/raid1/www/Hosts/bankrupt/TCRAP_Public/990914.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, September 14, 1999, Vol. 2, No. 178

                                 Headlines


* C H I N A  &  H O N G  K O N G *

NANJING PANDA: Working on debt-for-equity swap
NEW TAIPEI FUND: Posts first-half loss
THEME INT'L HOLDINGS: Giordano Int'l in takeover bid
THEME INT'L HOLDINGS: Creditors face haircut in takeover
TSE SUI LUEN INT'L: White knight appears with proposal


* J A P A N *

TOSHIBA CORP.: Loss projected for year-end


* K O R E A *

CHOSUN LIFE: Buyer found, gov't to subsidize net worth
DAEWOO GROUP: 10 foreign creds. sue, attach assets
DAEWOO GROUP: Foreign creds. to receive equal treatment
DAEWOO GROUP: Collateral to be redistributed
DONGAH LIFE: No purchasers arise, asset transfer ahead
DOOWON LIFE: No purchasers arise, asset transfer ahead
HYUNDAI GROUP: FSC launches probe of financial units
HYUNDAI SECURITIES: Facing fines for price manipulation
KOREA FIRST BANK: Deal likely to close this week
KOREA LIFE: FSC to push ahead with insolvency
KYOBO LIFE: Suffering from Daewoo investments
PACIFIC LIFE: Buyer found, gov't to subsidize net worth
TAEHAN LIFE: Suffering from Daewoo investments
SAMBU FINANCE: Chairman arrested for embezzling
SAMSUNG LIFE: FSC to extend investigation a week
SAMSUNG LIFE: Suffering from Daewoo investments
SSANGYONG MOTOR CO.: Creditor banks give emergency funds


* M A L A Y S I A *

LABUAN SECURITIES: Secured creds. approve workout proposals
LIEN HOE CORP.: Reaches debt restructure with creditors
NIPPECRAFT LTD.: Trims interim net loss by 11%
UNITED ENGINEERS MALAYSIA: Considers asset injection plan


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

MONDRAGON INT'L PHILIPPINES: White knights soon on board?
PILIPINO TEL.CORP.: Marubeni Corp. seeks judicial relief


* S I N G A P O R E *

FIRST CAPITAL CORP.: Posts first-half loss


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

NANJING PANDA: Working on debt-for-equity swap
----------------------------------------------
The parent of China's Nanjing Panda Electronics, which is
listed in both Hong Kong and Shanghai, is planning a debt-
for-equity swap, company officials said yesterday.

"Our parent company has been selected as a target of the
debt-for-equity programme," one official of the listed
company said.

Nanjing Panda, a television maker which is shifting its
core business to telecommunications, said in July it was
talking to its controlling shareholder on asset
restructuring.  The China Business Daily said yesterday
that the swap would be handled by the China Cinda Asset
Management Corp, set up to help clear the bad loans of the
state-owned China Construction Bank.

China had selected Panda Electronics Group Corp and two
other companies in the eastern province of Jiangsu,
Lianyungang Alkali and Wuxi Huajing Electronics, for the
programme, the official newspaper said.  Cinda, modelled on
the US Resolution Trust Corp, had already signed agreements
with Shanghai Coking and Beijing Cement Plant for similar
swaps in the pilot programme, official media have said.

China plans to use the method to help resolve the bad debts
of its big state-owned commercial banks and reduce the debt
burden of state firms.  (Reuters, Hong Kong Standard  11-
Sep-1999)

NEW TAIPEI FUND: Posts first-half loss
--------------------------------------
New Taipei Fund says it accumulated a loss of US$1.99M in
the six months to June 30 compared with $2.1M a year ago.  
Losses per share were 11.97 cents against 11.52 cents
previously.  Net asset value was $22.5 per share compared
with $18.39 a year earlier.  The company recommended no
interim dividend.  The operating loss amounted to $165,177
compared with $257,055 last year.

THEME INT'L HOLDINGS: Giordano Int'l in takeover bid       
----------------------------------------------------      
Giordano International yesterday put forward a takeover bid
for struggling retailer Theme International Holdings in a
move which drew mixed reactions from analysts.

Giordano executive director Terry Ng Sze-yuen said the
proposed takeover would involve the purchase of a
controlling stake in Theme that could trigger a general
offer for the rest of the shares.  The proposal also
contained a partial repayment of Theme's outstanding debt
of $280 million and a business-restructuring plan, he said.

"We're buying Theme's networking and prosperity," Mr Ng
said, adding that Theme's women's wear could complement
Giordano's casual wear, which dominates the market in
Southeast Asia.

At the same time, Giordano could help Theme expand in the
region, he said.  Theme suffered an attributable loss of
$218.13 million for the year to March 31 from $806.62
million last year after realigning operations in the
mainland.  Giordano's attributable profit surged to $132.18
million for the first half from $20.75 million in the same
period last year due to efficient cost management. Giordano
holds $600 million in cash.

The success of the potential acquisition would depend on
approval by Theme directors, bank creditors and Giordano
shareholders, Mr Ng said.  If it succeeded, Giordano would
maintain Theme's listing, he said.  Theme closed yesterday
14.7 per cent lower at 29 cents, valuing the firm at
$181.85 million.

Director Kenneth Lai Ngan-long is the largest shareholder
with 24.33 per cent, which is believed to have been pledged
to banks for personal financing.  A European brokerage
analyst gave a thumbs down to the bid, and described it as
"a disgrace to Giordano".  ING Baring Securities (HK)
analyst David Li said his clients, including European and
United States institutional investors, "did not feel
positive" about the acquisition.

"If Giordano can't run Giordano Ladies well, how can it do
well on Theme?" he said.  "Theme's exposure to Emporium
Group in Singapore causes uncertainties."

Singapore-based Emporium Group, in which Theme holds an
indirect 55.72 per cent stake, filed for bankruptcy
protection last year. However, Mr Ng said Giordano had "a
detailed business plan" to restructure Theme's core
retailing business.  A French brokerage analyst supported
the deal and said it would expand the firm's brand
portfolio and product lines.  (South China Morning Post  
11-Sep-1999)

THEME INT'L HOLDINGS: Creditors face haircut in takeover
--------------------------------------------------------
Creditor banks of troubled Theme International Holdings
might have to suffer as much as an 88-per-cent write-off of
loans if a Giordano International takeover of Theme goes
ahead.

In a statement published today, Giordano said it had
submitted a preliminary proposal to Theme regarding the
possible acquisition of a majority equity interest.
The proposal involves an issue of new Theme shares at 2.5
cents each to inject fresh capital into Theme, which has
suffered from a serious liquidity problem. It also
suggested creditor banks of Theme might need to write off
88 per cent of loans.

Giordano said it intended to acquire a controlling interest
of Theme and maintain its listing. But it would not inject
new capital into Theme's Emporium Group.  Theme is engaged
in garment manufacture and retailing. It has faced serious
financial problems since mid-1998. For the year to 31 March
1998, it recorded a net loss of $806.62 million, including
a $245.4-million write-off related to the acquisition of
Emporium Group in 1997 and a $49.5-million write-off
related to associated company Fitlady Investment Holdings.

Emporium is a Singapore-listed department stores operator
now under judicial management and undergoing restructuring.
Theme disposed of its 40-per-cent interest in Fitlady in
December 1998 to raise about $90 million, in which $70
million was used to repay bank loans and loans provided by
a subsidiary under China Everbright, the second-largest
shareholder of Theme International.  The statement also
listed eight conditions for any acquisition deal.  (Hong
Kong Standard  13-Sep-1999)

TSE SUI LUEN INT'L: White knight appears with proposal     
------------------------------------------------------           
A white knight has emerged to aid troubled jeweller Tse Sui
Luen International, with a proposal to subscribe to new
shares equal to 16.6 per cent of its enlarged capital.  
East Giant, a supplier of less than 1 per cent of Tse Sui
Luen's jewellery for the year to February 28, has entered
into a conditional agreement to subscribe to 78 million
shares at 25 cents each.

This represents a 4.2 per cent premium to the closing price
of 24 cents before trading was suspended yesterday.  The
agreement is subject to the board of directors remaining
except for voluntary resignations, and that Tse Sui Luen
and East Giant enter into a rescheduling agreement with
bank creditors.

Tse Sui Luen has undertaken to use the $19.5 million raised
as working capital, and not for debt repayment.  Its debt
stood at $900 million as of February 28.  Last month, three
bank creditors demanded immediate repayment of $478
million, as a result of a breach of financial covenants
related to the borrowings.  (South China Morning Post  11-
Sep-1999)


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

TOSHIBA CORP.: Loss projected for year-end
------------------------------------------
Japanese electronics company Toshiba Corp is likely to post
a group net loss of 10 billion yen (S$155.1 million) for
the year ending March 31 despite projecting 25 billion yen
in profit, the Nihon Keizai Shimbun reported yesterday.
The estimated loss would be smaller than a loss of 13.9B
yen the electrical machinery firm suffered in the previous
year.

Toshiba had been hit by a worsening business environment,
with a fall in semiconductor prices in the first half of
the business year and a rising yen in the second. (Reuters,
Straits Times  13-Sep-1999)


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

CHOSUN LIFE: Buyer found, gov't to subsidize net worth
PACIFIC LIFE: Buyer found, gov't to subsidize net worth
-------------------------------------------------------
The Financial Supervisory Commission (FSS) plans to sign
memoranda of understanding (MOU) on the sale of two of the
five insolvent life insurance companies - Pacific and
Chosun - this week. The Tong Yang Group wants to take over
Pacific, while the Hyundai Group will acquire Chosun. The
government has decided to inject public funds to cover 80
percent of the minus net worth for Pacific and 50 percent
for Chosun.  (Korea Herald  13-Sep-1999)

DAEWOO GROUP: 10 foreign creds. sue, attach assets
--------------------------------------------------
Discontent over the government's handling of the Daewoo
crisis, some 10 foreign creditors of the ailing
conglomerate have taken legal action against it or attached
its overseas properties.

Analysts have expressed concern that if the foreign
lenders' concerns are not allayed, the emergency rescue
plan for Daewoo might hit the rocks.  About 10 out of 96
foreign creditors of the struggling Daewoo conglomerate
have filed lawsuits against the group for debt repayments
at local courts. Some have seized the properties or export-
related financial accounts of the group's overseas
operations, according to government and banking sources
yesterday.

With a number of legal proceedings by foreign creditors in
Europe already in progress, aimed at freezing Daewoo's
overseas properties and products, most of the group's 240-
plus foreign creditors are now ready to take a similar
course of action to secure their credit in the group.

"By internal bank regulation, we are advised to take legal
actions rather than negotiating with borrowers in a
situation like this. Almost all foreign banks have finished
reviewing legal options. Yet they have been refraining from
taking the radical measure due to their future business
relations with Korea," a European banker told The Korea
Times. "However, if the local financial authorities
continue to leave foreign banks out of the Daewoo's
restructuring process, legal actions will rush in to take
hold of the group's overseas assets. The FSC then will not
be able to control the situation," he said.

For example, a Dutch creditor has sequestrated Daewoo's
automobiles for sale in Amsterdam, the sources said.
The disgruntled lenders have not posed a serious problem
yet because they have relatively small exposure to Daewoo.
But experts are worried that if other creditors join the
ranks of the discontented, the corporate workout programs
now under way may encounter difficulties.

The foreign banker said that the next couple of days will
be the most critical period for the government-led forced
restructuring of Daewoo.

"The FSC should devote more time for the resolution of
Daewoo's $10 billion overseas debt. Without rescheduling
the group's foreign liabilities, the Daewoo crisis will
never end," the foreign banker said.

The banks want the Korean government to guarantee the debts
owed to them by Daewoo, while the government adheres to the
position that it is impossible for it to provide payment
guarantees for financial deals between private businesses.
The government said that it would instead let foreign
creditors participate in Daewoo's workout programs and have
an equal say in the process.

The government and Daewoo's domestic creditors will try to
assure foreign lenders that a successful workout will help
recover their loans, since they will end up losing their
investments if Daewoo goes bust.  Meanwhile, the
government-appointed Corporate Restructuring Committee will
today hold a meeting with domestic creditors to discuss
ways of dealing with issues concerning foreign lenders.

Presidents of Daewoo's six main creditor banks - Korea
First, Chohung, Hanvit, Korea Exchange, Seoul and Korea
Development - and three investment trust companies - Korea,
Daehan and Hyundai - will be on hand at the meeting.

"The differences between domestic creditors over Daewoo
workout schemes have yet to be reconciled, while foreign
creditors have still to be persuaded. Since foreign
creditors' roles are essential in Daewoo's restructuring,
we intend to treat them in the same manner as local firms
and encourage them to share the burden," said an official
at the committee.  (Korea Herald  13-Sep-1999, Korea Times  
12-Sep-1999)

DAEWOO GROUP: Foreign creds. to receive equal treatment
-------------------------------------------------------
Foreign creditors of the embattled Daewoo Group will be
given the same treatment as their domestic counterparts
with regard to the conglomerate's debt-workout programs,
the head of a corporate restructuring committee reiterated
yesterday.

"In tackling Daewoo's rehabilitation program, the
government will give the group's foreign creditors the same
rights as domestic creditors and apply the same
principles," said Oh Ho-keun, head of the Corporate
Restructuring Committee under the Financial Supervisory
Committee (FSC).

He made the remark after meeting with the heads of six
creditor banks and three investment trust companies on the
progress of the on-going workout programs.  It also
reflected the government's position that both domestic and
foreign creditors should be placed on an equal footing in
dealing with the Daewoo issue.

FSC Chairman Lee Hun-jai has stressed that the government
will not discriminate against Daewoo's foreign creditors in
tackling the Daewoo problem.  Discontent with the
government's handling of the Daewoo crisis, however,
foreign creditors are reportedly taking legal action and
seizing Daewoo's assets.

But Oh played down the impact of foreign creditors' actions
on Daewoo's workouts. "Legal actions being taken by small
foreign creditors are not hampering the 'big framework' of
the workout programs."

Late last month, Daewoo's domestic creditors put 12 units
of the nation's second largest conglomerate under
rehabilitation programs to stem their imminent defaults.
The 12 subsidiaries include such flagship firms of Daewoo
as Daewoo Motor, Daewoo Electronics and Daewoo Heavy
Industries.

Oh also said that it is not desirable to replace the top
managers of the 12 Daewoo subsidiaries at the moment. Under
the workout programs, the main creditor banks will
supervise the operations of the Daewoo units and can
supplant the management of each company if necessary.
(Korea Herald  14-Sep-1999)

DAEWOO GROUP: Collateral to be redistributed
--------------------------------------------
The Financial Supervisory Commission and Daewoo Group's
domestic creditors yesterday reached a decision to
redistribute 10 trillion won worth of collateral to each
affiliate.

Following an instruction from the FSC during a meeting at
the Korea Federation of Banks, the major creditors of
Daewoo, including six commercial banks and three investment
trust companies, agreed to reallocate the collateral based
on each subsidiary's chances of survival.  The new policy
was formed after the group's domestic and foreign creditors
voiced protests against the government's decision to keep
the collateral for the recovery of all 12 business units
currently under the government and bank-led forced
restructuring process.

They argued that holding assets of competitive subsidiaries
as collateral for the recovery of less competitive units
would bring down the overall value of Daewoo assets.

"The creditor banks will reexamine the value of Daewoo
properties and use some of them as collateral. As offering
assets of competitive subsidiaries to secure other
insufficient units would lead to a reduction of their
value, the creditors will work out the collateral issue
from scratch again," said Oh Ho-gen, executive chairman of
the FSC's Corporate Restructuring Coordination Committee.

Daewoo put up 10 trillion won in assets as collateral
earlier in a bid to secure new funds from banks and
investment trust companies before the group went under the
`corporate workout" program.  In return, creditor banks
agreed to provide fresh new loans of about 4 trillion won
including 2.5 trillion won worth of overnight loans to
rescue the group from bankruptcy.

With the 4 trillion proving insufficient to rescue the
country's second largest business giant, the financial
regulatory authority instructed domestic creditors to offer
an additional 2-3 trillion won worth of new capital to the
12 affiliates of the group under the workout scheme.
Yet as most local creditors feel insecure about subsidizing
the group indefinitely, the FSC decided reexamine the
collateral issue from scratch.

It is now expected that more competitive units of the group
will be able to get further assistance from creditor banks,
using newly assigned collateral assets for survival while
inefficient operations will eventually be forced to be
liquidated.  Regarding the increasing number of legal
actions filed by foreign creditors, freezing Daewoo's
overseas assets, the chief restructuring official said that
it is not going to affect the workout process.

"Those claimed through legal action are minor cases. The
FSC believes that legal proceedings will not get in the way
of the government- and bank-led reform of Daewoo," Oh said.

But Oh again failed to elaborate on how foreign banks will
be allowed a say in the Daewoo restructuring program.
Regarding the status of present board members of the 12
affiliates under corporate workout process, he said that
there will not be any management shuffle for the time
being.

"Changes in management are not being considered for the
time being. The present executive board members of the 12
units will stay until the emergency is taken care of," he
said.  (Korea Times  13-Sep-1999)

DONGAH LIFE: No purchasers arise, asset transfer ahead
DOOWON LIFE: No purchasers arise, asset transfer ahead
------------------------------------------------------
The Financial Supervisory Commission (FSS) says no
candidates have come forward to purchase the insolvent
Dongah and Doowon life insurance companies, so the
commission plans to transfer their assets and contracts to
healthy insurance firms.  (Korea Herald  13-Sep-1999)

HYUNDAI GROUP: FSC launches probe of financial units
----------------------------------------------------
The Financial Supervisory Commission (FSC) launched
Saturday what will be a series of related investigations
into the financial-sector businesses of the Hyundai Group,
advancing their original schedule to begin their
investigations by one week.

The government financial-sector watchdog began with a look
into Hyundai Investment and Credit Corp. today, with a plan
to eventually comb through a total W323 trillion in
operational funds of Hyundai subsidiaries, including its
high-profile Buy Korea Fund. The FSC will begin
investigating Hyundai Securities the end of next week, with
investigation of other subsidiaries such as Hyundai
Investment Credit and Securities and Hyundai Marine
Insurance to be started by early next month.  (Digital
ChosunIlbo  11-Sep-1999)

HYUNDAI SECURITIES: Facing fines for price manipulation
-------------------------------------------------------
Hyundai Securities could see itself hit with a fine of up
to W400 billion for share price manipulation, according to
statements from the prosecutor's office made Friday.

The prosecution, which is currently investigating the
alleged attempts of Hyundai Securities chair Lee Ik-chee to
drive up the price of Hyundai Electronics shares, has
estimated that Hyundai's securities unit gained as much as
W140 billion. With local laws against stock price
manipulation allowing for a maximum fine of three times the
amount of illegal gains, Hyundai Securities could, as a
result, be fined between W300-400 billion, while Lee could
face a prison term of 10 years if found guilty.  (Digital
ChosunIlbo  11-Sep-1999)

KOREA FIRST BANK: Deal likely to close this week
------------------------------------------------
The stalled negotiations on the sale of Korea First Bank
are expected to be concluded soon, possibly within the
week.

The Financial Supervisory Commission (FSS) resumed talks
with Newbridge Capital on the sale of Korea First Bank last
week, nearing agreement on such contentious issues as the
sale price and compensation for losses after the U.S.
investment company's takeover, according to an industry
source.  

On the period and scope of compensation, the two sides
reportedly agreed that the Korean government is to take
over all bad assets during the first year after Newbridge's
acquisition and 20 percent of bad assets during the second
year.  The government also offered to take responsibility
for all the losses caused by the bank's outstanding loans
to the Daewoo Group.

On asset valuation, the government reportedly accepted the
mark-to-market method demanded by Newbridge, dropping its
insistence on the book-valuation approach.  A source close
to the negotiations said the two sides are working on
details of an agreement after having addressed differences
on major issues.  (Korea Herald  13-Sep-1999)

KOREA LIFE: FSC to push ahead with insolvency
---------------------------------------------
The Financial Supervisory Commission (FSC) decided Monday
to move ahead with its earlier plan to designate Korea Life
Insurance as a non-viable financial institution and order
it to reduce outstanding stocks to nil.

After declaring the self-recovery plan proposed by the
Korea Life's present management "insufficient," the
financial authority decided to implement an emergency
rescue plan of nationalizing the life insurance by
injecting public funds.

The FSC, last week, gave seven days to the incumbent board
members of Korea Life to come up with a comprehensive self-
recovery package for the third largest insurer of the
nation.

"The FSC believes seven days were enough for Korea Life to
submit its recovery plan. Yet it failed to do so," said an
FSC official. "We will conduct swift restructuring of the
life insurance by nationalizing it immediately. We will
also scrap all existing shares of the firm before injecting
public funds," he said.

The FSC said that it made its Monday decision because Choi
and probable investor Panacom, a United States-based
investment firm, were unable to come up with a realistic
plan, only requesting the FSC to wait further on their next
move.

The Seoul District Administrative Court had ruled that the
FSC had failed to follow due procedure in its original move
to divest the firm's current major shareholders of their
management rights through injecting several trillions of
won in government funds. Observers say, however, that the
FSC's latest move, which basically sticks to its earlier
plan, does not completely rule out the possibility of
another round of legal hassles between the FSC and the
existing major shareholders of Korea Life in the near
future.  (Digital ChosunIlbo, Korea Times  13-Sep-1999)

KYOBO LIFE: Suffering from Daewoo investments
SAMSUNG LIFE: Suffering from Daewoo investments
TAEHAN LIFE: Suffering from Daewoo investments
-----------------------------------------------
Kyobo, Samsung and Taehan life insurance companies have
taken a massive hit due to investments made in Daewoo.
Samsung Life, in particular is reeling as it shoulders 70%
of the total insurance firms' investment into Daewoo's
company bonds and CPs at W135.9 billion.

According to figures released by the Financial Supervisory
Service (FSS), as of July 22, the companies had also loaned
W1.1526 trillion to Daewoo; comprising W494 billion from
Kyobo, W405.4 billion from Taehan and W253.2 billion from
Samsung. However, only W33.5 billion of Samsung's loans are
secured and so will face the biggest loss of the three. In
addition, Cheil Life, recently sold to Allianz of Germany
loaned Daewoo, W82 billion.  (Digital ChosunIlbo  13-Sep-
1999)

SAMBU FINANCE: Chairman arrested for embezzling
-----------------------------------------------
The Central Investigation Department of the Supreme Public
Prosecutor's Office formally arrested Yang Jae-hyuk, the
45-year-old chair of Sambu Finance, Sunday, on charges of
embezzling W79.6 billion in company' funds, including money
from client investment funds.

The Prosecutor's Office said in the arrest warrant that
Yang had hoarded W45.7 billion of general investment funds
since 1996. According to the warrant, Yang used some of the
money he had hoarded to establish 5 company subsidiaries,
including Hankyul Finance and to make capital increases at
the subsidiaries, while embezzling a W24.9 billion portion
under the pretext that the money was compensation for his
personal services.

The Prosecution also revealed that Yang embezzled some W8.6
billion to buy real estate, with W1 billion of that going
into a general investment fund to buy a villa in Pangbae-
dong, Seoul.  The Prosecution says that Yang also had paid
W450 million to a former Miss Pusan, with whom he had once
lived. Yang was likely seeking to avoid a repeat of an
earlier situation in which in an affair with another woman
that became public, he had faced legal action under a
Korean law which forbids inducing a woman into sexual
relations under the pretext of marriage.

Investigating team official Lee Jong-wang stated that
although they had confirmed that Yang had spent US$1.1
million to build a branch office in the United States, it
was not certain whether the move constituted an attempt to
illegally take money out of the country. Lee said that the
Prosecutor's Office plans to try to minimize any loss on
the part of the finance company's former clients by
recovering as quickly as possible monies Yang had embezzled
from client investment funds.  (Digital ChosunIlbo  13-Sep-
1999)

SAMSUNG LIFE: FSC to extend investigation a week
------------------------------------------------
The Financial Supervisory Commission (FSC) reports that it
plans to extend its investigation into Samsung Life by yet
another week due to a lack of cooperation from Samsung
employees. The probe had earlier already been extended by a
week for the same reason.

The FSC has also begun reviewing the financial status of 11
merchant banks to ensure that they met a minimum BIS
capital adequacy ratio of 8% by the end of June. The FSC
also plans to check that five more merchant banks also meet
the minimum capital adequacy ratio next week.  (Digital
ChosunIlbo  11-Sep-1999)

SSANGYONG MOTOR CO.: Creditor banks give emergency funds
--------------------------------------------------------
Creditor banks decided to extend $80 million in emergency
funding to Ssangyong Motor Co., a unit of the ailing Daewoo
Group, to help normalize the automaker's exports, banking
sources said yesterday.  The $80 million rescue fund
included $30 million for the purchase of documents against
acceptance (D/A) and $50 million for the opening of import
letters of credit, said the sources.  (Korea Herald  13-
Sep-1999)


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

LABUAN SECURITIES: Secured creds. approve workout proposals
-----------------------------------------------------------
Labuan Securities Sdn Bhd's secured creditors have approved
the workout proposals prepared by the special
administrators appointed by Pengurusan Danaharta Nasional
Bhd.  The workout proposals were aimed at maximising
returns to the creditors and shareholders.

In a statement issued yesterday by the company's special
administrators--Gan Ah Tee, John Ho Shui Fah and Ooi Woon
Chee of KPMG Corporate Services Sdn Bhd--it said the agreed
workout proposals involved:
* The takeover of Labuan Securities by Share Technology
Capital Group Sdn Bhd for RM40mil, of which RM17mil would
be used to pay all creditors of Labuan Securities while the
balance RM23mil for working capital.
* The transfer of all liabilities to a special purpose
vehicle (SPV) with two voting shares of RM1 each and
wholly-owned by the special administrators.
* The issuance of 40 million new shares of RM1 each to
Share Technology as consideration for its RM40mil cash
injection.
* An undertaking by Labuan Securities to pay the SPV 80% of
any recovery of existing debts owed to Labuan Securities
and any reduction in tax payable, arising from losses
incurred prior to the takeover by Share Technology.
* The use of part of the RM17mil to pay identified
preferential and essential creditors. The balance and the
consideration for the assets of Labuan Securities (to be
paid by Share Technology) will be transferred to the SPV as
consideration for assuming the liabilities. The special
administrators will use the sums to settle the liabilities
in SPV through a liquidation process, in which any excess
would be accrued to the existing shareholders of Labuan
Securities.

The administrators noted that before the workout proposal
can be implemented, the special administrators must obtain
approval from the Securities Commission and other relevant
regulatory bodies.  They also said creditors and
shareholders can examine the details of the workout
proposal from 9am to 5pm on Monday to Friday at Labuan
Securities Sdn Bhd, c/o KMPG Corporate Services Sdn Bhd,
8th Floor Wisma KMPG, Jalan Dungun, Kuala Lumpur.  (Star
Online  11-Sep-1999)

LIEN HOE CORP.: Reaches debt restructure with creditors
-------------------------------------------------------
Lien Hoe Corp Bhd has reached a debt restructuring
agreement with its creditors, said the Corporate Debt
Restructuring Committee (CDRC).

The restructuring would involve converting RM212mil worth
of debt through an extension of the tenure period and a
secured bond issue, a rights issue of warrants, a capital
reduction and share consolidation, and the acquisition of
two properties.  The CDRC said in a statement yesterday
that Lien Hoe and its subsidiary Lien Hoe Resorts have
proposed to restructure RM127.2mil or about 60% of the
restructured debt by extending the tenure of the existing
facilities to a seven-year period at the prevailing
interest rates of the creditor banks.

The company also proposed to convert the remaining
RM84.8mil of debt into an equivalent amount of five-year 5%
redeemable secured bonds and pay RM16.4mil cash for a
redemption yield of 10%.  The restructured loans and bonds
would be secured against existing collateral.  The CDRC
said Lien Hoe also proposed to issue up to 254.3 million
warrants on the basis of one warrant for every one Lien Hoe
share.

Each warrant carries the right to buy one ordinary RM1
share at an offer price to be determined.  The CDRC said
the estimated proceeds of RM58.5mil from the rights issue
of warrants, at an indicative issue price of 23 sen each,
would be used by Lien Hoe to redeem existing loan stocks,
repay lenders in respect of the bonds, for working capital
and restructuring expenses.

The committee said that Lien Hoe's substantial shareholder
Beta Holdings had given an undertaking to subscribe to its
own entitlement and up to a maximum of 127 million
warrants. The balance of the warrants would be
underwritten.  In addition, the CDRC said Lien Hoe would
implement a capital reduction exercise, as previously
announced, where it would reduce its paid-up share capital
by 25 sen from every RM1 share.

Subsequently, four 75 sen shares would be consolidated into
three shares of RM1 each.  The credit of RM67.5mil arising
from the capital reduction scheme would be used to reduce
Lien Hoe's accumulated losses as of Dec 31, 1998, of
RM143.2mil to RM75.6mil.  As part of the restructuring
exercise, Lien Hoe has entered into a supplemental
agreement to acquire Billiontex Industries Sdn Bhd for
RM72.8mil.

The CDRC said that RM15.5mil had been paid to the company
and the balance of RM57.3mil would be satisfied with an
issuance of RM57.3 million five-year 2% irredeemable
convertible unsecured loan stocks (Iculs).  The company
also entered into a supplemental agreement to acquire
Rusella Tengah Sdn Bhd for RM73.5mil. The CDRC said that
RM15.5mil had been paid and the balance would be satisfied
with the issuance of RM58mil five-year 2% Iculs.

Billiontex and Rusella both own 48.6ha of commercial land
in the vicinity of Cyber Jaya and Putra Jaya.  The
acquisitions will give Lien Hoe the opportunity to build up
a sizeable land-bank for future development and to derive
income from development and potential gain from disposal.
Apart from the two properties, the CDRC said Lien Hoe had
also entered into a conditional sale and purchase agreement
to acquire the entire stake in Atria Properties Sdn Bhd for
RM51.6mil in new ordinary shares of RM1 each.  Atria
Properties owns the Atria Shopping Centre in Petaling Jaya
and the acquisition would contribute immediately to the
earnings of the Lien Hoe group through rental income.  
(Star Online  11-Sep-1999)

NIPPECRAFT LTD.: Trims interim net loss by 11%
----------------------------------------------
Nippecraft Ltd's interim net loss has narrowed 11.1 per
cent to $1.2 million. Turnover slid 2.3 per cent to $24.5
million. Loss per share was 0.34 cent against 0.39 cent a
year ago. Net tangible asset backing per share was
4.87cents, up from 3.92 cents.  (Business Times  11-Sep-
1999)

UNITED ENGINEERS MALAYSIA: Considers asset injection plan
---------------------------------------------------------
United Engineers Malaysia Bhd said it is considering
injecting certain assets of the company into Central
Malaysian Assets Sdn Bhd. UEM said in reply to a Kuala
Lumpur Stock Exchange query that an announcement will be
made when a decision on the matter is taken. Earlier this
week, it announced that it, Malayan Cement Bhd and Kedah
Cement Holdings Bhd have entered into a memorandum of
understanding which includes, among others, the transfer of
Kedah Cement's listing status to a new company, Central
Malaysian Assets Sdn Bhd.  (Business Times  11-Sep-1999)


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

MONDRAGON INT'L PHILIPPINES: White knights soon on board?
---------------------------------------------------------
Mondragon International Philippines, Inc. (MIPI) is
optimistic it will be able to settle things with Clark
Development Corp. and move on with its life. The
financially distressed firm is said to have found saviors
in the persons of two big-time casino operators.

BusinessWorld sources in the company said MIPI is now close
to a deal with Macau casino tycoon Stanley Ho for a still-
to-be-determined stake in the company. Mr. Ho, owner of
Sociedade de Turismo e Divorses de Macau (STDM), operates
several casinos in China such as the famous Macau Palace
floating casino.  It is also talking to Chinese-Filipino
businessman William Gatchalian who wants to expand his hold
on the resort and leisure business.

The only possible hitch is MIPI's debts. Sources said Mr.
Gatchalian is seriously studying his options given MIPI's
huge obligations.  MIPI holds its annual meeting on the
20th with the hope of presenting something concrete to its
stockholders by then.

"Mondragon is now finalizing arrangements for the entry of
a local and a foreign investor and the subsequent reopening
of the Mimosa Regency Casino," Pierre Paul S. Buhay told
the Philippine Stock Exchange (PSE).  "Mondragon is also
exerting utmost effort to finalize arrangements for the
settlement of its obligation to the government at the
soonest time possible."

The company owes CDC 325 million Philippine pesos (US$8.12
million at PhP40.032=US$1) in unpaid rentals, the
Philippine Amusement and Gaming Corp. some PhP85 million
($2.12 million) representing the 10% guaranteed share from
casino earnings and the Bureau of Internal Revenue some
PhP30 million ($749,400) in tax payments. It also owes
several creditor banks some PhP6 billion ($149.9 million).

Earlier, MIPI was to raise as much as $175 million by
selling a 40% stake in the company to a strategic investor.
Mr. Buhay also said MIPI believes it can still meet its
obligations to the government under the compromise
agreement with CDC signed last June. "the said agreement
provides that Mondragon has until June 30, 2000 to pay in
full the PhP325 million," he said.

He also clarified reports (not in BusinessWorld) that CDC
can now take over the Mimosa property, saying the state
agency can not in the absence of a writ of execution.
Meanwhile, the CDC is expected to file today a motion for a
writ of execution before the Angeles Regional Trial Court
to enable the state agency to take over the Mimosa property
in the absence of MIPI's PhP50-million ($1.25 million)
payment representing the first of six tranches.

"We cannot delay the filing of the motion with the RTC
because we have to ensure that our interest as landlord is
adequately safeguarded. But if Mimosa say they have come up
with something, then we can go back to the table again and
discuss a lease agreement," CDC president Rufo Colayco told
BusinessWorld in a phone interview.

Mr. Colayco added that the CDC is assuring the creditor
banks that "whoever investor comes in we will give him a
new lease only after an orderly arrangement with the
banks."

MIPI's creditors include Asian Bank, Metropolitan Bank and
Trust Co., United Coconut Planters Bank, Philippine Banking
Corp., TA Bank and DaoHeng Bank.  The Supreme Court deemed
"final and executory" a compromise agreement which set the
timetable for the payment of MIPI's obligations to the
government.  The compromise had Mondragon promising to pay
in seven installments PhP325 million ($8.12 million). The
first payment was supposed to have been made last Aug. 27.
In addition, it would also have to pay PhP110 million
($2.75 million) a year for 44 years with a 10% increment
for the first 10 years and 9.5% increment for the remaining
years. (Business World  13-Sep-1999)     

PILIPINO TEL.CORP.: Marubeni Corp. seeks judicial relief
--------------------------------------------------------
Japanese sogo shosha Marubeni Corp. is determined to
protect its investments in the country and is seeking the
help of the Supreme Court (SC) to prevent creditors of
debt-saddled Pilipino Telephone Corp. (Piltel) from going
after its properties.

In a motion, the Japanese firm said the trial court's
failure to declare Marubeni as legal owner of materials and
equipment used in establishing a local telephone exchange
service for Piltel will prejudice its interests.  Piltel is
the cellular arm of First Pacific-owned telecom giant
Philippine Long Distance Telephone Co. (PLDT). Marubeni
asked the High Tribunal to give an additional 30 days to
finalize all pleadings and formally appeal the case.

"The Makati Regional Trial Court (RTC) decided issues
raised by the parties in a way probably not in accordance
with law," Marubeni said through counsel Philip Sigfrid A.
Fortun. It said it will file its Supreme Court case by
October 4.

In 1996, Marubeni bagged the bidding among five contractors
for Piltel's local exchange project in Southern Mindanao.
The contract, involving the installation of 400,000 land
lines, costs $279.21 million.  Piltel -- as mandated by
Executive Order (EO) 109 and Republic Act 7925 -- is
required to put up 400,000 landlines before the end of
1998. The National Telecommunications Commission (NTC)
carved out 11 "unserved" service areas where each cellular
phone company given license by the commission would
operate.

Marubeni and Piltel entered into a Build-and-Transfer
Agreement in August 1996, which was subsequently amended in
October 1998. The three-phased Mindanao project was set for
completion by November 1998.  After completion of each
phase, Marubeni agreed to give Piltel sole control of the
materials, equipment, tools and supplies installed in the
project site so that "it may immediately be used to
generate revenues to finance the purchase price of the
project."

Despite giving Piltel the custody of the materials, titles
remained with Marubeni.  Marubeni's move to take control of
the Mindanao assets resulted from the reported poor
finances of the cellular company. It claims receivables
from the PLDT subsidiary have already ballooned to 34.9
billion Philippine pesos (PhP) (US$872 million at
PhP40.032:US$1).

In February, when creditors started moves to attach some
properties of the cellular company, Masahiro Uegaki,
project manager of Marubeni-Piltel Mindanao EO 109 Project,
asked the trial court to declare Marubeni as the "sole and
legal owner of the materials, equipment, tools, components
and supplies which had already been delivered and installed
in their project sites in Mindanao covered by their Build-
and-Transfer Agreement."

"Not only is there immediate threat the defendant's
creditors may attach or use these properties as payment of
defendants unpaid debt, there likewise exists the threat
that defendant will allow its creditors to do so by
remaining silent as to the identity of the legal owner of
the materials and equipment," Mr. Uegaki said.

Piltel asked the Makati RTC to dismiss the case, stressing
there is "no imminent danger" of violation of the
agreement.  Judge Zeus C. Abrogar said the contract between
the parties is "clear" and there is also no need to declare
Marubeni as absolute owner of properties used in the
Mindanao project

"Their rights and duties are spelled out clearly and
without any ambiguity. Thus, declaration or construction of
its terms is not necessary," judge Abrogar said in his June
22 decision.

The subsequent appeal was also dismissed. The judge said
there is "no cogent reason" to disturb its original
decision.  Piltel has been separately negotiating with
three creditor groups -- banks, suppliers and bondholders -
- to restructure its obligations.

Piltel's PhP4.1-billion (US$102 million) net loss was
saddled by almost PhP4 billion in one-time adjustments,
particularly on provisions for bad debts, inventory losses,
reversal of profit on building disposal, write-off of
capitalized sales commission and uncollected
interconnection bills.  Some of the big lenders are the
Land Bank of the Philippines, Chase Manhattan Bank N.A.,
Bank of America NT & SA, Philippine Commercial
International Bank, Far East Bank and Trust Co., Deutsche
Bank, Bank of the Philippine Islands, US Export-Import Bank
and Credit Agricole Indosuez.

Other creditors are Banco Santander, Bank of Commerce,
China Banking Corp., Equitable Banking Corp., Global Bank,
HSBC, Metropolitan Bank and Trust Co., Philippine Banking
Corp., United Coconut Planters Bank, ING Bank, Banque
National de Paris, Citibank N.A., Credit Lyonnaise and
Standard Chartered Bank.  (Business World  13-Sep-1999)


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

FIRST CAPITAL CORP.: Posts first-half loss                 
------------------------------------------              
First Capital Corporation yesterday announced a net loss of
$146 million for the year to June 30, following extensive
provisions for much of its portfolio. In the previous
interim, it posted a $23 million loss.

"But we expect to return to the black in the current
financial year as the Singapore economy is benefiting from
the greater optimism in the region," FCC chief executive
Quek Chee Hoon told BT.

His confidence was probably bolstered by the almost $350
million in cash raised since the end of its financial year
from the sale of such assets as a 22.6 per cent stake in
Sea View, the securitisation of its Century Square Shopping
Centre in Tampines, Kovan Centre in Yio Chu Kang and the
sale of nearly 100 units of its Aquarius by the Park
condominium at Simei.  The company is also expected to
raise further cash from the sale of the second phase of
Aquarius comprising some 250 units and its 40 per cent of
the proposed Ladyhill condominium development. It also
disclosed that there are parties interested in buying its
A-Z Building which it values at over $75 million.  

While most analysts had expected the Singapore-listed
property arm of Malaysian tycoon Quek Leng Chan (no
relation to Chee Hoon) to be in the red, the final result
was almost double the consensus forecast of $75.6 million
by those polled by Barra's Global Estimates.  However, it
was below the forecast of foreign firms like CS First
Boston (-$152 million), Goldman Sachs (-$188 million), Ing
Barings (-$161 million), Jardine Fleming (-$166 million)
and Merrill Lynch (-$153 million).

The group attributed its 25 per cent lower turnover of $471
million to the sale of fewer development units during the
year with only one project launched, Aquarius.  After
having reviewed the carrying value of its residential and
commercial properties, FCC decided to make an aggregate
provision of $146 million on the properties and as a result
recorded an operating loss of $71 million. Higher interest
costs and losses suffered by its associates were also
factors.

"We are quite comfortable with the level of provisions,
given the prevailing state of the property market," CEO
Quek remarked, adding that the group decided to take in its
losses at the end of its financial year rather than at its
interim as the property market was still fluid in December.

FCC also reported an extraordinary loss of $33.89 million
for FY99 compared with nil the previous year due to the
losses from things like the sale of its Sea View shares, a
property at Lucky Plaza and its stake in Kaki Bukit
Techpark.  As a result, its bottomline loss climbed to
$179.4 million, compared with $23.2 million previously.

Still it is maintaining its dividend of 5 per cent while
loss per share was at 50.2 cents, five times the previous
year's 10.5 cents. Net tangible assets per share amounted
to $2.78, down from the previous $4.08 but still higher
than the $2.37 closing price of its shares on the stock
market yesterday.  Mr Quek disclosed that the group would
continue to be on the lookout for suitable sites to build
up its landbank and would participate in some of the
government's proposed land sales.  (Business Times, Straits
Times  11-Sep-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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