/raid1/www/Hosts/bankrupt/TCRAP_Public/990208.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      

      Monday, February 8, 1999, Vol. 2, No. 26

                    Headlines


* C H I N A   &   H O N G   K O N G *

ALBATRONICS (FAR EAST): Debt restructuring in works
GUANGDONG ENTERPISES: Guangdong plans $15b asset boost
GUANGDONG INTERNATIONAL: Liquidators seek to soothe nerves
SHANGHAI HAI XING SHIPPING: Named in oil suit
SING TAO HOLDINGS: Three executives jailed for fraud

TAK WING INVESTMENT: To fight winding-up petition


* I N D O N E S I A *

BAKRIE & BROTHERS: Nears securing landmark debt deal
LIPPOBANK: Politicians want $3.3b bailout revoked


* J A P A N *

HITACHI: Warns of further losses
NIPPON STEEL: Issues zero profit warning
NISSAN MOTORS: Restructuring efforts in advance of deal
TOWA REAL ESTATE: Troubled Towa seeks debt relief


* K O R E A *

CHO HUNG SECURITIES: Seven firms report losses
CITIZENS INVESTMENT: Seven firms report losses
DEUTSCHE MORGAN GRENFELL: Seven firms report losses
KFB SECURITIES: Seven firms report losses
SAMSUNG INVESTMENT: Seven firms report losses

SK SECURITIES: Seven firms report losses
SSANGYONG INVESTMENT: Seven firms report losses


* M A L A Y S I A *

BANK BUMIPUTRA: Posts RM464m first-half loss


* S I N G A P O R E *

GENERAL SECURITIES: $54m in the red
SEMBCORP: Revamp affects two debt instruments


* T H A I L A N D *

BONBACK CO: Announces closing of affiliate
THAI PETROCHEMICAL: Siam Cement rules out merger with TPI
THAI PETROCHEMICAL: Two creditors were opposed to plan
THAI TELEPHONE: Resignation points to carrier's plight
UNITED COMM: To finish debt restructure in a week


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

ALBATRONICS (FAR EAST): Debt restructuring in works
---------------------------------------------------
According to the South China Morning Post, Albatronics (Far
East) is considering a debt restructuring plan to be put to
the board for approval tomorrow, along with results for the
nine months to the end of December. The company said it was
not aware of the reasons for the recent decrease in its
share price and increase in turnover.


GUANGDONG ENTERPISES: Guangdong plans $15b asset boost
------------------------------------------------------
According to the South China Morning Post, the Guangdong
provincial government will inject about HK$15 billion of
assets into its struggling investment arm Guangdong
Enterprises (Holdings) (GDE), said Wang Qishan, executive
vice-governor.

Mr Wang said GDE's accounts receivables of HK$13 billion to
HK$14 billion might be set aside to be handled by an asset
management company.

He said high cash-generating assets -- excluding Daya Bay
nuclear plant -- would be injected into GDE.

The restructuring plan was expected to be ready by the end
of the month.

A fund manager said no details of the restructuring plan
were given but he did not expect a cash injection.


GUANGDONG INTERNATIONAL: Liquidators seek to soothe nerves
----------------------------------------------------------
According to the South China Morning Post, Guangdong
International Trust and Investment Corp (Gitic)'s
liquidation committee yesterday said it issued debt
verification notices to confirmed creditors before January
30 but this did not mean those banks which had yet to
receive notification were unqualified. The committee said
it would continue with the verification process and issue
verification notices once a creditor's status was
confirmed.

It also announced the appointment of three intermediaries
to assist in its bankruptcy proceedings. Peat Marwick-
Huazhen, KPMG's cooperative venture in the mainland, was
appointed to help in the liquidation process and provide
professional advice. Johnson Stokes & Master was appointed
as legal adviser on bankruptcy issues outside the mainland
and Junxin Law Firm as the legal adviser on domestic
liquidation issues.

The committee said the advisers would help ensure the
liquidation process would be conducted under the principle
of fairness, openness and justice and in line with
international practices.

Gitic's creditor banks are scheduled to meet on Monday to
sign a letter calling a meeting with senior officials in
Beijing to express their concerns over the handling of
Gitic affair.

The People's Bank of China completed the first draft of
rules governing the closure of financial institutions due
to takeovers, mergers and bankruptcies for the review by
the State Council, the official Economic Daily reported
yesterday.

Big creditor banks and loan agents of Fujian Enterprises
were assured by the Fujian provincial government's Hong
Kong window company that it would fully repay its debts.
Bankers said the possible appointment of the firm's
creditor bank, CCIC Finance, as its financial adviser on
restructuring had failed as the two sides could not agree
on the role of the financial adviser and the strategies for
handling the issue.

Participating banks in a US$80 million syndicated loan,
arranged by CCIC Finance, would meet today to discuss the
next course of action.

The Hong Kong Standard reported on the drafting of rules by
the People's Bank of China as mentioned above.

The paper also reported on the pledge by Fujian Enterprises
that it would repay all outstanding debts, and the
announcement by the company that it would not appoint a
financial adviser.


SHANGHAI HAI XING SHIPPING: Named in oil suit
---------------------------------------------
According to the South China Morning Post, China Shipping
Development's Hong Kong subsidiary, Shanghai Hai Xing
Shipping (Hongkong) has been sued by China Petrochemical
Corp's (Sinopec) Hong Kong offshoot for failing to pay
US$1.75 million in principal and interest due for gas-oil
purchases. The default came as the end-user of 11,000
tonnes of gas oil for trading purposes had failed to pay
Hai Xing. Hai Xing had taken the end-user, which is not
named, to court.

The gas oil was worth $2.15 million. Of that the end-user
has repaid about $607,282 in two instalments. Sinopec (Hong
Kong) is now seeking $1.75 million in the outstanding
unpaid amount plus interest from Shanghai Hai Xing Shipping
(HK).

Under the agreement signed on October 24, 1997, Shanghai
Hai Xing Shipping (HK) should settle the purchase price
within 30 days and pay interest on the outstanding purchase
price at 8.5 per cent per annum.

Hai Xing said the company would leave the legal side of the
issue to its legal adviser, Coudert Brothers.


SING TAO HOLDINGS: Three executives jailed for fraud
----------------------------------------------------
The Asian Wall Street Journal reported that Hong Kong's
Independent Commission Against Corruption (ICAC) accused
and jailed last month three executives of Sing Tao Holdings
Ltd. for fraudulently boosting the circulation of the
English language Hong Kong Standard which it publishes.
The three, who all were employed by the Hong Kong Standard,
set up a special company to perpetrate the circulation
fraud.  

A justice official reviewing this case also claimed that
there was not substantial evidence that Ms. Aw (Sally)
Sian, the controlling (and 50.04 percent) shareholder of
Sing Tao Holdings, was involved in this fraud.

Sing Tao Holdings also publishes the Chinese language Sing
Tao Daily.

Ms Aw is currently the subject of a bankruptcy suit filed
by Mr. Ho Ying-chie, an unsecured creditor, and a member of
the family that controls the Hong Kong Tobacco Company.  
Ms. Aw has already acknowledged to the court that in
February of 1997, Mr. Ho lent her on two occasions a total
of $13 million and HK$ 169 million. The suit was filed in
December 1998 after Mr. Ho claimed she failed to pay back
the loans.

Earlier newspaper reports stated that most of Ms. Aw's
shares of Sing Tao are pledged with a bank.

Earlier this week, a judge dismissed a bid by Hong Kong
Sunrise Holdings Ltd., a wholly owned unit of China
Enterprise Development Fund Ltd. to intervene in the
bankruptcy proceedings against Ms. Aw. The court refused
to let this closed-end private investment fund buy 23
percent of Sing Tao.

Last December, Sing Tao reported a net interim loss of HK$
13.8 million for the six months ending in September 1998.


TAK WING INVESTMENT: To fight winding-up petition
-------------------------------------------------
According to the Hong Kong Standard, Tak Wing Investment
(Holdings) yesterday said it would oppose the winding-up
petition filed against it by Standard Chartered Bank.

Tak Wing said in a statement it would discuss with Standard
Chartered Bank the terms on which the bank might be
prepared to withdraw the petition in advance of the hearing
set for April 7. The company said it intends to seek a
dismissal of the petition on the grounds that its debts to
the bank are not immediately due.

The company said according to the latest valuation report
in September 1998, the bank had security for such debts
over properties in Hong Kong with an aggregate value in
excess of the aggregate amount of such debts.

The Tak Wing chairman said the company was in discussion
with its major shareholder and other prospective investors
with a view to negotiating and formalising a restructuring
of the group and its subsidiaries which would involve
injection of debt and equity capital and assets into the
company and the sale of all or part of the controlling
shareholder's interest in the company and the rescheduling
of debts owed to the company's bankers.


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

BAKRIE & BROTHERS: Nears securing landmark debt deal
----------------------------------------------------
According to the South China Morning Post, Bakrie &
Brothers is close to an agreement with its creditors which
offers a road-map out of Indonesia's US$80 billion private-
sector debt burden. Sources close to the Bakrie
negotiations said 80 per cent of creditors had agreed to a
debt-equity swap.

Under the deal, creditors would write off Bakrie's billion-
dollar foreign debts in return for 80 per cent of a holding
company, which houses Bakrie's five key assets, plus 20 per
cent of the rest of the group. The value of the equity
offered is a fraction of Bakrie's debts, but have the
chance of a higher return in the years ahead if Bakrie
escapes from its debt straitjacket and gets back to its
feet.


LIPPOBANK: Politicians want $3.3b bailout revoked
-------------------------------------------------
According to the South China Morning Post, Indonesian
legislators yesterday demanded the government revoke a
regulation earmarking 3.75 trillion rupiah to bail out
troubled Lippo Bank, saying the move smacked of corruption,
given the close links between President B.J. Habibie and
the Riady family controlling the Lippo group of companies.

Last month, names were released for the first 12 banks
accepted for the planned recapitalisation scheme. Of 4.3
trillion rupiah earmarked for the banks, 3.75 trillion was
allocated to Lippo Bank. Funds were also allocated to 10
regional development banks and the small, private Bank
Sembada Artanugroho.

Under the plan, banks with a capital adequacy ratio of
between minus 25 and 4 per cent are eligible for
recapitalisation if they produce a detailed business plan
showing how they will improve their financial position and
can prove their management is sound and transparent. The
government will inject up to 80 per cent of the capital
needed to recapitalise eligible banks provided the banks'
owners come up with the rest. The injected assets will be
in the form of government bonds, and in return Indonesia
will gain non-voting equity staked in the banks.

Parliament is due to hold a hearing on the 1999-2000 budget
on February 26 after which announcement will be made of the
names of banks to be included in the bank recaptalisation
scheme and those that failed to make it and were destined
for liquidation.


=========
J A P A N  
=========

HITACHI: Warns of further losses
--------------------------------
Hitachi, Japan's leading electronics conglomerate,
yesterday warned it would post consolidated net losses of
Y375bn in fiscal 1998, sharply worse than its previous
estimate of Y250bn losses. The company also said it would
halve its dividend from Y11 to Y5.5.

The company, which last year posted a Y4.5bn profit, blamed
extraordinary loses related to resutructuring the
semiconductor business and sluffish sales in Hitachi's main
product groups.

Hitachi's total parent extraordinary loss was Y210bn, with
restructuring costs accounting for Y185bn. It also recorded
losses from write-downs of security investments of Y23bn
and amortisation of pension funds plans of Y32bn. (The
Financial Times 05-Feb-1999)


NIPPON STEEL: Issues zero profit warning
----------------------------------------
Nippon Steel, Japan's leading steel manufacturer, warned
yesterday that difficult conditions in the domestic market
and an unexpected collapse in export volumes meant it would
not make a profit this year.

Nippon Steel revised its earlier forecast of Y5bn in net
earnings to no additional after-tax profits. This compares
with Y35.3bn in net earnings last year, on sales of
Y2.295bn. Nippon Steel also cut its sales forecast to
Y1,920bn.

The group, which had about Y2,621bn in interest-bearing
liabilities in March 1998, has been shedding assets and
retiring workers to improve its balance sheets. It expects
a Y120bn extraordinary loss on sale of its semiconductor
business, and a Y35bn extraordinary loss on valuation of
marketable securities. Nippon Steel was the only one of the
big five steel manufacturers that had expected to make an
after-tax profit this year. (The Financial Times
05-Feb-1999)


NISSAN MOTORS: Restructuring efforts in advance of deal
-------------------------------------------------------
Yoshikazu Hanawa, president of Nissan Motors, yesterday
revealed another round of restructuring including asset
sales and possible factory closures in Japan but left
details of a capital tie-up with Daimler-Chrysler unclear.

Mr Hanawa's reticence to discuss a possible tie-up suggests
that negotiations about the US-German group's purchase of
Nissan Diesel, Nissan's truck and engine affiliate, and a
broader alliance have entered a critical stage.

The acceleration in cost-cutting plans also indicated that
DaimlerChrysler may force Nissan to step up its
restructuring efforts.

DaimlerChrysler is thought to have offered to buy 10 per
cent of Nissan's core operations and all of its nearly 40
per cent share in Nissan Diesel, on the condition that the
Japanese carmaker accelerates its restructuring to
eliminate part of its Y4,300bn interest-bearing debt
burden.

Mr Hanawa refused to discuss any aspect of the
negotiations, except to say that the sale of Nissan Diesel
was the "most important" and that DaimlerChrysler would
have to buy more than 10 per cent of shares in order for
the deal to be of any value.

Mr Hanawa also said he had no objection to foreign managers
taking a role in Nissan management, as happened when Ford
Motor bought a 33.4 per cent stake in Mazda. (The Financial
Times 05-Feb-1999)


TOWA REAL ESTATE: Troubled Towa seeks debt relief
-------------------------------------------------
According to the Hong Kong Standard, Towa Real Estate
Development, a condominium builder, said it asked Tokai
Bank and others to forgive 300 billion yen in loans. Towa
said it is asking Tokai Bank to forgive 180 billion yen and
general contractor Fujita Corp, Towa's largest shareholder,
to forgive 50 billion yen in loans.

The company is asking seven other banks to waive 70 billion
yen. The Nihon Keizai newspaper said last month that the
seven other creditors are Sumitomo Trust and Banking, Chuo
Trust and Banking, Mitsui Trust and Banking, Toyo Trust and
Banking, Sakura Bank, Long-Term Credit Bank of Japan and
Nippon Credit Bank. Fujita Corp said last month it would
forgive loans to Towa.


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

CHO HUNG SECURITIES: Seven firms report losses
----------------------------------------------
The Korea Herald reported statistics from the Financial
Supervisory Commission (FSC) that indicated the big losers
in earnings among 51 domestic and foreign securities firms
operating in Korea. The data covered earnings from April to
December of 1998. Cho Hung Securities' pre-tax loss was
8.171 billion won.


CITIZENS INVESTMENT: Seven firms report losses
----------------------------------------------
The Korea Herald reported statistics from the Financial
Supervisory Commission (FSC) that indicated the big losers
in earnings among 51 domestic and foreign securities firms
operating in Korea. The data covered earnings from April to
December of 1998. Citizens Investment's pre-tax loss was
22.677 billion won.


DEUTSCHE MORGAN GRENFELL: Seven firms report losses
---------------------------------------------------
The Korea Herald reported statistics from the Financial
Supervisory Commission (FSC) that indicated the big losers
in earnings among 51 domestic and foreign securities firms
operating in Korea. The data covered earnings from April to
December of 1998. Deutsche Morgan Grenfell's pre-tax loss
was 1.006 billion won.

A similar story in the Korea Times indicated that Deutsche
Morgan Grenfell's operations had been suspended.  


KFB SECURITIES: Seven firms report losses
-----------------------------------------
The Korea Herald reported statistics from the Financial
Supervisory Commission (FSC) that indicated the big losers
in earnings among 51 domestic and foreign securities firms
operating in Korea. The data covered earnings from April to
December of 1998. KFB Securities' pre-tax loss was 11.136
billion won.


SAMSUNG INVESTMENT: Seven firms report losses
---------------------------------------------
The Korea Herald reported statistics from the Financial
Supervisory Commission (FSC) that indicated the big losers
in earnings among 51 domestic and foreign securities firms
operating in Korea. The data covered earnings from April to
December of 1998. Samsung Investment's pre-tax loss was
22.943 billion won.


SK SECURITIES: Seven firms report losses
----------------------------------------
The Korea Herald reported statistics from the Financial
Supervisory Commission (FSC) that indicated the big losers
in earnings among 51 domestic and foreign securities firms
operating in Korea. The data covered earnings from April to
December of 1998. SK Securities' pre-tax loss was 174.332
billion won.

Last August, the The Korea Times reported that the FSC had
barred SK Securities and Ssangyong Investment & Securities
from purchasing new foreign currency securities and from
investing in offshore funds and derivative trades in order
to prevent these firms from additional debt exposure. They
were also identified as being undercapitalized, and ordered
to submit rehabilitation plans outlining how they plan to
meet a 150 percent capital adequacy requirement and a 100
percent asset to debt ratio.  


SSANGYONG INVESTMENT: Seven firms report losses
-----------------------------------------------
The Korea Herald reported statistics from the Financial
Supervisory Commission (FSC) that indicated the big losers
in earnings among 51 domestic and foreign securities firms
operating in Korea. The data covered earnings from April to
December of 1998. Ssangyong Investment & Securities
Company's pre-tax loss was 98.664 billion won.

Last August, the The Korea Times reported that the FSC had
barred SK Securities and Ssangyong Investment & Securities
from purchasing new foreign currency securities and from
investing in offshore funds and derivative trades in order
to prevent these firms from additional debt exposure. They
were also identified as being undercapitalized, and ordered
to submit rehabilitation plans outlining how they plan to
meet a 150 percent capital adequacy requirement and a 100
percent asset to debt ratio.  


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

BANK BUMIPUTRA: Posts RM464m first-half loss
--------------------------------------------
Bank Bumiputra Malaysia Bhd, the country's second largest       
bank, swung to a loss in the first six months ended Sept
30, as it set aside money for ballooning bad loans. The
state-owned bank posted a loss of 464.2 million Malaysian
ringgit (S$206.4 million), or 37 sen a share, compared with
a profit of RM192.8 million, or 17 sen, in the same period
a year ago. The group set aside RM789.3 million for bad
loans, more than double the amount a year ago.

For the year ended March 31, 1998, the banking group swung
to a net loss of RM1.413 billion from a profit of RM455.6
million in the year-earlier period. It was one of the
biggest losses in the country's banking history.

In a bid to strengthen the group, Bank Bumiputra, on Sept
17, agreed to merge with Commerce Asset-Holding Bhd, which
owns the country's sixth-largest bank. The move will create
a bank with combined assets of RM80 billion.

Meantime, net non-performing loans -- or loans that pay
neither principal nor interest -- soared in the six months
to RM4.3 billion, or 13 per cent of total loans from 3.69
per cent the same period a year ago. The bank didn't say if
the loans had been non performing over three or six months.

Even so, as at December, the banking industry's average bad
loans based on a three-month classification is 14.9 per
cent. For six months, the average figure is 9 per cent.
(Bloomberg and Singapore Business Times 05-Feb-1999)


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

GENERAL SECURITIES: $54m in the red
-----------------------------------
General Securities Investments (GSI) has plunged into the        
red with a hefty $53.9 million group net loss for the full        
year ended Dec 31, 1998. Loss per share came to 81.68
cents, compared to earnings per share of 2.79 cents
previously when the company made a $1.8 million net profit.

But GSI pointed out that the loss should be seen in the
context of the fall in its net tangible asset per share,
which fell by only 13.9 per cent to $1.24 from $1.44.

Pre-tax loss last year came to $53.7 million, against a
$1.9 million profit in 1997. No dividend was recommended.
(Singapore Business Times 05-Feb-1999)


SEMBCORP: Revamp affects two debt instruments
---------------------------------------------
The SembCorp Industries group has offered to pay half a
percentage point more in interest to entice investors of
two of its debt instruments to hold on to their securities.

This follows a breach in financial covenants governing the
instruments -- a S$100 million bond issue and a US$300
million (S$507 million) debt issuance programme -- as a
result of the group's decision to exit the property
development and hospitality businesses.

The bonds, carrying a coupon of 3.25 per cent and due in
2002, were issued by Sembawang Resources, while the debt
programme, comprising five series of notes due between June
2002 and November 2003, belonged to Sembawang Corporation.

SembCorp was formed by the merger of Sembawang Corp and ST
Industrial Corp in the middle of last year.

The company said earlier this week that it was writing down
the value of Sembawang Resources' property development and
hospitality business assets by S$177.2 million -- S$138.2
million for property development and S$39 million for
hospitality.

The writedowns by Sembawang Resources will result in the
proforma consolidated net worth of the company being
reduced to $90.87 million as at the end of 1997.

As a result of the writedowns, Sembawang Resources and
Sembawang Corp will be in breach of certain covenants
governing the two debt issues. For Sembawang Corp, the
breach is because Sembawang Resources is considered a
"material" subsidiary of the company.

In exchange for waivers from these breaches, the two
companies are asking investors to either accept half a
percentage point more in interest payments a year or, have
the bonds or notes redeemed in full of their principal
amounts plus all accrued interest at the existing rates.

The companies are also proposing to make certain amendments
to the terms of the bonds and notes.

The offers are without prejudice to the right of either
bond or note holder from pursuing other options. They have
to decide within seven business days after extraordinary
resolutions are passed at March 1 meetings of the bonds and
notes holders. (Singapore Business Times 05-Feb-1999)


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

BONBACK CO: Announces closing of affiliate
------------------------------------------
Thai Luxe Enterprises Public Co., Ltd. has been affiliated
to Bonback Co., Ltd. by buying the capital-increase shares
amount 29,400 shares equivalent to Baht 2,940,000 or 49% of
shareholding. Thai Luxe has cut all the accumulated share
of loss from investment and the affiliate has no longer
continued in business. The company stated that cutting the
loss amount Baht 2,940,000 has no impact on business.
(Stock Exchange of Thailand 05-Feb-1999)


THAI PETROCHEMICAL: Siam Cement rules out merger with TPI
---------------------------------------------------------
According to the Hong Kong Standard, Thailand's largest
conglomerate, Siam Cement, yesterday said a merger with
troubled Thai Petrochemical (TPI) was unlikely. TPI
spokesman also rejected the possibility that TPI would
merge with one of its oldest rivals in the petrochemical
business.

TPI is struggling to appease creditors, particularly the
International Finance Corp and the Commonwealth Bank of
Australia, over plans to restructure more than US$3 billion
in debt.


THAI PETROCHEMICAL: Two creditors were opposed to plan
------------------------------------------------------
The Asian Wall Street Journal reported that the Thai
Petrochemical Industry PCL (TPI) restructuring plan did not
get approved on schedule last December because 2 major
foreign creditors opposed the plan. Thai law requires that
creditors accounting for 75 percent of the debt involved
approve any restructuring plan. Without the support of
these two foreign banks, the proposal only got 72 percent
approval.  
  
The two banks involved are the International Finance
Corporation and the Commonwealth Bank of Australia, and
their debt represents 16 percent of TPI's total $3.2
billion debt. The report mentioned that the banks also
had their representatives resign from the 14 member
Creditor Steering Committee that represented 130 foreign
and 12 Thai creditors. TPI issued a statement that these
banks were taking an extreme position and calling for
financial default and foreclosure.

Details of a draft plan released earlier include a
provision to first extending the maturities of all short-
term loans totaling $1.09 billion to five years, and
converting up to $400 million worth of loan interest
repayment into equity. Some long-term loans will also have
their terms reduced so all loans will mature in five years.  
TPI will also commit to raising $700 in new capital.

The report stated that TPI will commence modified interests
payments to those creditors who voted for the plan.  

In October of 1997, TPI, and its unit TPI Polene PCL, began
an indefinite suspension of the repayment of the foreign
currency loans. Following the Thai effective devaluation of
the baht on July 2, 1997, TPI's foreign debts expanded,
while revenues and sales fell as the Thai economy
contracted.


THAI TELEPHONE: Resignation points to carrier's plight
------------------------------------------------------
Pairote Lamsam's resignation as chairman of Thai Telephone
and Telecommunication Plc (TT&T) signifies clearly the
extent of the company's financial troubles, a TT&T board
source told The Nation Thursday. It was the second top-
level resignation after Dr. Adisai Bodharamik quit as
the company's chief executive a few months ago. At the
time, Adisai denied he left troubles behind, saying he
preferred to spend more time as a senator.

The fixed-line company has been struggling for more than
three years to amend its royalty payment contract with the
Telephone Organization of Thailand (TOT). It is the first
firm that it has campaigned for either a lower royalty
payment or an exemption from it.

The financial crisis, starting in 1997, has compounded its
cash management trouble. Its creditors are reluctant to
negotiate for a debt roll-over unless the government steps
in to bring down the level of royalty payment. Without the
royalty, analysts said TT&T could be operating well with
just revenue from calls.

Pairote represented Loxley Plc which has a 13 percent share
in TT&T, about the same size as NTT's holding in the
company. Adisai's Jasmine Plc remains the largest
shareholder with about 20 percent. TT&T was founded by
Jasmine and Loxley in 1992 as one of the telecom firms with
promising prospects.

The company is saddled with 3.8 billion baht ($104.11
million) in debts comprising 2.4 billion baht owed to banks
and financial institutes and the rest to equipment
suppliers Alcatel and Ericsson.

Chase Manhattan started working on the company's debt roll-
over plan late last year. However, TT&T has already
announced a suspension in debt payments. Major creditors,
such as Sumitomo Bank and Credit Lyonnais, recently
approached the Transport and Communications Ministry for an
amendment to TT&T's royalty contract TT&T, but the request
was turned down.

"The loan roll-over talks will not happen as the government
has yet to come up with a clear policy in support of the
troubled telecom concessionaires," said a telecom analyst.

The deadlock has prompted speculation that creditors of
TT&T are preparing to take over the company. However,
Vasant Chatikavanij, a senior executive of Loxley, denied
such a move.

"The creditors have never forced the management or its
major shareholders to do anything," Vasant said.

He added that Loxley, as a major shareholder in TT&T, is
ready to reduce its stake should the creditors prefer to
step in and solve the company's financial troubles.
(The Nation 04-Feb-1999)


UNITED COMM: To finish debt restructure in a week
-------------------------------------------------
United Communication Industry (UCOM) expects to finish
restructuring US$570 million of debt within a week,
allowing its biggest foreign shareholder to double its
stake to match that of the family that founded Thailand's
second mobile phone licensee. The agreement, to extend
repayments by as much as five years, will help the company
cope with a currency devaluation and slowing demand. The
pact is expected to be signed February 12, UCOM Chief
Executive Boonchai Bencharongkul said in an interview.

It would also make UCOM and its mobile phone unit, Total
Access Communication, more competitive with rival
Shinawatra Computer & Communications (SHIN). Shinawatra's
mobile phone unit sold a fifth of itself last month to
Singapore Telecommunication for $317 million, thanks in
part to its cleaner balance sheet.

"Hopefully, our debt agreement will get us out of the
intensive care unit," said Boonchai, whose family owns
about 43 percent of the company.

The pact will also be vote of confidence from some of the
world's largest banks. UCOM's advisor include UBS AG's
Warberg Dillon Read and Lehman Brothers Holding.

The proposal calls for the maturities of two bonds and $210
million of bank loans to extended to the end of 2003,
Boonchai said. Most creditors will receive higher interest
rates in return.

About $120 million of convertible Eurobonds and domestic
debentures will be converted into new equity comprising
about 47 percent of the enlarged company. Shares are priced
at 22 baht.

Somers of the UK, a closely held investment group, would
see its 13 percent stake at least double as its exchanges a
portion of its convertible bonds for new shares. Somers
became UCOM shareholder in August by buying Motorola's 13
percent stake for $11 million. It then began buying the 10-
year convertible bonds in the open market.

To prepare for an eventual exodus by Somers and beef up
technical expertise to match what Singtel brought to
Shinawatra, Boonchai is also looking for a foreign
telecommunications company as a partner.

Though the agreement, which involves about 50 creditors,
doesn't require any management change, Boonchai, 45, said
he would give up his post as president later this year to
his younger brother Vichai. (Bloomberg and Business Day
[Thailand] 05-Feb-1999)


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