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    T R O U B L E D   C O M P A N Y   R E P O R T E R

                      A S I A   P A C I F I C

               Friday, October 15, 1999, Vol. 2, No. 201

                            Headlines


* C H I N A  &  H O N G  K O N G *

CHI CHEUNG INVESTMENT: Posts narrower first-half loss


* J A P A N *

SEIYU: Posts first-half loss


* K O R E A *

DAEWOO GROUP: Foreign creditors may get concession
DAEWOO MOTORS: GM still displaying interest
SAMSUNG MOTORS: GM denies interest in or talks on


* M A L A Y S I A *

SUNWAY CITY: Selling asset stake for debt paydown


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

MONDRAGON INT'L PHILIPPINES: PAGCOR denies opening again


* T H A I L A N D *

THAI TEL.&TEL.: To submit rehab plan end of next week


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

CHI CHEUNG INVESTMENT: Posts narrower first-half loss
-----------------------------------------------------
Chi Cheung Investment saw its losses cut to $84.21M for the
six months to June 30 from $316.3M for the same period last
year.  Loses per share were 26 cents, compared with $1.02
previously.  No interim dividend was recommended.


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

SEIYU: Posts first-half loss
----------------------------
Japan's Seiyu, a major supermarket chain, said yesterday it
fell into the red in the six months to August, blaming a
fall in prices and tough competition.

Seiyu, the country's fifth largest supermarket operator,
took a 10.4B yen parent net loss in the half, against a
942M yen profit last year.  The firm said a major
restructuring programme, which involved the closure of four
branches, also added to the loss.  Pre-tax profit was down
8.6% at 5.7B yen, with sales off 7.7% at 448.1B yen.  For
the full year to next February Seiyu forecast it would be
stuck in the red with a 20 B yen parent net loss, worse
than last year's 14B yen loss.


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

DAEWOO GROUP: Foreign creditors may get concession
--------------------------------------------------
The government is expected to propose allowing foreign
creditors of the ailing Daewoo Group a key say in the
process of finalizing the conglomerate's workout
restructuring plan.

"We are considering granting them a partial veto on the
terms and conditions of the workout," said a senior
official of the Ministry of Finance and Economy (MOFE)
yesterday, adding that they will also be privy to the same
information as domestic creditors involved in the Daewoo
workout process.

The official said that the foreign creditors will likely be
able to exercise partial veto rights on Daewoo Corp. and
Daewoo Heavy Industries to which their exposure is sizable,
albeit not reaching one fourth.  The 200 plus foreign
creditors hold about 13 percent of an approximate $50
billion of Daewoo's overall debts.

The MOFE's consideration is seen as an attempt to prevent
their minority opinion from being overruled by domestic
creditors, who hold over $40 billion worth of the total
debts, in case a simple majority decision is adopted.
Due diligence is under way on the assets of Daewoo, the
second largest chaebol in Korea, in the absence of foreign
creditors who refused to participate, according to MOFE
officials.

The domestic creditor banks are scheduled to come up with a
preliminary workout plan by Nov. 6. But the final workout
plan will be completed later through consultations with
foreign creditors.

"We are also considering other devices ensuring them a say
in the process, in the spirit of fair treatment between
Daewoo's domestic and foreign creditors," the official
said.

He observed that the foreign banks have moderated their
vocal demands for the assurances by the government of the
repayment of their loans as a result of their joint efforts
to find common ground.  Appraising that the Daewoo workout
is being implemented rapidly, he said that any new
information regarding the workout will be shared on an
equal footing between foreign and domestic creditors, while
the government will reflect their opinions while the
workout is in progress, through a weekly coordination
meeting of their steering committee and Korean financial
authorities.

"I will not throw good money after bad to save Daewoo
affiliates that are deemed to have no chance of recovery,"
he said, explaining that a business plan is being drawn up,
conducting due diligence by five auditors and determining
the potential value of Daewoo affiliates, should they be
kept in operation.  (Korea Times  14-Oct-1999)

DAEWOO MOTORS: GM still displaying interest
-------------------------------------------
US auto giant General Motors said yesterday it had "a firm
interest" in forging an alliance with South Korea's
embattled Daewoo Motors.

"Options are open on all possibilities, such as joint
ventures, strategic alliances and stake participation," a
GM representative said.

A 20-member GM delegation, headed by vice president Louis
Hughes, plans to meet Daewoo officials "either today or
tomorrow," he said.  GM officials have surveyed Daewoo's
assets and debts since the two companies signed an in-
principle agreement on August 6 on a strategic alliance.
"We have not started negotiations with Daewoo yet. Any
talks on pricing and terms will follow the result of Korea
Development Bank's due diligence on Daewoo," he said.

Creditor banks, led by the state-financed Korea Development
Bank, have been engaged in the painstaking task of
uncovering and evaluating the murky debt situation of
Daewoo Motor, a process due to be wrapped up by November 6.
It will be only after the final outcome of the survey
becomes available that financial authorities and creditor
banks will decide how to rescue Daewoo Motor and other
Daewoo units, the spokesman of the ministry said.

But newspapers speculated that Daewoo Motors could be
nationalized for debt-equity swaps, debt reductions and a
capital write-down before being sold off.  The sinking
Daewoo Group, burdened with an estimated US$60 billion in
debt, has proposed a strategic alliance with GM since it
was placed under an emergency debt rehabilitation program
in August to avert bankruptcy.

But there has been little progress as GM wanted to buy
only Daewoo's best assets at home and in Poland.
Analysts said Daewoo Motor's sale could be delayed because
of its worsening balance sheets.

"Daewoo's problems are not the kind ... to be resolved
within a short period. It will take a long time to conduct
due diligence and for acquirers to arrive at a price," an
analyst said.  "Daewoo Motors has been lagging behind at
home and abroad, except for the mini car model, Matiz," he
said, citing the company's heavy discounting and promotions
involving extended-term installment purchases.

He warned there may be "big problems" with capital
structure, with Daewoo Motors appearing to underemploy its
capital relative to sales.  After a series of
consolidations, its capital has soared to four trillion won
(US$3.32 billion) from 500 billion won, with sales expected
at 10 trillion won this year, he said.

"The more the government hurries to sell Daewoo Motors, the
more troubles will appear, such as hidden losses, to stall
the sale talks with GM," the analyst added. "GM knows it
has the upper hand in negotiations and is ready to drag its
feet and call for a lower price or some other
compensation."  (Business Day  14-Oct-1999)

SAMSUNG MOTORS: GM denies interest in or talks on
-------------------------------------------------
General Motors of the United States has terminated the
possibility of negotiations for the purchase of Samsung
Motors after local media reports of a possible deal sent
the price of the American automaker's stocks down on U.S.
markets.

Samsung officials said Thursday that GM terminated the
talks as soon as reports appeared in local media outlets on
the the possibility of a takeover of the ailing Korean
automaker by the American auto giant. Meanwhile, GM Korea
managing director Lee Ji-suk said the same day that a
visiting GM delegation from the U.S. has been devoting all
its time to negotiations for the takeover of Daewoo Motor,
and that GM has never considered a bid take over either
Samsung Motor or Ssangyong Motor.

An official at GM Korea had said Wednesday that the firm's
position remained open regarding its role in the
realignment of Korea's auto industry and that his company
would be willing to consider the takeover of Samsung Motors
if the conditions were similar to terms offered by Daewoo.

The overnight reversal of GM's position was likely prompted
by displeasure at company headquarters over Korean news
coverage of a possible deal with Samsung. A high-ranking
government official said that with media reporting that GM
was considering taking over Samsung Motors, GM shares fell
on U.S. stock markets. The official went on to say that
because of such media reports, the GM delegation in Korea
has decided to discontinue communications with Samsung.
(Digital ChosunIlbo  14-Oct-1999, Korea Herald  15-Oct-
1999)


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

SUNWAY CITY: Selling asset stake for debt paydown          
-------------------------------------------------       
Sunway City Bhd (Suncity) has proposed to cut the group's
bank borrowings and long-term liabilities by raising
RM362mil via a restructuring exercise. The proposed
restructuring, it said, would result in the entry of the
Government of Singapore Investment Corporation Pte Ltd
(GIC) as a strategic partner of the Suncity group.

Suncity said it is selling a stake and part of one of the
nation's largest shopping malls to the GIC for RM362
million (S$160 million), to raise funds to repay debt.
Suncity will sell 40 million new shares, or an 11.8 per
cent stake in itself, to GIC Real Estate, a unit of GIC,
for RM72 million, or RM1.80 each.  GIC manages the foreign
exchange reserves for the Singapore Government.  It will
also sell RM108 million worth of preference shares to GIC
that can be converted into 25 per cent of Sunway stock
after three years. That will boost GIC's stake to 37 per
cent.

Companies such as Sunway City are still hurting from last
year's recession that dried up demand and boosted borrowing
costs. They are selling assets to repay debt.  The
recession has had "an adverse impact on" Sunway, the
company said. "The advent of GIC as a strategic partner"
will help "strengthen" the group.

Under the plan, GIC will also inject RM182 million into
Sunway Pyramid, a unit of Sunway. In return, GIC will own
48 per cent of Sunway Pyramid, which owns a shopping mall
with a built-up area of 2.5 million gross sq ft.  Suncity
will also pump in RM209.8 million into Sunway Pyramid as
part of a "re-capitalisation" effort.  Trading of Sunway
shares was suspended on Tuesday. They last traded at
RM1.83, up 8.9 per cent.  (Bloomberg News, Straits Times,
Star Online  14-Oct-1999)  


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

MONDRAGON INT'L PHILIPPINES: PAGCOR denies opening again
--------------------------------------------------------
The Philippine Amusement and Gaming Corp. (Pagcor) is firm
on its decision to keep the Mimosa Regency Casino in Clark
Field, Pampanga closed. It rejected anew the proposal
submitted by operator Mondragon International Philippines,
Inc. (MIPI) to reopen the casino and split its net earnings
-- with the government taking the majority share.

"They must make payment first before we could accept any
proposal," Pagcor president Reynaldo Tenorio said in an
interview with reporters.

He also reiterated that MIPI's permit to operate the casino
has been cancelled by the gaming regulatory agency as early
as April last year. The casino has been shuttered for more
than 10 months.  Pagcor alleged that MIPI committed gaming
irregularities such as poaching or inducement of players at
the casino.

"We are waiting for the writ of execution. They will have
to apply for a new license," he said.

It appears that the Office of the President has given its
blessings on Pagcor's move.  Executive Secretary Ronaldo
Zamora said the Mondragon case "is not an issue that we
(the Office of the President) will have to decide by
ourselves and Pagcor will have to be consulted."

"We are interested in having it opened because there have
been lots of jobs lost. But unless the dispute is settled,
we do not see its reopening," Mr. Zamora said.

MIPI owes Pagcor some 120 million Philippine pesos (US$2.97
million at PhP40.321:US$1); Clark Development Corp. (CDC),
PhP325 million (US$8.06 million); and the Bureau of
Internal Revenue, PhP40 million (US$992,000).  CDC is now
awaiting a ruling from the Angeles Regional Trial Court to
determine whether it could formally take over the Mimosa
property after MIPI was not able to pay PhP50 million
(US$1.24 million) in August.

The amount was supposed to represent the first of six
scheduled payments for Mondragon's PhP325-million loan.
MIPI has been on the lookout for a strategic investor who
will put in $175 million in exchange for a 40% stake in the
company. Several investors, including Macau casino tycoon
Stanley Ho and the George Roman Group of Canada, have
reportedly taken a look at Mimosa.

Pending the entry of an investor, the Gonzalez group is
moving to finalize a deal with a California-based trust
company for bridge financing.  The company is considering a
$200-million loan with a 7% yearly interest with a
repayment period of 20 years.  (Business World  14-Oct-
1999)


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

THAI TEL.&TEL.: To submit rehab plan end of next week
-----------------------------------------------------
Thai Telephone & Telecommunication Plc (TT&T) has moved to
the final stage of restructuring its 39 billion baht debt
and will submit a plan to its 45 creditors on October 22.
TT&T's financial consultant, Kensington of the United
States, is now drafting a list of main points requiring
negotiation between creditors and TT&T.  The company began
the move to restructure its debt in the middle of last year
and talks have continued since then.

Witit Sujjapong, executive vice-president, finance and
accounting department, said he expected that the company
and its creditors would start final negotiations late this
month.  All key points for negotiation would be agreed on
by both sides next month and then the debt restructuring
programme would be approved by creditors around the middle
of December.  Mr Witit refused to elaborate further on the
key points still under negotiation, but said that they
involved TT&T's ability to repay its debt.

Analysts said the negotiations would focus on interest
reduction, payment rescheduling and the conversion of debts
to equity.  Mr Witit said the company earns revenue of
about 400 million baht a month and its operating costs are
about 200 million baht.  Analysts said if the repayment of
loan principal and interest was higher than 200 million
baht a month, the company would not be in a position to
service its debt.

TT&T is a concessionaire in developing and operating 1.5
million fixed telephone lines in the provinces. Under its
concession granted by the Telephone Organisation of
Thailand (TOT), the company has to share 43% of revenue to
the state agency.  Industry analysts say the percentage is
unrealistically high, making the project not viable.
TT&T has defaulted on debt repayments since mid-1998.
Its loans consist of 21 billion baht and the rest is in
foreign currencies.

The company pays 200 million baht per month as interest on
15 billion baht owed to secured creditors.  However, no
payments are made on 25 billion baht owed to unsecured
lenders.  TT&T has five major shareholders-Jasmine
International Plc, Nippon Telegraph and Telephone West
Corp, Loxley Plc, Italian-Thai Development Plc and Phatra
Thanakit.

However, two of the major shareholders are under
investigation by the Securities and Exchange Commission
over allegations of insider trading.  In June, the
company's share price rose sharply following claims by one
of Shin Corporations' top executives that the company had a
plan to form a business alliance with a fixed line
operator, and that TT&T was one of the possible targets.
But TT&T management said later that the move was unilateral
by Shin, without the knowledge of TT&T executives and the
board of directors.

A month later, Shin unilaterally terminated the deal,
saying it had made no progress.  However, the SEC
discovered that two of TT&T's major shareholders had sold
part of their holdings during the crucial period. It is now
investigating whether their sale was linked to the merger
deal.  (Bangkok Post  14-Oct-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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