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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      

      Friday, April 23, 1999, Vol. 2, No. 78

                    Headlines


* C H I N A   &   H O N G   K O N G *

GUANGDONG INTERNATIONAL LEASING: Debt shocks at Gitic units
PEREGRINE INVESTMENTS: Decision near on Peregrine investigator
SING TAO: Sequoia in battle for control of Sing Tao
WHARF HOLDINGS: Wharf denies deal breaches agreement


* J A P A N *

DAIEI INC: Japan supermarkets flounder on glum earnings
ITO-YOKADO CO: Japan supermarkets flounder on glum earnings
MYCAL CORP: Japan supermarkets flounder on glum earnings
SEIYU LTD: Japan supermarkets flounder on glum earnings
TOKYO CITY FINANCE: IBJ forgives loans to Tokyo City Finance
                       


* K O R E A *

HYUNDAI GROUP: To unveil drastic restructuring plan today
INDUSTRIAL LEASING: Officially applies for workout program
          
KOREA DEVELOPMENT LEASING: Debt restructuring approved by Hanvit
KOREA FIRST BANK: Newbridge to hold press briefing Tuesday


* M A L A Y S I A *

TONGKAH HOLDINGS: Tongkah unveils debt revamp scheme


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

PHILIPPINE AIRLINES: PAL creditors oppose rehab plan; execs quit


* T H A I L A N D *

LANNA LIGNITE: Seeks 300m baht to settle foreign debt
RADANASIN BANK: Shows net loss of Bt544m
THAI FARMERS BANK: Defaults grow for Thai Farmers


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

GUANGDONG INTERNATIONAL LEASING: Debt shocks at Gitic units
-----------------------------------------------------------
A pattern of glaring corporate mismanagement started to emerge as
two more bankrupt subsidiaries of Guangdong International Trust &
Investment Corp (Gitic) reported to creditors yesterday. At
separate meetings, held at Guangzhou Intermediate People's Court,
creditors of Guangdong International Leasing and Guangxin
Development Enterprise were told company debt was likely to be
substantially higher than originally estimated, with recoverable
assets standing at less than 20 per cent of the total.

The reports came on the eve of the first creditors' meeting for
corporate parent Gitic, which is scheduled to convene today at
Guangdong Higher People's Court in Guangzhou. Gitic was closed
last October by the People's Bank of China for its inability to
repay foreign debts. The closure, and subsequent bankruptcy --
the first of a mainland financial institution since 1949 --
shocked foreign creditors.

Yesterday, the clearance team for Guangdong Leasing said total
debts claimed on the company reached 2.21 billion yuan (about
HK$2.05 billion), an increase of about 49 per cent over the 1.48
billion yuan originally estimated by the firm. Assets reached 1.6
billion yuan, but the clearance team estimated only 229 million
yuan was recoverable.

The story at Guangxin Development was much the same. Total debts
claimed amounted to 1.22 billion yuan, a 59 per cent rise over
the 769.27 million estimated by the company, while recoverable
assets stood at 125.37 million from an estimated total of 722.46
million yuan.

If the preliminary figures remain unchallenged, creditors of
Guangdong Leasing and Guangxin Development would collect only
about 10 cents on the dollar.

Yesterday's reports mirror findings released on Tuesday for
Gitic's Shenzhen subsidiary, where company debt was put about 30
per cent more than the company originally estimated, with asset
recovery standing at about 16 per cent of the total.

Gitic, along with its three subsidiaries, was declared bankrupt
in January, with preliminary debts estimated at 36.14 billion
yuan and assets of 21.47 billion yuan.

Among the most startling information revealed at the Guangzhou
meetings was the large amount of unrecoverable lending. Guangxin
Development was likely to recover only 58.20 million yuan from
224.31 million yuan in outstanding loans.

At Guangdong Leasing, the clearance team reported a low recovery
rate for both lending and long-term investment. The report said
only 28.59 million yuan from 321.08 million yuan worth of loans
-- and only 34.5 million yuan of 266.77 million yuan in long-term
investment -- was recoverable.

Significantly for Gitic creditors, Guangdong Leasing also
reported internal liabilities of 1.44 billion yuan, indicating
the corporate parent may have made higher than originally
estimated lending to its subsidiary companies.

Foreign creditors of Gitic cautioned that corporate subsidiaries
were likely to be less well-managed than their parent.

Guangdong Leasing's creditors yesterday elected a five-member
steering committee that includes French bank Societe Generale.
Guangxin Development's creditors also elected a steering
committee comprised of three local banks -- the Guangzhou
branches of the Bank of China, the Industrial & Commercial Bank
of China and the Guangdong Development Bank. (South China Morning
Post 22-Apr-1999)


PEREGRINE INVESTMENTS: Decision near on Peregrine investigator
--------------------------------------------------------------
The Court of First Instance will today hear the Government's
application to appoint an independent inspector to investigate
the collapse of Peregrine Investments Holdings. Sources said the
former chief operating officer of Britain's Financial Services
Authority, Richard Farrant, was likely to be hired as the
inspector if the court approves the move. Under an agreement with
the authority, Mr Farrant would not be able to start work until
May 1. Mr Farrant is expected to have a report ready for the
Government within one year of his appointment, the source said.

The source said the relatively short time needed for the probe
was due to the fact it will be an investigation with "limited
scope". Sources said the investigation would focus on disclosure,
directors' responsibilities and the group's control system.
(South China Morning Post 22-Apr-1999)


SING TAO: Sequoia in battle for control of Sing Tao
---------------------------------------------------
The battle for the control of publisher Sing Tao Holdings has
heated up ahead of next week's shareholders meeting, with a
minority shareholder and the bidder making public appeals for
support. A mysterious minority shareholder -- Sequoia Trust --
yesterday said the proposed special treatment for chairman Sally
Aw Sian was "unfair" to minority shareholders and vowed to vote
against it. However, Lazard Asia Fund, which was offering to buy
50.02 per cent of Sing Tao, urged minority shareholders to
support its offer at next Thursday's special general meeting.

The clash centred on the special arrangements offered by the
bidder to Ms Aw. Arrangements included an annual consultancy fee
of $9 million for six years, financial aid and a profit-sharing
scheme. Shareholders' approval on the arrangements was a
prerequisite of Lazard's general offer for the rest of Sing Tao's
shares.

The identity of Sequoia remained a mystery, although there was
speculation that hostile bidder -- Investment Co of China (ICC)
-- was behind it. This was denied. ICC, believed to be holding
more than 5 per cent of Sing Tao, lodged a complaint to
regulators over the special arrangements. Richards Butler partner
David Norman, ICC's lawyer, said: "I'm aware of no connection
whatsoever between Sequoia Trust and ICC.

Sequoia Trust said Ms Aw was selling almost all of her 50.04 per
cent interest to Lazard to repay debt. She owed Hong Kong Tobacco
chief Ho Ying-chie $274 million and banks $110 million. It said:
"Ms Aw's personal debt has nothing to do with Sing Tao, yet she
will receive financial benefits from Sing Tao and buyers of her
shares that will not accrue to minority shareholders."

The trust alleged Lazard would receive half of the consultancy
fee from Ms Aw in return for paying Hong Kong Tobacco managing
director Charles Ho Tsu-kwok, who was Mr Ho's grandson, an
upfront payment of $20 million as partial settlement of the debt.

However, Mr Cheung said the allegation was "incorrect" as Lazard
would pay Ms Aw a large portion of the consultancy fee if it
became a majority shareholder. (South China Morning Post
22-Apr-1999)


WHARF HOLDINGS: Wharf denies deal breaches agreement
----------------------------------------------------
Wharf Holdings has denied the US$575 million securitisation of
income from its Harbour City complex breached agreements with
creditors. The property and infrastructure conglomerate described
as "inaccurate" reports that a number of creditors were
considering taking action against the company over the February
deal. In a faxed statement yesterday, Wharf executive director
John Hung rejected claims Wharf had breached the covenants of a
$5.2 billion revolving loan facility. The facility was completed
in 1996 for subsidiary Pitney Investments and guaranteed by
Wharf.

"Wharf has been notified [by the syndication banks] that the
matter is now closed," Mr Hung said.

A number of banks that participated in the loan syndicate had
reportedly been upset that the securitisation of Harbour City,
the shopping mall and office complex in Tsim Sha Tsui, undermined
Wharf's balance sheet and its ability to act as guarantor for the
Pitney loan. One bank reportedly considered the securitisation
constituted a breach of the terms of the Pitney loan.

Law firm Allen & Overy was appointed by the loan syndicate to
advise on the matter. It is believed the legal advisers presented
their reply on Monday.

"Wharf advises that prior to the establishment of the new
facility, as a standard procedure, legal opinion confirmed that
there would be no breach of any corporate obligations," Mr Hung
said.

"The agents of the banking syndication have reconfirmed with the
syndication's own lawyers -- the very same legal firm that
advised on the original Pitney loan -- that there has been no
breach." (South China Morning Post 22-Apr-1999)


=========
J A P A N  
=========

DAIEI INC: Japan supermarkets flounder on glum earnings
-------------------------------------------------------
Japan's prolonged economic slump, punctuated by slow consumer
spending and record unemployment, took a heavy toll on the  
supermarket industry's earnings for the year to February. Store
sales fell across the board at Japan's six major supermarket  
operators, calling into question the sector's collective
viability.

Daiei, a struggling retail giant, sank deep into the red with a
consolidated net loss of some 41.2 billion yen, and was forced to
forgo its annual dividend payment for the first time since its
stock exchange listing in 1971. Daiei looks stuck with no light
seen at the end of the tunnel, observers said. The beleaguered
firm's chances of revival hinge on whether it can deliver on its
group debt reduction plan and other restructuring measures, they
said. (Jiji Press English News 21-Apr-1999)


ITO-YOKADO CO: Japan supermarkets flounder on glum earnings
-----------------------------------------------------------
Japan's prolonged economic slump, punctuated by slow consumer
spending and record unemployment, took a heavy toll on the  
supermarket industry's earnings for the year to February. Store
sales fell across the board at Japan's six major supermarket  
operators, calling into question the sector's collective
viability.

Ito-Yokado Co., often referred to as the one bright spot in the
embattled industry due to the success of its "consumption tax-
free" sales campaigns, suffered a third straight decline in
parent operating profit. (Jiji Press English News 21-Apr-1999)


MYCAL CORP: Japan supermarkets flounder on glum earnings
--------------------------------------------------------
Japan's prolonged economic slump, punctuated by slow consumer
spending and record unemployment, took a heavy toll on the  
supermarket industry's earnings for the year to February. Store
sales fell across the board at Japan's six major supermarket  
operators, calling into question the sector's collective
viability.

Mycal saw its earnings momentum sapped by massive appraisal
losses on equity holdings, incurring a net group loss of about
35.5 billion yen. (Jiji Press English News 21-Apr-1999)


SEIYU LTD: Japan supermarkets flounder on glum earnings
-------------------------------------------------------
Japan's prolonged economic slump, punctuated by slow consumer
spending and record unemployment, took a heavy toll on the  
supermarket industry's earnings for the year to February. Store
sales fell across the board at Japan's six major supermarket  
operators, calling into question the sector's collective
viability.

Seiyu Ltd. logged an after-tax loss of some 13.9 billion yen on a
parent-alone basis, dragged down by an expensive program to bail
out Tokyo City Finance Co., an ailing non-bank affiliate, as well
as losses incurred to liquidate unprofitable affiliates. With
creditor banks agreeing to waive a total of 209.1 billion yen in
loans to TCF, however, Seiyu is confident it can turn the corner
in the near term on its relative strength in core retail
operations. (Jiji Press English News 21-Apr-1999)


TOKYO CITY FINANCE: IBJ forgives loans to Tokyo City Finance
                       
------------------------------------------------------------
Industrial Bank of Japan said Wednesday it will forgive 27,762
million yen in loans to Tokyo City Finance Co., an ailing  non-
bank affiliate of Seiyu Ltd. The step is conditional on an
agreement from other creditors that the supermarket operator and
the affiliate requested to waive their loans, IBJ said. The long-
term credit bank said the loan forgiveness was factored into its  
previously announced earnings projection. (Jiji Press English
News 21-Apr-1999)


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

HYUNDAI GROUP: To unveil drastic restructuring plan today
---------------------------------------------------------
The Hyundai Group will unveil a sweeping restructuring plan
today, including proposed sell offs of about 20 affiliates, a
group spokesman said yesterday. Hyundai plans to slash the number
of affiliates from the current 49 to around 20 and pull down its
average debt-to-equity ratio to below 200 percent by the end of
1999, a group spokesman said. As a means of improving the group's
overall financial structure, Hyundai plans to sell several
profitable subsidiaries this time, he said. The conglomerate will
continue to focus on five core sectors -- autos, construction,
electronics, heavy industries and chemical, finance and services.
"Hyundai will extend extensive support to two to four affiliates
in each of these key sectors to make them world-class companies,"
he said.

He also said that negotiations are currently under way with
potential foreign buyers on the sale of the 20 or so affiliates,
and substantive results will be forthcoming during the latter
half of the year. At the same time, Hyundai will double the
volume of its rights offerings from the originally planned 5
trillion won ($4.1 billion) to 12 trillion won this year to
reduce its debt ratio, he said. Hyundai's restructuring plan will
be more far-reaching than the recent measures submitted to its
main creditor bank, he added. (Korea Herald 23-Apr-1999)


INDUSTRIAL LEASING: Officially applies for workout program
          
----------------------------------------------------------
Industrial Bank of Korea made an official announcement on  April
13 that it has decided to apply for workout program for its
affiliate Industrial Leasing Corp. Industrial Leasing Corp. will
become the second leasing company to be under workout program, if
the application is accepted. Taking into account the leasing
company's efforts to rehabilitate itself, Financial Supervisory
Commission is likely to accept the application. But FSC said that
it will approve no  more workout requests by leasing companies,  
because there is no evidence that other insolvent leasing
companies have done their best to overcome managerial
difficulties. Therefore, other insolvent leasing companies will
be taken care of by bridge banks or be liquidated.

As the guideline set up by the Corporate Restructuring Committee
does not allow the major shareholder of a leasing company under a
workout program to be a  major creditor, Industrial Bank of Korea
asked Hanvit Bank to be the major creditor bank on April 14. The
workout launching for the leasing company can be made after
Hanvit Bank accepts Industrial Bank's offer.

Industrial Leasing Corp.'s debt reaches 1,999.7 billion won.

On the other hand, FSC blamed the major shareholder of Housing
and Commercial Bank's leasing affiliate for taking no steps to
normalize its management. (Korea Economic Weekly 19-Apr-1999)


KOREA DEVELOPMENT LEASING: Debt restructuring approved by Hanvit
----------------------------------------------------------------
On March 31, Hanvit Bank announced that it designated Korea
Development Leasing Corp. (KDLC) as a beneficiary of the so-
called workout program, which is intended to normalize viable  
companies suffering financial difficulties. This marks the first
time that a domestic financial institution is included in the
workout program. With the designation, KDLC's debt redemption
period falling on March 31 rolled over by three months. If all
creditor financial institutions agree, KDLC would have the next
three months to restructure itself.

However, it is not certain that creditors will reach a consensus
on the workout program for KDLC's obligation of 4.3 trillion won,
as some fear losses they might have to bear. Particularly,
merchant banks object to the program, as they might lose $440  
million among their loans of $1.39 billion extended to KDLC. Some
foreign financial creditors also are expected to resist the plan.

Hanvit Bank has suggested two options to foreign financial
institutions; write off 30 percent of their loans and receive the
remainder instantly, or receive the remainder in the coming five
years on an installment basis. (Korea Economic Weekly
20-Apr-1999)


KOREA FIRST BANK: Newbridge to hold press briefing Tuesday
----------------------------------------------------------
Newbridge Capital, new owner of the Korea First Bank (KFB), will
hold a briefing session on Tuesday with the local press to
explain the background of its investment in Korea's financial
sector and its future strategies following the completion of
takeover. According to an official at the KFB, a senior member of
delegation from Newbridge will explain to local journalists about
the company history and policies to make the general public
better informed about the U.S. consortium. The new owner of the
KFB will also provide views to local media outlets about the key
issues such as employment and branch numbers of the KFB after the
transfer of ownership.

Newbridge officials and the government counterparts have recently
been working toward finalizing the terms and conditions on the
memorandum of understanding signed between the two sides last
December. (Korea Times 22-Apr-1999)



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

TONGKAH HOLDINGS: Tongkah unveils debt revamp scheme
----------------------------------------------------
Tongkah Holdings Bhd has proposed to restructure its debt and
those of two units amounting to RM529.68mil. It has also proposed
a renounceable offer for sale of the rights to the allotment of
up to about 191.099 million warrants after the proposed debt
restructuring by certain lenders of the group to its entitled
shareholders on the basis of six warrants for every five shares
held at a price to be determined later. In addition, Tongkah
plans to double its authorised capital to one billion shares.

Its adviser Amanah Merchant Bank Bhd (AMBB) said in a statement
yesterday the restructuring of debt, including Tongkah's 5%
redeemable unsecured bonds 1994/1999 and outstanding interest
accruing on March 31 on the loans and on May 26 on the bonds, of
the group involved:

* About RM161.996mil nominal value of irredeemable convertible
unsecured loan stocks (Iculs); and

* About RM462.638mil nominal value of redeemable convertible
secured bonds with about 196.197 million detachable warrants
(new
bonds with warrants issue).

The Iculs will settle in full the group's unsecured loans of
about RM137.285mil, including bonds and relevant outstanding
interest accruing on loans and bonds. The new bonds with warrants
will settle in full the group's unsecured loans of RM392.395mil
including relevant outstanding interest. The warrants will be
issued on the basis of one for every RM2 of secured loans.

AMBB said that the Tongkah group's total borrowings amounted to
about RM703mil as of Oct 31, 1998, and interest expense of about
RM83.76mil for the financial year to June 30, 1998.

"The group is not able to continuously service such borrowings
and high interest expense in the long run," the merchant bank
said, adding that the proposed debt restructuring would enable
the group's viable businesses to continue while reducing the
possibilities of liquidation and forced selling of assets by the
group's lenders.

The proposed debt restructuring would also ease the group's
interest servicing burden as the Iculs and new bonds would bear
an annual cash coupon rate of 1% to 2% over their tenure compared
to the group's current annual interest rates of 10% to 14%.

AMBB added that Tongkah was facing tight liquidity and would not
able to redeem the bonds on their maturity on May 26. As such,
the debt restructuring would provide bondholders an opportunity
to convert their bonds into about RM59.422mil minimal value of
Iculs. (Bernama and The Star Online 22-Apr-1999)

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

PHILIPPINE AIRLINES: PAL creditors oppose rehab plan; execs quit
----------------------------------------------------------------
Philippine Airlines Inc. (PAL) appears headed deeper into
turbulent skies as top officials of the nation's flag carrier
have handed in their resignations while the airline's biggest
foreign creditors have threatened to pull out the aircraft they
have financed. BusinessWorld sources at the airline said PAL
president and chief executive officer (CEO) Luis Juan Virata and
executive vice president and chief operating officer (COO) Jaime
Bautista formally resigned from their posts the other night to
"make way" for airline chairman Lucio Tan and former senior vice
president for sales and services Avelino Zapanta.

However, a well-placed BusinessWorld source revealed Mr. Tan's
impending return to the flag carrier management has elicited
"violent reactions" from the airline's aircraft secured
creditors. The source said the US Export-Import Bank (Eximbank)
and the European export credit agencies (ECAs) have sent a joint
letter to the Securities and Exchange Commission (SEC) on April
20 voicing their objections to the management changes, with the
threat of taking back the 19 aircraft tied to their loans. The
source said the joint letter stated that both the Eximbank and
the ECAs found the current situation at PAL "not acceptable."

The source added that in the meantime, both the Eximbank and ECAs
have said they are reserving their right to under take the
necessary actions "to terminate the leases and repossess the
aircraft concerned and seek the necessary remedies to the
situation."

The source also said that apart from the SEC and interim
rehabilitation receiver chairman Renato Francisco, copies of the
joint letter were also sent to Executive Secretary Ronaldo
Zamora, Finance secretary Edgardo Espiritu and the other credit
guarantee agencies covered by the PAL's aircraft secured loans.

Another creditor, Japan's Dai-Ichi Kangyo Bank Ltd. (Hong Kong
Branch) has also expressed opposition to the latest PAL
rehabilitation. In a letter addressed to PAL's Interim
Rehabilitation Receiver (IRR) dated March 25 this year, Dai-Ichi
Kangyo assistant general manager Yoshiaki Moriya said the
creditor bank rejects the said rehabilitation plan "as the
interests of unsecured creditors have not improved from the
previous one."

In a phone interview with BusinessWorld, PAL chief corporate
adviser Peter Foster refused to comment on the reported
objections by the ECAs and Eximbank saying they have only "heard"
there were letters to the SEC but not seen the documents for
themselves. Mr. Foster also maintained that as of presstime, the
contract of the Regent Star Services Ltd. advisory team was
"still in force."

Dai-Ichi Kangyo likewise argued that the plan included PAL's
financial projections only up to 2009 which is not enough for the
creditors to determine the repayment ability of the cash-strapped
flag carrier.

"When compared with secured or partly secured creditors,
unsecured creditors, including Dai-Ichi, are treated unfairly
under the plan and there is no clear reason to be treated
differently," Mr. Moriya said in his letter.

PAL's amended and restated rehabilitation plan proposed different
repayment schemes for secured and unsecured creditors. Under the
plan, fully secured creditors with claims amounting to roughly
$1.725 billion will be required to extend by three years to a
maximum maturity of 15 years the maturity of the credit
facilities they lent to the flag carrier. Unsecured creditors, on
the other hand, will be asked to write off interest charges which
have accumulated after the airline filed its debt relief
petition. Such creditors have claims totalling $329.8 million.  
The plan also stated that the $195 million in claims of trade
creditors will be paid in 60 equal monthly installments with 6%
annual interest.

In her letter, the bank official requested the receiver to
disclose the exact date when the payments for unsecured creditors
will commence as well as the ways by which the IRR will go about
doing this.

Meanwhile, two other creditors have also rejected the plan
through a representative, The Citibank Private Bank based in Hong
Kong. Citibank vice president Louisa Chan wrote to PAL saying
that two of its creditor clients, which were not identified,
expressed their disapproval on the scheme.

One of the creditors, holder of $7.4 million FRN due on Jan. 19
next year, has submitted its own proposal for the debt
restructuring. This includes: 5% of principal payment to be made
one year after implementation of the rehabilitation plan, 31% of
principal payment in eight years' time after implementation, 32%
of principal payment after nine years and another 32% principal
payment after 10 years. "At the same time, we would request no
waiver of any post-petition interest, all deferred and new
interest to be paid at six-month Libor flat," Ms. Chan added.
The other creditor, who holds $2 million FRN, on the other hand,
simply rejected the plan without submitting an alternative
proposal.

Credit Agricole Indosuez which leads PAL's European creditors in
their opposition, has already threatened to withdraw from
negotiations if the flag carrier does not resume payment on its
loans. The US EximBank also opposed the plan due to the risks
that it will be facing with the proposed scheme. (BusinessWorld
22-Apr-1999)


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



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


LANNA LIGNITE: Seeks 300m baht to settle foreign debt
-----------------------------------------------------
Lanna Lignite (Lanna) plans to raise 300 million baht loan to
repay its $8 million debt which will come due in August,
according to the company Managing Director Pilas Puntakosol.  
Pilas said that the company is talking with several banks and
will select the most suitable bank in securing the loan,
expecting to conclude the deal next month.

"We decided to turn to local bank in securing loan because of low
interest rate and risk, compare to that of foreign bank," Pilas
said, adding that the company will use the borrowed fund to repay
matured debt. Previously, the company showed a $14 million debt,
of which $6 million has already been paid. The remaining $8
million is the its only unpaid offshore debt.

At the same time, the company targeted to generate 1 billion baht
in revenue this year, the same level set last year; even though,
its major customers, including Siam Cement (SCC) and Siam City
Cement (SCCC) have been severely affected by the economic
slowdown, losing half of their sales revenue.

Pilas said the company will have to shift its business
concentration after the next five years as the country's coal
reserve is projected to be entirely consumed at the time.
Currently, the coal reserve amounts to 35 million tonnes.
(Business Day [Thailand] 22-Apr-1999)


RADANASIN BANK: Shows net loss of Bt544m
----------------------------------------
Following its integration with Laem Thong Bank, Radanasin Bank
has immediately found itself turning from a good bank into a bad
bank with an unaudited net loss of Bt544 million in the first
quarter of this year.

Before the integration, the bank was a good bank -- set up to
take over good assets from intervened banks -- with a start-up
capital of Bt4 billion and without any bad loans. Yet, it is
witnessing 70-80 per cent of outstanding loans of around Bt30
billion which are now non-performing.

The analyst from CNS said that the poor performance is not
surprising and the bank might even see all of the performing
loans turn non-performing since the bank has not improved its
operations since the integration.

Currently, 30 per cent of the bank's portfolio is property loans.
Debt restructuring could be the only way to restructure the loans
with the economy not fully recovered yet. It is certain that
foreigners have not paid much attention to the bank's bad assets,
as according to the Bank of Thailand more than 30 foreign
investors have submitted bids. Currently, they are undergoing the
due diligence process. (The Nation 22-Apr-1999)


THAI FARMERS BANK: Defaults grow for Thai Farmers
-------------------------------------------------
Thai Farmers Bank, the country's third-largest commercial bank,
said it lost 7.24 billion baht (about HK$1.49 billion) in the
first quarter, from a profit of 134 million baht in the same
period a year earlier, as it set aside funds for mounting
defaults. The quarterly loss was the fourth in a row for Thai
Farmers, which said about 43 per cent of its loans were at least
three months in arrears at the end of December. The loss is less
than many analysts expected.

A January-March loss of 13.6 billion baht was forecast by BNP
Prime Peregrine. That was based on an expected loan-loss
provision of 15 billion baht. Instead, the bank set aside 7.6
billion for defaults. (Bloomberg and South China Morning Post
22-Apr-1999)


S U B S C R I P T I O N   I N F O R M A T I O N

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