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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

         Tuesday, September 21, 1999, Vol. 2, No. 183

                            Headlines


* C H I N A  &  H O N G  K O N G *

BEIJING DEVELOPMENT: First-half loss widens
GKC HOLDINGS: Submit trading scheme or be delisted        
ING BEIJING: Posts first-half loss                    
LEADING SPIRIT HIGH-TECH: Share placement to reduce debts
MUI HONG KONG: Posts first-half loss
SHOUGANG CONCORD: Posts first-half loss


* I N D O N E S I A *

BANK BALI: Scandal here could be tip of the iceberg


* J A P A N *

SAPPORO BREWERIES: To launch new beer to reduce debts


* K O R E A *

DAEWOO GROUP: Gov't rejects foreign creditors' plea
HYUNDAI SECURITIES: Chair facing indictment, arrest
KOREA FIRST BANK: Newbridge must keep stake at least 2 yrs.
SAMSUNG MOTORS: Creditors pick managers of sale


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

MONDRAGON INT'L PHILIPPINES: Stockholder meeting demanded
PHILIPPINE TEL. CORP.: Debt-restructure deal near


* T H A I L A N D *

EASTERN STAR REAL ESTATE: Expects rehab plan by year-end
TELECOMASIA CORP.: Agreement reached on rehab plan
THAI MODERN PLASTIC INDUSTRY: SEC probing for more evidence


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

BEIJING DEVELOPMENT: First-half loss widens
-------------------------------------------
Financially ailing Beijing Development saw its net loss
widen 31% to $12.53M for the first half of the year.  Its
loss per share also increased, to 14.6 cents, compared with
11.1 cents loss for the previous period.  The compared
recommended no interim dividend payout.  It blamed its
increased loss on slack world demand for woollen and
worsted products and severe price-cutting competition from
mainland manufacturers.  It also cited stagnant commercial
and industrial property markets.

GKC HOLDINGS: Submit trading scheme or be delisted         
--------------------------------------------------             
The stock exchange will de-list kitchen-materials trader
GKC Holdings if the company fails to submit a proposal to
resume trading its shares before March 16 next year.

GKC's problems surfaced in July 1998, only seven months
after it went public. In that month, the group was hit by a
tidal wave of court claims and a raid of its offices by the
Commercial Crimes Bureau (CCB).  Trading in its shares has
been suspended since then and its main subsidiary, German
Kitchen (China), was put into liquidation on October 22
last year.

Liquidator KPMG revealed in February that German Kitchen
suffered an estimated deficiency of $594.21 million and
that it owed its unsecured creditors a total of $796.72
million.  The liquidator also had initial findings of
alleged fraud involving four of GKC's directors and
referred the case to the CCB. KPMG indicated German Kitchen
had a very small amount of assets such as bank deposits and
would cease operation as soon as it completed an amount of
unfinished contracts.

The stock exchange said the company should have a
sufficient level of operations and tangible assets of
sufficient value to justify continued listing of its
shares.  It had been waiting for proposals for such
justification, but had received no reply from the company.  
It announced yesterday it had put GKC into a "third stage
of de-listing procedures", under which GKC would be given
an additional six months to submit proposals to resume
share trading.  (South China Morning Post  20-Sep-1999)

ING BEIJING: Posts first-half loss                         
----------------------------------                       
Investment company ING Beijing has reported a net loss of
HK$3.48 million for the first half this year, compared with
a HK$11.82 million profit the previous period.

The company's turnover also dropped 25 per cent to HK$84.16
million.  ING Beijing said its loss for the period had been
mainly caused by the timber processing operation, which had
been affected by the devaluation of currencies in Southeast
Asia. However, the company said it expected its timber
processing operation would recover fully and return to
profit in the second half of the year.

In order to catch the technology investment trend, ING
Beijing said in yesterday's announcement that it planned to
bring the company's total investment in the technology
sector to more than 35 per cent of its invested portfolio.  
The company invested US$11 million in Skyworth, a company
specialising in the development and production of digital
audio and video equipment, which accounted for 18 per cent
of the company's investment portfolio.

At the end of June, the company's unaudited consolidated
net asset value per share was approximately HK$1.05,
compared with last Friday's close price of 39.5 HK cents.  
(South China Morning Post  20-Sep-1999)

LEADING SPIRIT HIGH-TECH: Share placement to reduce debts
---------------------------------------------------------
Debt-laden Leading Spirit (LS) High-Tech is raising $76.7
million by a combination of share placement, new share
issue and warrant placement to reduce debts and to fund
general operations, the firm announced yesterday.

The controlling shareholder of the electronic and
electrical product manufacturer, formerly known as Leading
Spirit (Holdings), Wong Shi-ling, has agreed to place 500
million ordinary shares at a price of 11 cents each to
independent third parties.  Mr Wong will subscribe to the
same number of new shares of LS High-Tech at the same
price.  The placing price represents a 21.43 per cent
discount to the closing price of the shares of 14 cents as
quoted on the stock exchange on Friday.

The new shares to be subscribed by Mr Wong are equivalent
to 5.14 per cent of the existing issued share capital and
4.89 per cent of that enlarged by the subscription.  After
the transaction of both the placement and the subscription,
Mr Wong would reduce his interest in the company to 38.38
per cent from 40.35 per cent.

LS High-Tech plans to use $18 million of the $53.3 million
net proceeds of the share subscription to settle bank
borrowings and the rest of it on working capitals, it said.
The subscription is subject to the approval of the listing
and trading of the new shares by the stock exchange.  The
company would place 840 million warrants at an initial
subscription price of 13 cents per share.

The exercise period of the warrants is about two years from
their date of issue to 11 October 2001.  The warrant
subscription price represents a discount of 7.14 per cent
to the closing price of 14 cents on Friday and a discount
of 5.11 per cent to the average closing price of 13.7 per
cent for the 10 trading days up to Friday.

The company will raise $23.4 million from the warrant
placement and use $4 million for repaying bank loans and
interest.  It will use the remainder as general working
capital.  As at 30 June last year, the company's total bank
borrowings stood at $526.6 million.  (Hong Kong Standard  
20-Sep-1999)

MUI HONG KONG: Posts first-half loss
------------------------------------
Travel services and properties group MUI Hong Kong slid
into the red as it posted a $19.13M attributable loss for
the six months to June 30, against a $17.06M profit for the
same period last year.  Turnover fell 17.47% to $388.94M.  
Loss per share was 2.55 cents, against per share earnings
of 0.8 cents a year ago.  No interim dividend will be paid.

SHOUGANG CONCORD: Posts first-half loss
---------------------------------------
Mainland industrial conglomerate Shougang Concord
International Enterprises went into the red with a net loss
of $231.8 million for the six months to 30 June. The group
made a net profit of $11.05 million in the same period last
year.

Turnover was $1,564 million, down 28 per cent year-on-year.
The decline was partly due to the group's withdrawal from
its direct involvement in the bulk carrier shipping
business.  The group reported an exceptional loss of $110.8
million on disposal of its interests in Shougang Technology
to another associated company, Shougang Concord Grand.
The group's performance was also affected by the results of
its associated companies.

"The prolonged effect of the Asian financial turmoil has
hindered the recovery of the steel market in the Southeast
Asian region," the group's managing director Su Genqiang
said.

Turnover at Shougang Concord Steel Holdings dropped 27 per
cent in the first half compared with a year earlier.
Firstlevel Holdings reported a 16 per cent decrease in its
turnover to $674 million for the same period as a result of
over-supply, sluggish demand and a price war in China's
metallurgical market. It did not give a profit figure.

Shougang Concord Century Holdings, too, reported a net loss
of $12.8 million for the same period, widening from a loss
of $3.8 million for the same period in 1998.  The company,
which engages in trading of manganese ore and ferroalloys,
continued to encounter difficult market conditions and a
substantial decrease in credit facilities during the period
under review.

The group's electrical and electronic product business as
well as its property investments continued to contribute
profits.  Shougang Concord Grand continued to provide
stable income and profit to the group. It reported a first-
half net profits of $11.8 million, up 2.6 per cent year-on-
year.  Shougang Technology recorded net profits of $17.9
million, rose by 18 per cent over the same period a year
ago.  (Hong Kong Standard  20-Sep-1999)


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

BANK BALI: Scandal here could be tip of the iceberg
---------------------------------------------------
Indonesia's US$67 billion (HK$522.6 billion) bank
restructuring program may become a casualty of a widening
corruption case, after the country's audit agency and
PricewaterhouseCoopers (PWC) said the Bank Bali political
pay-off scandal may be just one among several.

The head of the PWC investigating team testified before
parliament that he was told of 12 separate cases where
banks were approached with agreements similar to those
entered into by Bank Bali.

PWC, "recommends that additional investigations be
conducted to determine whether there was any loss of
government funds from such arrangements,' said John Wayne
Campbell. PricewaterhouseCoopers was appointed to
investigate the Bank Bali case.

The Bank Bali scandal, which has led international donors
to freeze much-needed aid, centres on a 546 billion rupiah
(HK$550 million) "fee" paid to an official of the ruling
Golkar party to help recover money from banks shut by the
state. Since the money was guaranteed by the government, no
fees should have been paid.

The money was allegedly intended to bribe delegates to vote
for B J Habibie in the election for president in November.
PWC's findings were corroborated by the Indonesian
Government audit agency.

"I am told that since the June 1 payment from Bank Bali,
much higher amounts have been paid out by other banks,"
Satrio Budihardjo Joedono, chairman of the state audit
agency, said. "Is anybody sure that these payments are free
from the modus operandi used in the Bank Bali case?"

The Bank Bali scandal has undermined confidence in
Indonesia's bank restructuring program by highlighting a
lack of openness at the Indonesian central bank in handling
the 550 trillion rupiah bank recapitalisation program.
According to PWC's audit, the payment from Bank Bali was
followed by an "explosion of financial transactions," that
ended up in the bank accounts of many high-ranking public
officials and party members. "About one hundred people
received that cash," it said.

Still, the investigation did not find where the money ended
up.  (Bloomberg, Hong Kong Standard  20-Sep-1999)


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

SAPPORO BREWERIES: To launch new beer to reduce debts
-----------------------------------------------------
Sapporo Breweries Ltd (TSE:2501) plans to launch a new beer
next year aimed at young people, in an attempt to reduce
interest-bearing debts by 120 billion yen (US$ 1.08
billion), company President Kenzo Edamoto said Thursday.

Also, Edamoto said, Sapporo has lowered its 2002 sales
target, to 96 million cases of beer from 100 million cases
(one case holds 20 633ml bottles).  The 2002 sales value
target has also been revised downward by 70 billion yen
to 550 billion yen.  However, the company has lifted its
2002 pretax profit target to 27 billion yen, up 3 billion
yen, made possible by various means, including a reduction
of interest-bearing debt to about 280 billion yen, from 400
billion yen at present.

The pretax profit rise will boost the return on equity
ratio to 10% in 2002 from the current 2.9%, Edamoto said.
The new beer for young people will be marketed as a
mainline product, comparable with Sapporo's popular Black
Label beer.

Edamoto also said the beermaker would forge ahead with
plans to integrate production facilities and close its
plant in Sapporo, Hokkaido.  He also suggested the firm's
Gunma Prefecture plant may close ahead of an earlier
scheduled 2002 shutdown.

"An increase in the numbers of those taking early
retirement at the plant may facilitate speedier closure,"
he said.  (Asia Pulse  17-Sep-1999)


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

DAEWOO GROUP: Gov't rejects foreign creditors' plea
---------------------------------------------------
The government's assurance on Daewoo Group's $10 billion
overseas liabilities is becoming a key issue for the
group's recovery from recent financial breakdown with the
financial authorities rejecting the demand the group's
foreign lenders.

According to a set of documents obtained by The Korea
Times, the government flatly declined the request made by
Daewoo's 240-plus foreign lenders, citing it is not
appropriate for the financial authorities to guarantee
loans offered in the private business circle. Included in
the documents were the correspondents exchanged between the
Financial Supervisory Commission (FSC) and Foreign Creditor
Steering Committee, recently formed to represent the
interests of Daewoo's overseas lenders.  

Oh Kap-soo, assistant governor of the FSC, wrote on Aug.
30, "It would be inappropriate for Korean financial
institutions to grant the requested guarantee (by Daewoo's
foreign creditors)."

The assistant governor added in the letter addressed to the
Chase Manhattan Bank, HSBC Holdings and Bank of Tokyo-
Mitsubishi, co-chairs of the committee, "We do not believe
that a guarantee that will shield them entirely from
commercial risk and transfer that risk to our banking
system or to the Korean government is the best or only way
to achieve this result."

The foreign creditors committee earlier presented to the
FSC a written proposal as to the terms for a possible
standstill on the part of the foreign creditors.  It stated
that all obligations of Daewoo companies would need to be
guaranteed by Korea's financial institutions in order to
ensure a standstill on the group's borrowings from the
international financial community.

Following a meeting with Daewoo's foreign advisors on Aug.
27, the steering committee reiterated in writing the need
for the government guarantee, adding that otherwise they
will be compelled to take legal actions to secure their
funds in the group.  Foreign creditors expressed during the
same position during the second meeting with Daewoo last
Wednesday.

During the second meeting with foreign creditors Daewoo
said that it will allow them to share 4 trillion won ($3.3
billion) worth of collateral with local banks.  But
steering committee did not accept the offer, requesting
Daewoo to come up with a detailed plan for dividing the
collateral among local and foreign creditors.  The
committee members added that their position on the
government guarantee remains unchanged.  (Korea Times  20-
Sep-1999)

HYUNDAI SECURITIES: Chair facing indictment, arrest
---------------------------------------------------
The Seoul District Prosecutor's office is due to announce
Tuesday the result of its investigation into the
manipulation of Hyundai Electronics stock prices, with
Hyundai Securities chair Lee Ik-chee also to be formally
indicted and arrested on the same day on charges of
violating Korean securities transaction laws.

The prosecutors will also indict without arrest three top
Hyundai executives who conspired with Lee to provide a
total of W220 in corporate funds for his plot. The three
are Hyundai Heavy Industries vice president Lee Young-ki,
Hyundai Merchant Marine president Kim Choong-shik and
Hyundai Electronics Executive Director Kang Suk-jin.
Lee Ik-chee was found to have persuaded the three
executives to channel the funds into the purchase of
Hyundai Electronics shares last March to improve the
operating profits of Hyundai Securities.

Lee was found to have directly ordered Park Chul-jae, a
managing director at his firm who is currently under
arrest, to execute the stock price manipulation. The
prosecutors have cleared Hyundai Electronics chair Chung
Mong-hun, Hyundai Heavy Industries chair Kim Hyung-byuk and
Hyundai Merchant Marine chair Park Se-yong of any
responsibility in the case.  (Digital ChosunIlbo  20-Sep-
1999)

KOREA FIRST BANK: Newbridge must keep stake at least 2 yrs.
-----------------------------------------------------------
Financial Supervisory Commis-sion (FSC) Chairman Lee Hun-
jai said yesterday Newbridge Capital will not be allowed to
sell the 51-percent stake in Korea First Bank, which it
will take over from the government, for the next two years.
Lee also said the introduction of market valuation of bonds
may be delayed from the originally scheduled July 1, 2000.

"We are reviewing a plan to delay the new valuation method
considering its potentially huge impact on financial
markets," Lee said.

Lee said that viewed from its past investment patterns,
Newbridge is likely to manage the bank for at least five to
six years.

"Since it can withdraw only when its investment is
recouped, it will do its best to make the bank profitable,"
Lee said.

He said the government persuaded the U.S. private equity
investment company to retain current staff and branch
network.

"Newbridge at first insisted on a staff readjustment but
accepted the government's request. But in the process of
restructuring, some adjustments will be inevitable," Lee
said.

The top financial regulator asserted that the sale of the
bank cannot be seen as a bad deal. Strongly denying that
the bank was sold at a bargain price, Lee said the seven
trillion won injection in public funds was needed
regardless of the progress of the sale, considering the
magnitude of the bank's bad debts.

"I believe we did our best under the given external and
internal circumstances," Lee said.

Criticism flared after the government finally sold off a
51-percent stake in Korea First for 500 billion won plus
guarantees on all loans going bad within the next two years
- nine months after sales negotiations began.  Lee said he
is confident of recouping six trillion won of the seven
trillion poured into the bank.

"I believe that the bank's stock price will soar 10 fold to
bring in some six trillion won, after the U.S. company
turns the bank around."

Meanwhile, Lee ruled out the possibility of an early
injection of public funds into Seoul Guarantee Insurance
Corp. which has been facing growing demands for interest
payments from holders of Daewoo-issued guaranteed bonds.
The insurer has been refusing to pay the interest in place
of investment trust companies because of its own liquidity
shortage.  Lee said public funds will be injected only
after the proportion of the interest burden that Daewoo
firms and the insurer can shoulder has been determined.
(Korea Herald  21-Sep-1999)

SAMSUNG MOTORS: Creditors pick managers of sale
-----------------------------------------------
Creditors of Samsung Motors Inc. have selected KPMG Peat
Marwick LLP and Paribas to manage the sale of the failed
carmaker, Samsung Group sources said on Saturday.

"With Samsung's decision to pay for the 2.8 trillion won
debt incurred by Samsung Motors, the largest obstacle has
been removed," an industry source said. "But now, the
problem will be over a suitable sales price."

Within this month, a committee representing the creditors
of Samsung Motors plans to seek the approval of other
creditor institutions over the selection.  Industry
watchers said Ford and Nissan motor companies, as well as
two to three other foreign carmakers have expressed
interest in acquiring Samsung Motors.

Earlier, Finance and Economy Minister Kang Bong-kyun said
the Samsung Group is in talks with two or three foreign
carmakers to sell off its troubled auto unit.

"Now that Samsung Motors' debt problem is resolved, it is
more desirable to use its plant rather than close it down,"
Kang said.

Samsung is negotiating with two foreign automakers and
contacting another for the sale of Samsung Motors, said Ha
Joo-ho, a public relations official at Samsung.

"Samsung is making efforts to sell off its auto unit for
the interests of the group and the Pusan economy," Ha said.

Lee Hak-soo, head of the group's restructuring task force,
told reporters earlier that responses from aspiring foreign
buyers of Samsung Motors' Pusan plant have been positive so
far.  He added that the biggest concern on the part of
foreign firms is Seoul's policy to restructure the local
auto industry into two players. Foreign carmakers want to
use Samsung Motors and its factory as a base for greater
access to the Asian market, Lee said.  (Korea Herald  20-
Sep-1999)


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

MONDRAGON INT'L PHILIPPINES: Stockholder meeting demanded
---------------------------------------------------------
A number of Mondragon International Philippines, Inc.'s
(MIPI) creditors and stockholders want the Securities and
Exchange Commission (SEC) to order the holding of the
company's annual stockholders meeting today.

In a petition filed late last Friday, MIPI creditors --
Asian Bank, Far East Bank, United Coconut Planters Bank --
and stockholders asked SEC to issue a temporary restraining
order barring MIPI's officers from deferring until November
15 the shareholders meeting scheduled today.  The petition
for a TRO was filed against MIPI chairman and chief
executive Jose Antonio Gonzalez, executive vice-president
and chief financial officer Faustino Roberto, Mondragon
vice-chairman and deputy chief executive officer Dulce
Saguisag, and the Mondragon Securities Corp., among others.

An SEC source said if the said meeting will proceed as
planned, three observers from the SEC -- Ysobel Yasay-
Morillo, Juanito Almosa, Benito Cataran -- will be assigned
to attend the meeting.  Although not confirmed, the MIPI
stockholders meeting was said to be put off by the group of
the incumbent officers to avoid the election of a new board
and to prevent the ouster of Mr. Gonzalez, the source said.

Since Mr. Gonzalez' shares in MIPI have been used as
collateral for the company's loans the chief executive's
voting rights are insufficient to get him back on the
company board, the source added.  Mr. Gonzalez cannot be
reached for comment.

Earlier, MIPI financial comptroller Pierre Paul S. Buhay
said "management deems it will be to the best interest of
all existing security holders if various issues that have
significant effect on the company's continuing operations
be resolved prior to the meeting."

These issues include the infusion of funds by a strategic
investor and the payment of 50 million Philippine pesos
(PhP) (US$1.2 million at PhP40.262:US$1) to Clark
Development Corp. (CDC) in compliance with the compromise
agreement entered by the two parties.  MIPI also wants to
reopen the casino and finalize plans with creditors before
holding the company's annual shareholders meeting, Mr.
Buhay told the Philippine Stock Exchange earlier.

Earlier, creditor banks junked proposals for MIPI to pay
loans in kind and chose not to extend any future loans to
the company. MIPI reported total debts of over PhP7 billion
(US$174 million), including payables to Bureau of Internal
Revenue, Philippine Amusement and Gaming Corp. and Clark
Development Corp.

The firm has loan exposures with Far East Bank, United
Coconut Planters' Bank, Metropolitan Bank & Trust Co.,
Philippine Banking Corp., TA Bank and Dao Heng Bank.  
(Business World  20-Sep-1999)

PHILIPPINE TEL. CORP.: Debt-restructure deal near
-------------------------------------------------
Pilipino Telephone Corp. (Piltel), the beleaguered cellular
phone company, and its creditor banks are expected to
finalize and conclude a debt restructuring agreement today.

Despite doubts from telecommunications industry analysts,
the country's largest telephone company, Philippine Long
Distance Telephone Co. (PLDT), sees its mobile phone
subsidiary getting back its health after a debt
restructuring is approved by creditor banks. Although PLDT
executive vice-president for corporate services Antonio R.
Samson said the approval of the debt restructuring will
allow Piltel to again compete in the marketplace, he
declined to confirm the signing, saying PLDT is bound by
the disclosure requirement of the Philippine Stock
Exchange.

"The debt restructuring, should it be finalized, will serve
as a breather for Piltel (as) most of its burden is debt
servicing," Mr. Samson told BusinessWorld in a telephone
interview.

Mr. Samson also said the terms of the agreement are
substantially the same as what has already been reported
earlier. Piltel is saddled with a 34.9-billion Philippine
peso (US$866.8 million at PhP40.262=US$1) debt it owes to
creditor banks, bondholders and Japanese supplier Marubeni
Corp.  But the creditor-banks reportedly want to charge
slightly higher interest rates on their loans pending a
final agreement, a BusinessWorld source from one of the
banks said.

The source said the banks want an interest rate equivalent
to the prevailing 91-day Treasury bill rate plus 2%, or a
notch higher than what is in the proposed rehabilitation
plan of 1% plus the benchmark T-bill rate.

"The (interest rate) adjustment will be temporary. Once the
restructuring (plan) is in place, it will go back to the
earlier agreed-upon interest rate. So far, Piltel has been
servicing interest," the source said.

Meanwhile, the source said there will be a "consensus
gathering" today, when creditor banks meet. "If banks agree
(on the proposed rehabilitation plan), they will sign."
"Except for the paperwork," everything is said to be over:
Creditor banks have already agreed in principle to the
rehabilitation plan. All will be signed or executed when
the agreement is perfected," the source added.

Under the proposed debt restructuring scheme, Tranche A or
one-half of Piltel's debts will be converted into Piltel
notes. One Piltel note will be exchanged for one PLDT
preferred stock or convertible note, which is convertible
to PLDT common stock. The notes will bear an interest of
1%, which will be payable annually.

Tranche B or 25% of the cellular company's obligations,
will have a 10-year repayment term and an interest rate of
1% plus the 91-day T-bill rate for peso loans and 1% plus
the three-month London interbank offered rate (LIBOR) for
dollar-denominated loans.  A balloon principal repayment
scheme will be adopted for Tranche B, wherein the principal
will be paid on the 10th year.  Tranche C, or the remaining
25%, will have a 15-year repayment term.

Payment of interest will be on a semiannual basis, but
there will be a four-year grace period on principal
payments. On the fifth year, 2% of the principal will be
paid. From years six to 14, an equivalent of 90% of the
principal will be paid, or 10% yearly. The remaining 8%
will be paid on the 15th year.

Meanwhile, a BusinessWorld source said more than a
majority, or more than 67%, have approved of the inter-
creditors agreement.  Under the inter-creditors agreement,
banks will not file any case against Piltel nor go after
any of its assets used as collateral while the
rehabilitation is in place.

"There will be no judicial proceedings, no liquidation and
no offsetting of deposits," another source earlier said.

Also, creditor banks which have deposits from Piltel cannot
take the deposits as substitute payment for the cellular
company's debts.  Mr. Samson said Piltel is banking on its
business recovery program to improve its operations. Mr.
Samson said that in terms of technology, Piltel has the
edge in the eventual migration of cellular companies into
the next-generation mobile communication standards, with
its US-developed digital technology called the code
division multiple access (CDMA).

He added the company will be helped by PLDT's foreign
strategic partner, Nippon Telegraph and Telephone Corp.
(NTT) of Japan.  NTT has spent around $10 billion for the
third-generation CDMA technology for its cellular arm NTT
Mobile Communications Network or NTT Docomo, said Mr.
Samson.  The popular mobile phone operators in the country
today, Globe Telecom GMCR, Inc. and Smart Communications,
Inc., use the European global system for mobile
communications (GSM) technology.

Asked to comment on the case set to be filed by supplier
Marubeni with the Supreme Court for the Mindanao telephone
lines, Mr. Samson said the Japanese sogo shosha need not
file a case.  Marubeni was reported to be appealing to the
Supreme Court to declare it the sole and legal owner of
materials, equipment and assets for the telephone lines it
installed for Piltel in Mindanao. It wants to take over the
assets to be able to declare losses as a result of the
financial crisis and eventually ask financial assistance
from the Obuchi Fund.  The fund provides loans to
financially distressed firms at concessional rates.

"Technically, Marubeni owns the Piltel Mindanao lines since
the company has not accepted the project yet," Mr. Samson
said.  He admitted that availing of the Obuchi Fund was an
option, at one point, for Piltel to refinance the Marubeni
loans. "Perhaps they need to file a case to avail of that
fund," said Mr. Samson.  (Business World  20-Sep-1999)


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

EASTERN STAR REAL ESTATE: Expects rehab plan by year-end
--------------------------------------------------------
Eastern Star Real Estate Plc (Eastar), a leading property
developer in the Eastern Seaboard area, expects to complete
its Bt700-million debt restructuring plan with its three
major creditors later this year.

The company's Managing Director William Cheng said the
company would approach a new strategic partner to
strengthen its operation once the debt restructuring's
effort had been approved.  Cheng said the Bt700 million
debt is a portion of the company's outstanding principal
debt of Bt1 billion, which the company owes to National
Finance Plc, BankThai and GE Capital Co Ltd.

The company's debt restructuring largely involved the
conversion of debt into assets because it did not have
enough cashflow to repay the arrears, he said.  The
property developer currently possessed 1,000 rai of vacant
land plots and if the asset swap was accepted by the
creditors, around 30-40 per cent of the land would remain
in the possession of the company, sufficient for operations
over the next two-three years, he said.

Both creditors and the company would benefit from the
asset-swap method because Eastar would no longer be holding
on to land that wasn't being developed, while the creditors
could garner healthy profits from selling the land at a
higher price than it is currently worth as the economic
recovery lifted prices.

"We think that negotiations should be completed before the
end of the year after already having spent six to seven
months discussing matters with the creditors.  Now its up
to them [the creditors] to start reducing their non-
performing loans (NPLs) to help our recapitalisation
plans," he said.

Regarding the remaining Bt300 million principal debt, the
company plans to tackle the problem early next year.  In
1998, Eastar entered into the debt restructuring process
and managed successfully to restructure two outstanding
debts of Bt12 million and Bt129 million with Thai Farmers
Bank and Book Club Finance Plc respectively. Both deals
were asset swaps.

The new strategic partner could be foreign, with Cheng
saying that three overseas investors had expressed an
interest in forming an alliance with the company. However,
all of them confirmed that Eastar had to complete its debt
restructuring plan first, he added.

"They want their funds to finance a working business, not
repay debts," he said, adding that the alliance might be
made through either a joint-venture or a share-purchase
scheme.

Sunrise Properties Co Ltd of Singapore and its affiliates
own a combined stake of 40 per cent in Eastar.  Struggling
to make ends meet, the company posted a net loss of Bt229
million for the first six months of this year, up from the
Bt220 million net loss over the same period last year.
He expected that the company would return to profit after
the debt restructuring was completed because its current
net loss was mainly incurred from interest payment.

Eastar's monthly revenue of around Bt6-7 million, comes
from its golf courses, condominium management and renting
out houses.  Meanwhile, Cheng remains confident that the
company will be able to sell 20-30 residential houses worth
Bt50-60 million in the last quarter of the year.  (The
Nation  20-Sep-1999)

TELECOMASIA CORP.: Agreement reached on rehab plan
--------------------------------------------------
Debt-ridden TelecomAsia Corporation Plc (TA) has reached an
agreement with its creditors over the key points of the
company's Bt85-billion debt-restructuring plan, with a
memorandum of understanding expected to be signed later
this month after more than one year of protracted
negotiations.

A source close to the creditors said either creditor banks
or creditor suppliers had agreed in principle to the plan
and would hold a final meeting tomorrow to consider the
details before making a decision.  The most recent
development in the TA saga has seen one of its major
creditors, the German export-credit agency Kreditanstalt
fur Wiederaufbau (KfW), agree to acquire an equity stake in
TelecomAsia, effectively making US$150 million of fresh
funds available.

"KfW's decision to buy the stake has given the stalled
talks a kick start and is a clear sign of a step in the
right direction towards finalising a restructuring plan,"
the source said but declined to elaborate the size of stake
TA would sell to KfW.

The source said KfW had decided to pump funds into TA
instead of converting its debt to equity because the German
bank still felt that TelecomAsia had growth potential, as
fixed lines remained a crucial part of the country's
infrastructure as the economy recovered and developed.
In addition, since the economic crisis took hold, TA's
revenues have declined to the point where it cannot afford
to repay its debts, the source said, adding that the fresh
funds would enable the operator of 1.5 million telephone
lines in Bangkok to recover much more quickly.

In April 1998 TA announced that it would raise its
registered capital from Bt22.3 billion to Bt30 billion by
offering new shares to existing shareholders and interested
investors through a private placement.  However, the
recapitalisation plan failed to materialise as debts
spiralled, the weak baht decimated earnings and consumers
cut down on call spending.

The company then appointed PricewaterhouseCoopers as its
financial adviser to come up with a new debt-restructuring
plan.  According to the plan, the source said, the creditor
banks have agreed to reschedule debt payments over a grace
period but refused a haircut. In contrast, supplier
creditors including AT&T, Mitsui, Tomen and NEC all backed
the haircut option.

A major problem for TA is the Personal Communication
Telephone (PCT) project, which requires the company to pay
NEC for the installation of the system as soon as it is
operating. TA has tried to convince the Japanese firm to
convert some debt to equity, but the supplier refused to
agree to the idea.

According to its 1998 annual report, the fixed-line
operator shouldered total debts of Bt85.346 billion, most
of which were 10-year long-term loans. Total foreign debts
stood at Bt44.66 billion, representing 52 per cent of the
total debt.  Recent reports indicated that TA had run up
$200 million in debt incurred from a cordless-phone
project.

Krung Thai Bank (KTB) is the largest Thai creditor with
debts of Bt3.3 billion, followed by Bangkok Bank (BBL) with
Bt2.9 billion, Siam Commercial Bank (SCB) and Thai Farmers
Bank (TFB) in that order.  In the first half of this year
the number of TA subscribers started to rise markedly, as
evidenced by a 40,000-strong increase in net subscribers,
bringing the number of the company's subscribers to 1.35
million.

Each subscriber is reported to be spending an average of
Bt680 per line, compared with Bt600 last year.  However,
the first six months did see TA post a loss of Bt1 billion
against a Bt8.43-billion net profit over the same period a
year previously.  Bolstered by the latest developments,
TA's share price had increased Bt0.75 to Bt34.75 by
Friday's close.  (The Nation  20-Sep-1999)

THAI MODERN PLASTIC INDUSTRY: SEC probing for more evidence
-----------------------------------------------------------
THE Securities and Exchange Commission (SEC) is gathering
more evidence against some executives of Thai Modern
Plastic Industry Plc (TM) in an embezzlement case, after
available evidence could not convince the state attorney to
prosecute, according to a source at the agency.

The source admitted that it is an ordeal to find evidence
to support the SEC's accusation, but the job needs to be
done as the evidence in hand already indicates that some
executives of the company embezzled money and made wrong
statements to the Economic Crime Suppression Unit.

"We won't prove if the statements are wrong, but we'll
focus our second-round investigation on the money. Where is
it now? Was it siphoned," said the source.

In June 1998, the securities watchdog charged TM with
making wrong statements to the police unit. The state
attorney did not give the SEC any answer why the case was
not prosecuted, the source said, adding that the SEC is now
discussing prosecution guidelines with the state attorney.
The SEC is encouraged to further the investigation into
complaints made by 32 creditors of the Thai company.

Moreover, it also wants to prove that the evidence in hand
is supporting the case.  The SEC's first-round
investigation was conducted upon complaints by some
creditors claiming that the Thai company doctored the 1996
financial statements to convince creditors of its ability
to pay.

The figures presented to the creditors then stated that the
company's liquidity was sufficient for loan repayments.
However, shortly after that the company failed to repay
loans, showing that the figures in the financial statements
did not reflect the real financial position of TM.
Moreover, the company statement showed that its total debt
burden was Bt1 billion. However, based on the result of an
SEC inquiry, 32 creditors noted that the company's combined
debts were around Bt4 billion. That shows the company's
executives used some money for other purposes and embezzled
some, the source said.

TM is under a delisting process, and it is now listed in
the rehabilitation sector.  According to the Stock Exchange
of Thailand's (SET) regulations, companies with negative
shareholders' equity must be rehabilitated to remain on the
bourse.  The SEC source noted that if TM is delisted before
the prosecution begins, there is a good chance for the
securities watchdog to punish the wrongdoers because they
committed crimes when TM was a listed company.

"The SEC is really frustrated. Though it has clear evidence
of malpractices, no wrongdoer has been punished. This is a
result of a weak legal framework and lack of knowledge
among those handling economic crimes," the source said.

Patareeya Benjapolchai, senior vice president of the SET,
said last week that it is impossible for the stock exchange
to delist the company because the rehabilitation plan
proposed by TM's creditors has already received court
approval under the amended bankruptcy law.

"That shows the company is still able to finance its debt
burden and continue business," she said.

However, she added that the stock exchange fined high-
placed executives of the company, accounting officers and
other executives. The executives have also been
blacklisted, making them unable to serve any listed
company, she said.  (The Nation  20-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

Troubled Company Reporter -- Asia Pacific is a daily
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