/raid1/www/Hosts/bankrupt/TCRAP_Public/990427.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      

      Tuesday, April 27, 1999, Vol. 2, No. 80

                    Headlines


* C H I N A   &   H O N G   K O N G *

GUANGDONG ENTERPRISES: Provisions weighed over GDE exposure
                       
GUANGZHOU INTERNATIONAL: Shipyard sues Itics for $483m loans due


* I N D O N E S I A *

BAKRIE & BROTHERS: Bakrie on brink of debt rescheduling
BANK INDOVEST: Indonesian government closes two more banks
BANK LTCB: Indonesian government closes two more banks
BANK NIAGA: Indonesian government closes two more banks


* J A P A N *

HATSUSHIMA CLUB: Resort hotel files for court protection
                 
ISUZU MOTORS: ISUZU books $38 mln net loss, first in 7 yrs
LONG TERM CREDIT: LTCB, NCB to repay total of Y800bn to DIC
NIPPON CREDIT: LTCB, NCB to repay total of Y800bn to DIC
                


* K O R E A *

DAEWOO HEAVY: Daewoo To sell shipyard to Mitsui group
JINRO COORS: Coors serious to take over Jinro brewery
KOHAP CORP: Creditors revise workout program


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

METRO PACIFIC: To use PhP420-M proceeds to cut down debts
PHILIPPINE AIRLINES: Foreign creditors key to PAL plan


* T H A I L A N D *

BANGKOK LAND: SCIB, B-land reach loan restructuring agreement
INTER FAR EAST ENGINEERING: Results announcement
KARAT SANITARYWARE: Negotiates with creditors
MODERNHOME DEVELOPMENT: To complete debt restructuring
NAKORNTHON BANK: NTB to name strategic partner tomorrow

THAI MILITARY BANK: To decide this week on applying for capital
THAI TELEPHONE: Telecom firms' plea to PM
WATTACHAK: Staff in grip of uncertainty


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

GUANGDONG ENTERPRISES: Provisions weighed over GDE exposure
                       
-----------------------------------------------------------
Union Bank of Hong Kong may make provisions for lending to
struggling Guangdong Enterprises (Holdings) (GDE) in the first
half of this year. Chief executive David Yau Man-tak, at the
bank's annual general meeting yesterday, declined to disclose the
bank's exposure to GDE, which is proposing to undergo a debt
restructuring. Mr Yau said the company was waiting to see how the
Guangdong government would handle the matter. GDE is the Hong
Kong commercial arm of the provincial government.

If agreement on the restructuring could not be reached by the
middle of the year, the bank's GDE loans would be classified as
non- performing, he said. In that event, Union Bank would make
provisions in the first half, Mr Yau said. However, Union Bank
would continue lending to mainland companies as it was confident
the market would recover.

Mr Yau said only 0.7 per cent of the bank's more than $3 billion
in mainland loans was doubtful. Heavy exposure to the mainland
saw Union Bank's attributable profit plunge 90.3 per cent to
$32.95 million last year after $295 million in provisions for  
bad and doubtful debts. Of that provision, $10 million had been
written back after more than $100 million was recovered in the
first quarter this year. (South China Morning Post 24-Apr-1999)


GUANGZHOU INTERNATIONAL: Shipyard sues Itics for $483m loans due
----------------------------------------------------------------
Guangzhou Shipyard has begun legal action against Guangzhou
Economic Zone and Technology Development Zone International Trust
and Investment and Guangzhou Foreign Economic and Trade Trust and
Investment, two out of three troubled Itics which it claims it
owe more than 519 million yuan (about HK$483.18 million).
Guangzhou Shipyard is one of many mainland enterprises owed money
by troubled Itics -- mainland non-bank financial institutions, of
which a large number are in dire financial straits.

Guangzhou Shipyard said yesterday it was also owed money by
troubled Guangzhou International Trust and Investment Corp
(Gzitic) -- the Guangzhou municipal government's commercial arm
-- as well as the Economic Zone and the Trade Trust.

Disclosure of Guangzhou Shipyard's legal move closely followed
news from fellow H-share Dongfang Electrical Machinery that it
had finally recovered 156 million yuan deposited last year in the
China Construction Bank. Guangzhou Shipyard said it did not know
how much of its money would eventually be recoverable.

Guangzhou Shipyard said it had decided not to take legal action
against Gzitic at this stage, as steps were being taken by the
"relevant authorities of the state" to restructure Gzitic's
debts.

But it said it initiated legal action against both the Economic
Zone and the Trade Trust on March 17.

Overdue deposits and related receivables made up 38.45 per cent
of its net asset value, it said. As of December 31, it had trust
deposits and designated deposits with non-bank financial
institutions of 519.28 million yuan and interest receivables of
36.65 million yuan. These included overdue deposits of 377.89
million yuan and related interest receivables of 21.52 million
yuan.

Guangzhou Shipyard has appointed BNP Prime Peregrine as financial
adviser to help recover its money.

Gzitic, like most mainland window companies, tapped short and
medium-term deposits to finance long-term operations, creating a
house of cards which was threatening to collapse under its burden
of liabilities.

Estimates in March showed Gzitic could owe more than $700
million.

The liquidity drought meant there was no fresh capital available
to repay liabilities as deposits matured.

Gzitic's Hong Kong finance arm had been ordered into receivership
while domestic creditors, such as Guangzhou Shipyard and Luoyang
Glass, had claimed Gzitic property in return for outstanding
liabilities. (South China Morning Post 26-Apr-1999)


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

BAKRIE & BROTHERS: Bakrie on brink of debt rescheduling
-------------------------------------------------------
Indebted conglomerate Bakrie & Brothers is on the verge of
sealing a landmark deal with creditors to settle its billion-
dollar foreign debt. A Bakrie spokesman said the final details of
the debt-equity swap were still being worked out and the company
would announce details of the deal today. Company sources said
the agreement probably would involve creditors taking an 80 per
cent stake in five of Bakrie's best assets, including its holding
in Bakrie Sumatra Plantations (BSP) and its 5.3 per cent holding
in the Iridium satellite communications network. Creditors would
also get 30 per cent of the rest of Bakrie & Brothers, in return
for writing off the company's foreign debt, which amounts to
about US$1 billion.

If the deal is formally confirmed, it will be the first debt
rescheduling agreement reached by any of Indonesia's debt-ridden
listed companies.

In a letter to the Jakarta Stock Exchange on Friday, the company
said it would give creditors 42 per cent of Bakrie Sumatra.

"According to the plan, 80 per cent of Bakrie & Brothers' stake
in Bakrie Sumatra Plantations . . . will be given to a group of
creditors. The amount is equal to 42 per cent of BSP shares," it
said. Bakrie holds 52.5 per cent of Bakrie Sumatra.

Company sources said Bakrie would also give up 80 per cent of its
subsidiary Bakrie Electric, petrochemicals unit Bakrie Kasei and
mining unit Arutmin Indonesia.

The outline of the plan has been circulating for months. Bakrie
said in January that most creditors had agreed to the deal, and
confirmed early last month it had reached agreement in principle
with its creditors. The deal will leave the influential Bakrie
family, who control the conglomerate, with only a minority stake.

Analysts have expressed surprise that the company has been in the
front rank of firms trying to strike deals with their creditors.
Many had expected the family would try to use its connections
with the government of President B.J. Habibie to escape or ignore
its obligations. Analysts said debt-equity swaps like the Bakrie
deal will provide a model for many future debt settlements.
Corporate debt restructuring in Indonesia has been in stalemate
for months.

Analysts said the country would remain in economic paralysis
until its indebted, capital-starved firms escape the straitjacket
of their ruinous foreign liabilities.

But amid deep political and economic uncertainty, a bankruptcy
law that has failed to act as an effective bargaining tool for
creditors, and a reluctance on the part of both debtors and
creditors to strike deals rather than waiting for conditions to
improve, progress has been painfully slow. (South China Morning
Post 26-Apr-1999)


BANK INDOVEST: Indonesian government closes two more banks
----------------------------------------------------------
The Indonesian government Friday closed down two joint-venture
banks and took over Bank Niaga in its final round of  
restructuring measures for the ailing banking industry. Bank
Indonesia Governor Sjahril Sabirin said that joint-venture Bank  
Indovest and Bank LTCB Central Asia would be closed down because
their owners failed to recapitalize the banks by the April 21
deadline.

Under the country's bank recapitalization program, designed to
lift banks' capital adequacy ratio (CAR) to the minimum 4 percent
level, joint-venture banks are not entitled to any government
funding facility, unlike domestic private banks which receive up
to 80 percent of their recapitalization funding requirement from
the government. CAR is the ratio between equity capital and risk-
weighted assets.

Only Bank Indovest and Bank LTCB had failed to meet the
recapitalization requirements, Sabirin was quoted by national
newspapers Saturday as saying. Publicly listed Bank Indovest is a
joint-venture between state-owned Bank Dagang Negara (51
percent), Japan's Bank of Tokyo Mitsubishi (18.14 percent), Nikko
Merchant Bank (17.43 percent) and the public (13.43 percent).
Bank LTCB is a joint-venture between Japanese Long Term Credit
Bank (75 percent) and Bank Central Asia (25 percent). (Xinhua
English Newswire 24-Apr-1999)


BANK LTCB: Indonesian government closes two more banks
------------------------------------------------------
The Indonesian government Friday closed down two joint-venture
banks and took over Bank Niaga in its final round of  
restructuring measures for the ailing banking industry. Bank
Indonesia Governor Sjahril Sabirin said that joint-venture Bank  
Indovest and Bank LTCB Central Asia would be closed down because
their owners failed to recapitalize the banks by the April 21
deadline.

Under the country's bank recapitalization program, designed to
lift banks' capital adequacy ratio (CAR) to the minimum 4 percent
level, joint-venture banks are not entitled to any government
funding facility, unlike domestic private banks which receive up
to 80 percent of their recapitalization funding requirement from
the government. CAR is the ratio between equity capital and risk-
weighted assets.

Only Bank Indovest and Bank LTCB had failed to meet the
recapitalization requirements, Sabirin was quoted by national
newspapers Saturday as saying. Publicly listed Bank Indovest is a
joint-venture between state-owned Bank Dagang Negara (51
percent), Japan's Bank of Tokyo Mitsubishi (18.14 percent), Nikko
Merchant Bank (17.43 percent) and the public (13.43 percent).
Bank LTCB is a joint-venture between Japanese Long Term Credit
Bank (75 percent) and Bank Central Asia (25 percent). (Xinhua
English Newswire 24-Apr-1999)


BANK NIAGA: Indonesian government closes two more banks
-------------------------------------------------------
The Indonesian government Friday closed down two joint-venture
banks and took over Bank Niaga in its final round of  
restructuring measures for the ailing banking industry. Bank
Indonesia Governor Sjahril Sabirin said that joint-venture Bank  
Indovest and Bank LTCB Central Asia would be closed down because
their owners failed to recapitalize the banks by the April 21
deadline.

Sabirin said the government decided to take over Bank Niaga,
which had originally qualified for the government-sponsored
recapitalization program, because the owners had declined to
provide the 20 percent funding requirement by the April 21
deadline. He said several foreign investors were still in the
negotiation process with Bank Niaga shareholders to provide the
20 percent recapitalization funding requirement. Sabirin said
except for Bank Niaga, all eight private banks had deposited  
their recapitalization funding requirement. (Xinhua English
Newswire 24-Apr-1999)


=========
J A P A N  
=========

HATSUSHIMA CLUB: Resort hotel files for court protection
                 
--------------------------------------------------------
The seaside resort hotel Hatsushima Club Co. and  its two
business partners filed for bankruptcy Monday, applying to the
Shizuoka District Court for protection from creditors under the
Corporate Rehabilitation Law, a court-appointed administrator
said.

Lawyer Tsuneo Osawa told a news conference that the court ordered
the assets of the three companies, with liabilities of 58 billion
yen, protected from creditors. The hotel was allowed to continue
normal operations.

Hatsushima Club, in the famous spa resort of Atami, is known for
having accommodated Peruvian President Albert Fujimori and then
Prime Minister Ryutaro Hashimoto during their summit July 1997.
Nihon Kaiyo Keikaku, the operator of the hotel, and N K Kanko, a
tourism company, also received protection from creditors.

The posh hotel took a hammering from a recession that has kept
many tourists away, the lawyer said.

The initial capital outlay of 48 billion yen for the hotel's
facilities, which the operators borrowed, have weighed heavily
upon the three. Major creditors include the Long-Term Credit Bank
of Japan, which was put under government administration last
October for its own huge bad-loan mess, as well as leading
general contractor Taisei Corp., he said. (Kyodo News
25-Apr-1999)


ISUZU MOTORS: ISUZU books $38 mln net loss, first in 7 yrs
----------------------------------------------------------
Isuzu Motors Ltd. said it booked a net loss of 4.5 billion yen
(US$38.18 million) for the fiscal year to March 31, its first  
loss in seven years. The carmaker, which hoped to offset
restructuring-related losses with proceeds from the sale of
assets, had earlier projected net profit of 1 billion yen. Sales
declined by 17% on the year to 934 billion yen. Dragged down by
the sluggish domestic economy, sales of ordinary trucks dropped
by almost 30% to some 80,000 vehicles. (Asia Pulse 26-Apr-1999)


LONG TERM CREDIT: LTCB, NCB to repay total of Y800bn to DIC
-----------------------------------------------------------
Long-Term Credit Bank of Japan and Nippon Credit Bank will repay
a combined 800 billion yen to Deposit Insurance Corp., DIC said
Friday. LTCB will repay 500 billion yen to reduce its borrowings
from DIC to 2.2 trillion yen, and NCB will repay 300 billion yen
to eliminate such borrowings, said DIC, Japan's banking industry
safety net. The government last year took temporary control of
LTCB and NCB after they became effectively insolvent. (Jiji Press
23-Apr-1999)


NIPPON CREDIT: LTCB, NCB to repay total of Y800bn to DIC
                
--------------------------------------------------------
Long-Term Credit Bank of Japan and Nippon Credit Bank will repay
a combined 800 billion yen to Deposit Insurance Corp., DIC said
Friday. LTCB will repay 500 billion yen to reduce its borrowings
from DIC to 2.2 trillion yen, and NCB will repay 300 billion yen
to eliminate such borrowings, said DIC, Japan's banking industry
safety net. The government last year took temporary control of
LTCB and NCB after they became effectively insolvent. (Jiji Press
23-Apr-1999)


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

DAEWOO HEAVY: Daewoo To sell shipyard to Mitsui group
-----------------------------------------------------
Daewoo is reportedly planning to spin off the Okpo shipbuilding
operations of subsidiary Daewoo Heavy Industries (DHI) and sell
part of its stake to Japan's Mitsui group to relaunch the unit as
a joint venture. A government official said Sunday that Daewoo
recently informed authorities that it plans to attract US$1.5
billion in foreign capital from Mitsui for the deal and borrow an
additional US$3 billion from various Japanese banks, including
the Export-Import Bank of Japan. The total US$4.1 billion will be
going to DHI. (Digital ChosunIlbo 26-Apr-1999)


JINRO COORS: Coors serious to take over Jinro brewery
-----------------------------------------------------
Coors, one of the world's largest breweries, is making a very
serious run to take over the financially-troubled Jinro Coors
Brewery Co. (JCBC), a beer-producing subsidiary of "soju" maker
Jinro. Coors CEO Peter Coors, now in Seoul to prepare a tender
for the initial bidding for JCBC, said his company is eager to
build on the "Cass" brand and focus on the huge potential of the
Korean market.

"If we are successful in our bid we will introduce more of our
expertise on the technology side to supplement the existing sales
and distribution network of JCBC," Coors said in a meeting with
reporters. He said that more detailed evaluations will have to be
conducted before he makes a final tender following the non-
binding initial bid scheduled for May 7 but that any bid he
submits will be "very strong."

Coors began its relationship with Jinro 10 years ago and provided
the necessary technology for building what Coors said is one of
the most technically advanced brewery in the world. The third
largest brewery in the United States invested $22 million in the
project for a 33 percent share in JCBC but was forced to write
the entire amount of its books after JCBC went bankrupt.

"One of the main reasons why we wrote off the debt was that we
wanted to make a clean bid for JCBC. We did not want to appear to
influence the bid as a creditor," said Coors, the fourth
generation of the Coors family to run the company since it was
established in Colorado in 1873.

"It has been suggested that Oriental Brewery is in a better
position to take over JCBC since it will create a bipolar market
but the reality is that having three player provides more options
for consumers," he said. Coors, who met with leading JCBC
creditors yesterday, added that OB's acquisition of JCBC is
certain to lead to its downsizing while Coors is prepared to
rehire virtually all existing workers. (Korea Times 26-Apr-1999)


KOHAP CORP: Creditors revise workout program
--------------------------------------------  
The Korean language Maeil Kyungje reported that, on April 23rd,
the creditors of Kohap Corporation, including Hanvit Bank, opened
a creditor council and revised the workout program for the Kohap
Corporation. Subsidiaries of the company started their workout
program last October. These subsidiaries include Kohap Ltd., a
maker of nylon and polyester goods, Kohap Inc., the trading arm
of the Kohap Group, and Korea Petrochemicals.


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

METRO PACIFIC: To use PhP420-M proceeds to cut down debts
---------------------------------------------------------
The management of listed diversified firm Metro Pacific Corp.
(MPC) said the 420 million Philippine pesos (PhP) it raised from
the sale of 200 million MPC shares in the market will be used to
further trim down its debts and reduce interest expense this
year. MPC chief financial advisor and director Ian C. Wilson said
in a press conference last Friday that proceeds of the sale,
along with investments of the Social Security System (SSS) and
the Government Service Insurance System (GSIS) in MPC, will serve
as the company's sources of funds for the remaining nine months
of the year.

A couple of weeks ago, 200 million shares of MPC were sold in two
blocks at the stock exchange with SSS as the rumored buyer. The
block sales consisted of 100 million shares priced at PhP2.1 per
share.

When asked, Mr. Wilson neither confirmed nor denied that the
state-owned pension fund bought the shares. "Funding support will
largely come from SSS and GSIS by investing in new shares of the
company and the 200 million shares that were sold at premium to
market from an interested company," he said.

Assuming SSS was the buyer of the shares, this would increase its
stake in MPC to 890 million shares which is equivalent to
approximately 5.3% of the company's outstanding capital stock
of 16.87 billion.

Proceeds of the sale would further reduce MPC's total obligations
amounting to PhP48.31 billion which were already trimmed down
last year through debt reduction activities. The company was able
to significantly reduce its consolidated debt by PhP21 billion
with cash generated from the sale of its 38% stake in Smart
Communications, Inc. MPC's interest-bearing debts were also
reduced by almost 50% last year to PhP24 billion compared with
the previous year. (BusinessWorld 26-Apr-1999)


PHILIPPINE AIRLINES: Foreign creditors key to PAL plan
------------------------------------------------------
The fate of Philippine Airlines now lies in the hands of its
foreign creditors which account for 75 percent of the ailing flag
carrier's $2.2 billion debts. Based on the voting procedures
drafted by the Securities and Exchange Commission on PAL's
rehabilitation plan, the creditors' vote -- which account for the
majority of its total loan obligations at a duly convened meeting
or a written consent signed by such holders -- will bind all
creditors.

The plan will be voted on by each of the following creditor
classes: fully secured aircraft claims, partially secured
aircraft claims, other secured claims, trade creditor claims,
retained operating lease claims, unsecured claims, and
subordinated claims.

"If one or more classes vote against the plan, the SEC may
nevertheless approve the plan if it determines that the plan has
been approved by holders of a majority in amount of the claims of
all creditors (without regard to class) and is fair to all
creditors in circumstances," the Commission said.

The SEC said its decision will be binding on all dissenting
creditors. Under this scenario, PAL's rehabilitation will greatly
depend on the decision or vote of foreign creditors who have a
bulk of PAL's total debts.

Each class may convene its own class meeting to vote on the plan
upon notice given to class members by representatives or by any
member of such class holding not less than 5 percent in amount of
claims.

A general meeting of creditors will be called by the SEC at which
creditors may attend and vote on the plan excluding any creditor
class that has convened its own meeting or voted on the plan by
written consent.

Any creditor that fails to file a claim by the SEC at which
creditors may attend and vote on the plan excluding any creditor
class that has convened its own meeting or voted on the plan by
written consent.

Any creditor that fails to file a claim by the date agreed upon
will also not be eligible to vote for the plan and its claims
will not be included in the distribution of payments under the
plan. (Manila Times 26-Apr-1999)


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

BANGKOK LAND: SCIB, B-land reach loan restructuring agreement
-------------------------------------------------------------
Siam City Bank (SCIB) reported success in restructuring debt of
Bangkok Land (B-land) worth 700 million baht of the total 4
billion baht, according to the bank's Executive Vice President
Krisda Hutaserani. The most obvious solution to debt
restructuring is to sell property development projects, he noted.

In the past, debt restructuring involving multiple creditors were
much more complex and unlikely to reach conclusion in short
time.

As B-land's only creditor, SCIB has negotiated with several
potential buyers both foreign and domestic to buy B-land's
property development projects. It has so far reached an
agreement to sell the entire units of Sun Moon Lakeside, a
condominium project, to the Ministry of Defense worth 700
million baht. The contract signing will be made in the next 1-2
months.

SCIB will try to free up cash tied up in the form of reserve for
bad debt by speeding up debt restructuring process. It had in the
past provided large amounts of loan to property development
sector, which contributed to the rise of its non-performing loan
(NPL) to as high as 67 percent of outstanding loans. (Business
Day [Thailand] 26-Apr-1999)


INTER FAR EAST ENGINEERING: Results announcement
------------------------------------------------
Inter Far East Engineering Plc (IFEC) reported to the
Stock Exchange of Thailand a net loss of Bt389.01 million
in its 1998 annual financial results, compared to a net loss
of Bt305.39 million a year earlier. (The Nation 26-Apr-1999)


KARAT SANITARYWARE: Negotiates with creditors
---------------------------------------------
Karat Sanitaryware, the country's largest sanitary producer, is
negotiating with its creditors, led by the Bank of Ayudhya (BAY),
on the restructuring of its 3 billion baht debt, according to the
company's chairman Suroj Supasawatkul. The restructuring plan
primarily comprises the extension of loan repayment period and
the reduction of lending rates. The plan also calls for a grace
period on repayment. Exact details were not revealed as
negotiation has yet to be finalized.

Apart from BAY, the Industrial Finance Corporation of Thailand
leads other local lenders in providing loans to Karat in dollar
term.

Suroj said the company started negotiating with its creditors
after it stopped paying debt principal last year. The discussion
on debt restructuring is expected to be concluded within this
year.

Karat is 43.22 percent owned by Siam City Cement (SCCC), the
country's second biggest cement maker, whose 25 percent was
taken over by Switzerland-based Holderbank Financier Glarus
last year. After the acquisition, SCCC is planning to sell off
either part or all of its equity in Karat to new strategic
partner.

Karat last year suffered from a 50-percent decline of the
domestic sanitaryware market because the country entered its
worst recession in more than 50 years. Karat's total sale revenue
declined by 10 percent from 1997 to about 1.3 billion baht last
year, he said. Despite a net profit of 2 million baht in 1998,
Karat recorded a loss of 400 million baht from its operation.
(Business Day [Thailand] 26-Apr-1999)


MODERNHOME DEVELOPMENT: To complete debt restructuring
------------------------------------------------------
Modernhome Development Plc reported to the Stock Exchange of
Thailand that its financial adviser, Asset Plus Securities Co
Ltd, would complete the company's debt restructuring plan by July
26, 1999. On March 30, the exchange announced that Modernhome was
to be placed on the delisting watch-list due to its negative
shareholding equity. (The Nation 26-Apr-1999)


NAKORNTHON BANK: NTB to name strategic partner tomorrow
-------------------------------------------------------
Nakornthon Bank will hold a news conference tomorrow to name
either United Overseas Bank Ltd of Singapore or UK-based Standard
Chartered Plc as its strategic partner. Nakornthon Bank will also
provide details of its capital-raising plan at the news
conference, a senior executive told Dow Jones yesterday. He said
the board of directors would vote on the stake sale and the
recapitalisation plan at a meeting today. The Stock Exchange of
Thailand suspended trading in NTB early yesterday. The bank
executive said the shares, which last traded at Bt3.30 each,
would remain suspended until after tomorrow's news conference.
(The Nation 26-Apr-1999)


THAI MILITARY BANK: To decide this week on applying for capital
---------------------------------------------------------------
THAI Military Bank (TMB) will probably decide on April 27 whether
or not to seek the government's aid to help the country's sixth
largest bank cope with mounting defaults, Finance Minister Tarrin
Nimmanahaeminda said. The government last year set up an $8
billion fund to provide ailing banks with capital. Many banks
have received debt aid, but only two have applied for equity
capital, which requires shareholders to write down existing
equity. TMB executives have repeatedly said a state-sponsored
bailout was an option, as the armed forces, which owns 42
percent, are strapped for cash.

"We have no money," said Army-in-chief Sarayud Chulanont, the
bank's chairman, said last month, as he indicated a target of 10
billion baht of new equity would be sought this year.

Thai Military Bank, owned about 42 percent by the Thai Armed
forces, had said in February its non-performing loans reached
about 111 billion baht or about 36 percent of its total lending.
To pave way for new investors, the bank increased its foreign
ownership limit to 49 percent, from the present 25 percent. A
requisite of the government bailout program is that private
investors at least match the state investment. Otherwise, the
lender would be seized. (Bloomberg, Reuters, Business Day
[Thailand] 26-Apr-1999)


THAI TELEPHONE: Telecom firms' plea to PM
-----------------------------------------
The leading four telecom companies led by financially-troubled
Thai Telephone & Telecommunication Plc (TT&T), TelecomAsia Corp
(TA), Total Access Communication (TAC) and Advanced Info Service
(AIS) last week proposed that Prime Minister Chuan Leekpai
suspend revenue-sharing according to their concession contracts.
They asked the government to halt the sharing of the revenues to
state telecom agencies until the government completes its telecom
legal reform and conversion of telecom concessions. (The Nation
26-Apr-1999)


WATTACHAK: Staff in grip of uncertainty
---------------------------------------
AFTER nearly two years of uncertainty, the management and
employees of Wattachak Group Plc, once a fast-expanding media
empire, are still unsure of their future amid the looming
prospect of the company going into oblivion. Wattachak's debts
have now topped Bt10 billion, far larger than its income-
generating ability during the long and difficult economic
downturn. Moreover, the company's stock has been suspended from
trading, its last closing price being Bt4.50 on Aug 14, 1997.

Over the past week, rumours have abounded in the form of signed
faxes and leaflets that the firm was about to close in order to
manage its massive debts, hence causing further confusion to the
500 or so workers of the newspaper and media firm, which still
publishes Wattachak daily and four weeklies.

Since late 1997, the firm has been trying to restructure its
debts, but to no avail. That failure has cost it dearly,
underlining doubts over its future business viability.

More interestingly, last Friday a fax surfaced at the firm
signed by Nikorn Pornsatit, its founder, major shareholder
and chairman, who had disappeared from the business scene for
more than a year and a half. The message was that he had
appointed Santi Ruangpaisarnbamrung as managing director and
Kingkarn Hongruan as acting chairman. This message prompted vice
chairman Praphan Boonyakiat to call a press conference yesterday
to clarify matters. He was quick to reassure the remaining
employees that the fax was not legal, and that he still had the
right to run the firm until end of his current term.

Since the baht devaluation on July 2, 1997, Wattachak has faced
severe difficulties after riding the economic bubbles during a
decade of excessive expansion and borrowing prior to the
country's economic decline. At the last count, Wattachak -- which
during its heyday was involved in cable TV, radio broadcasting,
newspaper and magazine publishing, among other things -- owed
more than Bt10 billion to foreign and Thai creditors. Nikorn
established Wattachak as a publisher of popular jobs and
recruitment, auto, and real estate magazines. In 1991, it
branched into newspapers and was listed on the stock exchange.

In 1993, it issued euro-convertible bonds worth US$53 million,
with JF Thanakom as its advisers. Another syndicate loan of $17-
18 million was borrowed by arrangement of Schroders Bank and Arab
Banking Corp, in addition to Bt3-billion of bills of exchange-
loans denominated in baht. Its paid up capital is Bt1.83 billion.

Praphan said yesterday that the group now had only one daily
newspaper and four weekly publications. At its zenith, the group
produced nearly 20 publications and its daily was third in terms
of circulation for Thai-language daily business newspapers, after
the Nation Multimedia Group's Krungthep Turakij and the Manager
Group's Manager daily. Earlier, Wattachak closed Thai Sky Cable
operations. It also set up Thai Radio News Co to replace Thai Sky
News for supplying news content to FM 101.

Over the past 18 months, Wattachak has faced lawsuits from
businesses and employees. Some labour suits have reached the
final stage, with the court allowing the plaintiffs to foreclose
company properties for the payment of debts. Praphan admitted
that moveable properties such as equipment had been foreclosed by
employees with court orders. Wattachak owed about Bt30 million in
compensation to workers previously laid off, and another Bt20
million to current employees.

Prapan, who has been with Wattachak for the past 15 years and
provided personal guarantees for Bt2-3 billion of the firm's
debts, will complete his directorship on April 29. "The final
judgment [on Wattachak] will be delivered by the board of
directors and shareholders, expected in the afternoon after the
board meeting," he said. (The Nation 26-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

Troubled Company Reporter -- Asia Pacific is a daily
newsletter co-published by Bankruptcy Creditors' Service,
Inc., Princeton, NJ USA, and Beard Group, Inc., Washington,
DC USA.  Debra Brennan and Lexy Mueller, Editors.

Copyright 1999.  All rights reserved.  ISSN: 1520-9482.  

This material is copyrighted and any commercial use,
resale or publication in any form (including e-mail
forwarding, electronic re-mailing and photocopying) is
strictly prohibited without prior written permission of
the publishers.  Information contained herein is obtained
from sources believed to be reliable, but is not
guaranteed.

The TCR -- Asia Pacific subscription rate is $575 for 6 months
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are $25 each. For subscription information,
contact Christopher Beard at 301/951-6400.

            * * * End of Transmission * * *