as
a lot of people," the bank's chairman, David Li, told
analysts and journalists. He said 1999 would be "equally
difficult."

In addition to writing off 100 percent of its loans to
Gitic, Bank of East Asia said it also wrote off the
equivalent of 20 percent of its loans to other Chinese
investment trusts that are still in business, while writing
off the equivalent of 5 percent of its loans to Chinese
companies.

Analysts estimated the Gitic loan writeoffs came to an
additional $38.5 million. Excluding Gitic, the bad-loan
provisions elsewhere in China totaled $80 million, said
Daniel Wan, the bank's chief financial officer. The bank
has $1.6 billion in loans to China or 14.9 percent of its
outstanding lending.

It said its profit slumped to 927 million Hong Kong
dollars, or $120 million, in 1998, compared with 2.1
billion Hong Kong dollars in 1997. Without writing off bad
Chinese loans, the bank's profit would have dipped just 2.7
percent. (AP Online 02-Feb-1999)


CHANGCHENG TRUST: China to close five trust companies
-----------------------------------------------------
The Asian Wall Street Journal reported in a front page
story that Chinese regulators plans to close at least five
of the biggest state investment trust companies as part of
an overhaul of the nation's financial institutions.

Changcheng Trust & Investment is controlled by the
Agricultural Bank of China.


DALIAN INTERNATIONAL: Ditic puts debts at less than US$200m
-----------------------------------------------------------
According to the scmp, Dalian International Trust and
Investment Corp (Ditic) said the firm had outstanding
foreign debts of only US$100 million to US$200 million. The
figure accounted for a great majority of borrowings, mostly
long-term debts and is much less than the figures quoted in
previous reports.

He said the firm would not need government aid but would
rely on the returns they got from their investments to
repay debts. He said banks are willing to cooperate in
solving the problem, citing that bankers involved in a
US$20 million certificate of deposit on which the firm had
defaulted on a repayment in October would meet company
officials in Dalian this week to talk about the issue.

According to a Salomon Smith Barney research report, the
firm had assets of 3.7 billion yuan against liabilities of
3.2 billion yuan in 1997.

The report classified the firm as of relatively moderate
risk because of its very weak liquidity.


DONGFANG TRUST: China to close five trust companies
---------------------------------------------------
The Asian Wall Street Journal reported in a front page
story that Chinese regulators plans to close at least five
of the biggest state investment trust companies as part of
an overhaul of the nation's financial institutions.

Dongfang Trust & Investment is owned by the Bank of China.


HUARONG TRUST: China to close five trust companies
--------------------------------------------------
The Asian Wall Street Journal reported in a front page
story that Chinese regulators plans to close at least five
of the biggest state investment trust companies as part of
an overhaul of the nation's financial institutions.

Huarong Trust & Investment is owned by the Industrial and
Commercial Bank of China.


INTERFORM CERAMICS: Seeks extension for rescue proposal
-------------------------------------------------------
Reference is made to the joint announcement of China Wealth
Group Company Limited and Interform Ceramics Technologies
Limited dated 12th January, 1999 in relation to a
restructuring and rescue proposal of Interform. A scheme
document in relation to the Proposal should have been sent
to the shareholders of Interform by 2nd February, 1999 as
required by the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited and the Hong
Kong Code on Takeovers and Mergers. However, as more time
is needed to prepare the financial information required for
inclusion in the Document, including audited accounts of
Interform, application has been made by the Investor and
Interform to The Stock Exchange of Hong Kong Limited and
the Securities and Futures Commission for an extension of
time for the despatch of the Document to a date not later
than 31st March, 1999. (Stock Exchange of Hong Kong
03-Feb-1999)


PEOPLE'S INSURANCE: China to close five trust companies
-------------------------------------------------------
The Asian Wall Street Journal reported in a front page
story that Chinese regulators plans to close at least five
of the biggest state investment trust companies as part of
an overhaul of the nation's financial institutions.

Additionally, the article stated that the investment arm of
China's near monopoly insurance firm, People's Insurance
Company of China, will also be closed.  


PEREGRINE GROUP: Peregrine liquidator fees top $100m
----------------------------------------------------
According to the South China Morning Post, liquidators of
the collapsed Peregrine investment bank --
PricewaterhouseCoopers -- are charging more than $100
million for the first year of work -- January 13 until
December 31 -- on the five-year project. Creditor
representatives are expected to pressure
PricewaterhouseCoopers for justification of the spiralling
costs in their meetings today and tomorrow. One source said
the creditors would seek to have the liquidators contract
out low-skilled tasks.

Last month, the liquidators said they had recovered about
$3.17 billion worth of the group's assets, of expected
realisable assets of about $5.81 billion.

The legal firms involved in the liquidation, Clifford
Chance and Deacons Graham & James, have charged a total of
$27 million for the liquidation of Peregrine Investments
Holdings and an unknown sum for the other Peregrine
entities.

Total payments sought from Peregrine Investments Holdings,
the parent company of the group, were $128 million for the
$398 million worth of assets recovered so far. The payments
cover the fees of liquidators and legal firms, as well as
$25 million spent on the salaries of former staff, $10
million for insurance payments and $3.7 million for the
leasing of premises.

PricewaterhouseCoopers partner in charge of the
liquidation, David Hague, noted that the various committees
of inspection had so far approved all fee requests during
the post-provisional liquidation period, which started last
March. He said that the liquidators had so far received
only about a third of the fees requested for the three
months of provisional liquidation. He said the liquidation
had generated highly complex legal and other issues, which
are in some cases unique.

The liquidators are expected to make their first payment to
creditors in middle of the year.


SING TAO: Judge rejects Aw stake sale over creditor fears
---------------------------------------------------------
According to the South China Morning Post, Sally Aw Sian's
bid to sell 23 per cent of Sing Tao Holdings to Sunrise
Holdings has been vetoed by a judge amid fears the deal
provided no immediate benefit to unsecured creditors.

Sunrise is forced to seek validation of the proposed deal
after a bankruptcy petition was filed against Ms Aw on
January 8 by a company linked to Hong Kong Tobacco chief Ho
Ying-chie, to whom Ms Aw was indebted to the tune of $274
million.

The judge ruled that creditors of the cash-strapped Sing
Tao chairman would best benefit from another proposal which
Ms Aw snubbed at the eleventh hour. An offer by Lazard Asia
Investment Management to buy Ms Aw's entire 50.04 per cent
Sing Tao stake for $262.5 million was still on the cards.

By December 8, a draft agreement was ready to be signed
with Lazard. Ms Aw failed to up for signing the necessary
papers and instead entered into the Sunrise deal. Letters
from Lazard exhibited in court showed a continued interest
in buying the 50.04 per cent block of Sing Tao shares under
the same terms and conditions.

Under Sunrise's proposed deal, Ms Aw would grant a
management company to be named by Sunrise an option to
acquire an extra 10 per cent of the issued share capital of
Sing Tao within two years at a price of $1.38 per share. Ms
Aw would retain 17 per cent if the option was exercised in
full and would remain chairman. The judge said the deal
would leave at large what is to happen to the remaining
block of shares. Sunrise would have the right to nominate
four directors in total to replace existing appointments.
The judge remarked that the key to the Sunrise transaction
is the passing of board control from Ms Aw to the  
purchaser.

The apparent involvement of the Aw Boon Haw foundation in
the Sunrise proposal was also scrutinised by the judge.
Several days after Ms Aw entered into the Sunrise proposal,
the foundation entered into an agreement to sell Tiger Balm
Garden to a subsidiary of Cheung Kong (Holdings) for $100
million. The judge ruled that Ms Aw might have entered into
some arrangement or understanding for the foundation to
apply the proceeds of $100 million form the sale of Tiger
Balm Garden to purchase most, if not all, of her remaining
shares.

A proposal by Lazard Asia Investment Management to buy her
entire stake in the company includes a consultancy fee of
$9 million a year for Ms Aw.

If a bankruptcy order was made, Ms Aw would be disqualified
from being a chairman but it would have no impact on the
consultancy agreement. Unsecured creditors would thus
benefit from a fee arrangement.

A general offer would also be made to public shareholders
of Sing Tao at $1.25 per share. For Ms Aw, it would also
mean a $63 million loan by Lazard, repayable after six
years, and an entitlement to a share in profits in the
event of any sale within six years of the shares acquired
at a price in excess of the trigger price.


UDL KENWORTH: Winding-up hearing set for March
----------------------------------------------
The respective board of directors of UDL Holdings Limited
and KEL Holdings Limited, a 75 % subsidiary of UDL would
like to advise that a winding-up petition filed on 20
January 1999 at the High Court of the Hong Kong Special
Administrative Region Court of First Instance by Mr. Yun
Wing Hong together with 83 other claimants against UDL
Kenworth Engineering Limited, a wholly-owned subsidiary of
KEL, is received today with the hearing date being fixed at
31 March 1999.

The Petitioners were employed by UDL Kenworth's sub-
contractor, W&H Engineering Limited for the air
conditioning and mechanical ventilation installation for
Redevelopment of Wang Tau Hom Estate Phase 12. The
Petitioners are claiming outstanding wages totaling
HK$549,999.52 due from W&H together with costs of
HK$2,250.00 and interest thereon.

As UDL is undertaking a scheme of arrangement with
creditors and KEL is arranging an interim financing plan
with interested investor, the Boards of UDL and KEL have
considered to take no further action until the date of the
hearing. Both the Boards of UDL and KEL are of the view
that the said winding-up petition has no significant impact
on UDL and KEL. (Stock Exchange of Hong Kong 03-Feb-1999)


WAH TAK FUNG: No standstill agreement reached with banks
--------------------------------------------------------
Wah Tak Fung Holdings Limited has announced as at 2
February 1999, the outstanding aggregate amounts due from
the group to the banks and trade creditors are
approximately HK$1,293 million (out of which approximately
HK$48 million is overdue) and HK$21 million (out of which
approximately HK$16 million is overdue) respectively.
     
A meeting of the Banks was convened and held by the Company
on 2 February 1999 and the Company advised the Banks that
the Group has insufficient funds to service interest and
principal repayments. The Group has therefore requested
that a restructuring of the Group's borrowings be
negotiated on a confidential basis with the Banks, all of
which are secured.  To date, none of the Banks or Trade
Creditors has instituted legal proceedings against the
Company or any member of the Group.  As at the date of this
announcement, no formal standstill agreement has been
reached with the Banks.  The discussions with the Bank may
or may not result in the conclusion of a formal standstill
agreement and it is uncertain as to whether such formal
standstill agreement can be reached with the Banks.
     
The Board of the Company is actively seeking external
funding and is in preliminary discussions on a confidential
basis with several potential investors for investing in the
Group.  As at the date of this announcement, no agreement
has been reached with any such potential investors.  The
discussions with the potential investors may or may not
result in the conclusion of any formal agreement and it is
uncertain as to whether such formal agreement can be
reached with any such potential investors. (Stock Exchange
of Hong Kong 03-Feb-1999)


XINDA TRUST: China to close five trust companies
------------------------------------------------
The Asian Wall Street Journal reported in a front page
story that Chinese regulators plans to close at least five
of the biggest state investment trust companies as part of
an overhaul of the nation's financial institutions.

Xinda Trust & Investment is owned by the China Construction
Bank.


ZHONGBAO TRUST: China to close five trust companies
---------------------------------------------------
The Asian Wall Street Journal reported in a front page
story that Chinese regulators plans to close at least five
of the biggest state investment trust companies as part of
an overhaul of the nation's financial institutions.

Zhongbao Trust is controlled by the People's Insurance Corp
of China.


=========
J A P A N  
=========

NATIONAL BANK OF FIJI: Colonial to take over Fiji bank
------------------------------------------------------
According to the Hong Kong Standard, Australian life
insurance company Colonial has signed a deal with Fiji's
government for its 51 per cent stake in Fiji's financially
troubled National Bank. The deal, which still needs the
approval of Fiji's parliament and central bank, calls for
Colonial to pay A$9.5 million for its stake in the state-
owned bank. The National Bank of Fiji, which will be
renamed Colonial National Bank, was restructured three
years ago after it was rocked by a scandal involving bad
debts that sent it into near-liquidation.


NOMURA SECURITIES: No plan to sell Daiwa Bank shares
----------------------------------------------------
Nomura Securities Co. has told the Financial Supervisory
Agency that the brokerage house has no plan to sell its
stake in Daiwa Bank, a senior FSA official said Tuesday.

FSA Deputy Commissioner Hideichiro Hamanaka made the
comment at a news conference, denying a newspaper report
that Nomura is considering the sale of its holdings in
Daiwa Bank to improve the broker's financial strength.
Nomura is the top shareholder in the city bank with a  
stake of about 3.1 pct. (Jiji Press English News
02-Feb-1999)


SUMITOMO RUBBER: To form alliance with Goodyear
-----------------------------------------------
Goodyear Tire and Rubber Co., in a move that would vault it
back to No. 1 among world tire makers, announced Wednesday
a broad alliance with Japan's Sumitomo Rubber Industries
Ltd. giving Goodyear effective control of Sumitomo's U.S.
and European operations and a minority stake in Sumitomo
itself.

Under the complex deal with Sumitomo, Goodyear would
acquire 10% of the Japanese tire maker and Sumitomo would
get a smaller stake in Goodyear. In addition, Goodyear
would pay Sumitomo $936 million in return for Sumitomo's
contributions to joint ventures to be formed with Goodyear.

The deal is the latest in a series of moves by U.S.
companies to take advantage of the distress in Japan's
industrial and financial sectors to shore up their global
positions. Sumitomo, the No. 5 tire maker world-wide with
about $4 billion in revenue, is saddled with nearly $2.8
billion in debt, compared with a market capitalization of
just $1 billion.

In addition, Goodyear and Sumitomo would combine research
and purchasing activities in joint ventures, people
knowledgeable about the deal said. The purchasing joint
venture and other restructuring could save a total of more
than $300 million a year by the third year on the two
companies' combined costs.

Advisers in the deal were Morgan Stanley Dean Witter & Co.
for Goodyear and Warburg Dillon Read, a unit of UBS AG, for
Sumitomo. (Wall Street Journal 03-Feb-1999)


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

CHUNGBUK BANK: FSC concludes bank is non-viable
-----------------------------------------------
The Korea Times reported that the Financial Supervisory
Commission (FSC) has ordered the Chungbuk Bank to merge
with other banks by the end of April, of face punitive
actions that include shutdown or liquidation. A similar
story in the Korea Herald cited an FSC official as saying
that Chungbuk is not viable by itself.  

Chungbuk, with headquarters in Chongju, North Chongchong
Province, suffered a net loss of 242.6 billion won last
year. Furthermore, its capital adequacy ratio calculated
using the standards of the Bank for International
Settlements (BIS) stood at minus 3.4 percent last year, far
below the minimum required 8 percent level.

The bank's total debt has been reported to exceed 60.9
billion won, and FSC officials stated that Chungbuk is
unable to properly function as a commercial bank due to its
poor financial condition.

In June of last year, the FSC established an evaluating
committee to diagnose 12 commercial banks which failed to
meet the minimum 8 percent BIS capital adequacy
requirements. It issued closure orders for five banks, and
has asked 7 other banks (including the Chungbuk Bank) to
provide drastic self rehabilitation plans. These plans
included payroll cuts, management layoffs, capital
increases or decreases, and mergers with stronger banks.  
The FSC reportedly plans to keep alive only those banks
that are able to meet the 8 percent BIS capital adequacy
ratio by June, 2000 via these new rehabilitation plans.  


DAEWOO CORP: Iranian payments to Daewoo Corp. delayed
-----------------------------------------------------
The Korea Times reported that Iran's central bank has asked
to defer a $100 million export payment to the Daewoo
Corporation for one and a half years. A serious lack of
foreign reserves in Iran due to the drop in oil prices was
mentioned as the reason for the request. Iran has even
suggested that Seoul make a $100 million advance payment on
oil imports to Korea so that Iran can make its export
payments.

The Daewoo Corporation is the trading and construction
division of the Daewoo Group, and had its ratings on its
bonds and commercial paper lowered three notches by Korea
Investors Services, a local credit rating agency, last
week.


GEOSON: To be hit hard by Hyundai takeover of Kia Motors
--------------------------------------------------------
The Korea Herald reported in an article about the wide
spread affects of the ongoing government instigated "big
deal" industrial consolidations and business swaps that
Geoson Company will be hit hard by the Hyundai Motor
Company acquisition of Kia Motors. Geoson provided
professional services to Kia, which are anticipated to be
provided in the future by Hyundai.


KOREA CREDIT: Daewoo/Samsung swap could harm Korea Credit
---------------------------------------------------------
The Korea Herald reported in an article about the wide
spread affects of the ongoing government instigated "big
deal" industrial consolidations and business swaps that
executives of the Korea Credit Company are worried about
their firm's future.  

The article pointed out the Korea Credit is a home
appliance retailer with depends on Daewoo Electronics for
about 70 percent of its supplies. A Korea Credit executive
stated that if Daewoo Electronics is absorbed by Samsung
Electronics Company, it would be a fatal blow for Korea
Credit.


LG CAPITAL: To be hit hard by Hyundai takeover of Kia
-----------------------------------------------------
The Korea Herald reported in an article about the wide
spread affects of the ongoing government instigated "big
deal" industrial consolidations and business swaps that LG
Capital will be hit hard by the Hyundai Motor Company
acquisition of Kia Motors. LG Capital provided financing
services to Kia, which are anticipated to be provided in
the future by Hyundai.


LG-EDS SYSTEMS: Will lose client in Hyundai/LG swap
---------------------------------------------------
The Korea Herald reported in an article about the wide
spread affects of the ongoing government instigated 'big
deal' industrial consolidations and business swaps that LG-
EDS Systems Inc. will lose a major client if Hyundai takes
over LG Semicon. LG-EDS Systems currently earns about 4
billion won per year maintaining the computer system of LG
Semicon, and is likely to see huge operational losses
following the completion of the Hyundai takeover.


MBC ADCOM: To be hit hard by Hyundai takeover of Kia Motors
-----------------------------------------------------------
The Korea Herald reported in an article about the wide
spread affects of the ongoing government instigated "big
deal" industrial consolidations and business swaps that MBC
Adcom will be hit hard by the Hyundai Motor Company
acquisition of Kia Motors. MBC Adcom provided advertising
services to Kia.


SAMSUNG CARD: Big loser in Samsung/Daewoo swap
----------------------------------------------
The Korea Herald reported in an article about the wide
spread affects of the ongoing government instigated "big
deal" industrial consolidations and business swaps that two
subsidiaries of the Samsung Group will be big losers in the
Daewoo Motors acquisition of Samsung Motors Company.

Samsung Electro-Mechanics Company has invested about 1
trillion won in auto parts manufacturing technology. This
subsidiary, together with Samsung Card Company, are
expected to suffer greatly when Samsung gives up control of
its automobile manufacturing arm.


SAMSUNG ELECTRO-MECHANICS: Big loser in Samsung/Daewoo swap
-----------------------------------------------------------
The Korea Herald reported in an article about the wide
spread affects of the ongoing government instigated "big
deal" industrial consolidations and business swaps that two
subsidiaries of the Samsung Group will be big losers in the
Daewoo Motors acquisition of Samsung Motors Company.

Samsung Electro-Mechanics Company has invested about 1
trillion won in auto parts manufacturing technology. This
subsidiary, together with Samsung Card Company, are
expected to suffer greatly when Samsung gives up control of
its automobile manufacturing arm.


SEOULBANK: HSBC leads Seoulbank takeover race
---------------------------------------------
According to the Hong Kong Standard, a unit of HSBC
Holdings is leading an international race to take over
South Korea's nationalised Seoulbank as the London-based
bank has made a concession on deal terms, sources in Seoul
said. An industry source said is has made many concessions
from its earlier stance and is still a strong candidate.
HSBC has been widely believed to be a potential buyer of
Seoulbank as Lee Hun Jai, the chairman of the Financial
Supervisory Commission, has said he wanted to see the bank
sold to a non-US bank. However, the South Korean government
continues to talk with HSBC and three US banks about a
controlling stake in Seoulbank.


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

PHILIPPINE AIRLINES: Boeing rejects rehabilitation plan
-------------------------------------------------------
The Asian Wall Street Journal reported that the Boeing
Company has officially objected to the Philippine Airlines
(PAL) rehabilitation plan currently before the Philippine
Securities Exchange Commission (SEC).

Boeing said in a statement to the SEC that it opposed the
plan because it offers no payment on its claim for damages
against PAL for canceling an order of seven Boeing 747-400
jets.  

PAL signed an agreement in September 1996 to buy seven jets
from Boeing for about $900 million. This was part of an
ambitious PAL expansion plan that was later scrapped.  

Last week, PAL made a payment of $38 million on its
creditors, which was the first time since last June it has
serviced its more than $2.2 billion debt.


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

ALPHATEC ELECTRONICS: Creditors agree on debt restructuring
-----------------------------------------------------------
After a seven-month delay, 85 percent of Alphatec
Electronics Plc's local and foreign creditors, who hold a
combined 75 percent of the firm's debts worth US$362
million, Tuesday approved the company's plan to restructure
its debts and operations. The creditors approved five of
the six proposed changes in the plan, including the one
proposed by Krung Thai Bank (KTB) on the wording that will
ensure that creditors retain the right to pursue claims on
former management and former auditor Peat Marvick Suthee.

The firm's former management, led by Charn Usawachoke, was
alleged to have siphoned off more than 5 billion baht
(US$136.31 million) of company funds.

KTB, which holds 26 percent of the total debts, including
senior secured debts, also retained the right to claim,
although Alphatec's assets will be transferred to a new
holding firm of new investors and creditors, called
Alphatec Holding.

American International Assurance and a unit of Ericsson
have pledged to invest in a new fund of $40 billion in the
business.

According to the approved rehabilitation plan, creditors'
right to claim has been divided into two parts. First,
creditors can get payment from Alphatec Holding.
Alternatively, they can seek pay back from the old Alphatec
Electronics, which will become one of the shareholders of
the holding company.

Alphatec Holding will own 99.9 percent in Alphatec
Semiconductor Packaging Co (ASP), which will be set up to
take over the assets and run the business of Alphatec
Electronics.

Willem de Vries, president of Alphatec Electronics, will be
named the chief executive of ASP.

Of the $362 million debt, 3 percent or $10 million will be
converted into equity in the holding firm. Another $35
million will be paid back over a five-year period. Pay-back
of another $55 million will depend on future company
performance.

The remaining $262 million will be written off or pursued
by creditors. Creditors writing off the loan will get tax
credit but not proceeds from the disposal of non-core
assets. Trade creditors will get 30 percent to 40 percent
of the debt.

For the first nine months of 1998, the firm reported a loss
of 1.24 billion baht ($33.81 million) on revenue of 2.91
billion baht ($79.33 million). Business is forecast to
double over the next four years.

Kongkiat Opas-ongkarn, president of Asset Plus Plc, said
Alphatec's success should lead banks to achieve results in
debt restructuring cases. He said significant haircuts or
loss-sharing among creditors are not unusual for commercial
banks or foreign financial institutions, but is new for
Thailand, especially for state-owned banks.

Wisit Wisitsor-at, a senior official at the Justice
Ministry who coordinated the creditors meeting, said a
total 1,074 creditors approved the plan while 13 opposed it
and 24 abstained. He said Alphatec is the first Thai
company that has won creditors' approval under the business
rehabilitation law.

The new company, Alphatec Holding Co, which will own 99.9
percent of ASP, will also own 51 percent of Alphatec
Electronics Corporation of Shanghai, and 100 percent of the
sales and marketing company in the US which will become
Alphatec Services Co. ASP will in turn purchase the core
operating fixed assets and transfer the staff of Alphatec
Electronics operation in Chachoengsao.

The financial creditors will become the principal
shareholders in Alphatec Electronics Public Company Limited
through the reduction of present shareholders equity in
light of the present value.

The creditors will also receive: $10 million in shares of
Alphatec Holding Co.; secured debt of $35 million in ASP; a
performance-linked obligation from ASP of $55 million; any
money received from legal action against the former
management and auditor; any money received from the sale of
the remaining assets of Alphatec Electronics.

After the court order formalizing the reorganization, the
investors and creditors will work out the details of a
shareholders agreement. It is assumed that all the legal
work can be accomplished within four to five weeks and the
new companies will become operational in March.
(The Nation 03-Feb-1999)


THAI PETROCHEMICAL: Two creditors holding up restructuring
----------------------------------------------------------
Thai Petrochemical Industry plc yesterday charged in
strongly-worded remarks that the International Finance
Corp, the investment arm of the World Bank, and the
Commonwealth Bank of Australia, of contributing to a delay
in its restructuring plan for its huge US$3.2 billion debt.

TPI Group, a conglomerate of petrochemical, oil and cement
firms, with a combined foreign currency debt of more than
US$4.2 billion is the country's second largest private-
sector debtor after Siam Cement Group's US$5 billion.

Patchaneeya Sukcharoen, assistant vice president of TPI,
said: "Eleven (of the 14 creditors on the creditors
steering committee) had approved the plan, the US Exim Bank
has abstained and only IFC and CBA opposed the plan taking
the extreme position that they want 15 per cent of the
threshold vote to call for financial default and foreclose
the company."

She also said that IFC resigned from the steering committee
and voted against the plan in December even though a
majority of creditors had indicated approval at the
meeting.

IFC and its group of creditors, which together lent a
combined US$500 million to TPI accounting for 15 per cent
of the firm's total debt, are understood to have pressed
for the right to call a default with 15 per cent debt,
whereas 72 per cent of TPI creditors have supported the
plan in which creditors need at least 25 per cent of debt
to call a default.

The TPI case is still out of court.

Sources said some creditors see their claims as superior to
shareholders' rights, given that the company has defaulted.  
Prachai Leopairatana, chief executive officer and major
shareholder of TPI, has so far resisted pressure for
creditors to have 85 per cent controlling interest on
default.

In the restructuring plan -- so far supported by 72 per
cent of the creditors -- creditors have a 75 per cent
controlling interest.

In addition to TPI's US$3.2 billion debt, affiliate TPI
Polene plc owes more than US$1 billion to nearly 150
foreign and local creditors. (The Nation 02-Feb-1999)


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