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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, October 19, 1999, Vol. 2, No. 203

                            Headlines


* C H I N A  &  H O N G  K O N G *

COURAGE DEVELOPMENT CO.: Facing petition for winding up
DARK HORSE PUBLICATION: Facing petition for winding up
DESIGN 83 ADVERTISING CO.: Facing petition for winding up
GALAXY ELECTRO-PLATING FACTORY: Facing winding up petition
HANG LEE JEWELLERY COMPANY: Facing winding up petition
JJ AND S LIMITED: Facing petition for winding up
JOINT-EFFORT ENGINEERING CO.: Facing winding up petition
SHEEN HONOUR ENTERPRISES: Facing petition for winding up
STRENGTH GARMENT FACTORY: Facing petition for winding up


* J A P A N *

CREDIT SUISSE: Facing penalties for obstruction
NISSAN MOTOR CO.: Launching major restructuring


* K O R E A *

DAEHAN INVESTMENT: Subject of FSC probe
DAEWOO ELECTRONICS: Creditors not relying on U.S. purchaser
DAEWOO GROUP: Foreign creditors to accept some losses
DAEWOO GROUP: FSC hints at sales to domestic chaebol groups
DAEWOO HEAVY INDUSTRIES: More assets found
HAEDONG INSURANCE: Regent Pacific signs MOU to take over
HAITAI BEVERAGE: Creditor bank cancels sale
SK GROUP: Subject of FSC probe


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

CALTEX PHILIPPINES: 3rd quarter losses reach $7.45 million


* T H A I L A N D *

KANJANAPAS FAMILY: Debt quagmire growing
MEC FAR EAST INT'L.: To be delisted
SAMART COMMUNICATION SVC.: Secures roll-over agreement


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

COURAGE DEVELOPMENT CO.: Facing petition for winding up
-------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
December 1 on the petition of Lee Hing Bong and Wong Chin
Pang for the winding up of Courage Development (HK) Company
Limited. A notice of legal appearance must be filed on or
before November 30.

DARK HORSE PUBLICATION: Facing petition for winding up
------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
November 3 on the petition of Wu Man Kwong for the winding
up of Dark Horse Publication (HK) Limited. A notice of
legal appearance must be filed on or before November 2.

DESIGN 83 ADVERTISING CO.: Facing petition for winding up
---------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
December 22 on the petition of Leung Hin Tak for the
winding up of Design 83 Advertising Company Limited. A
notice of legal appearance must be filed on or before
December 21.

GALAXY ELECTRO-PLATING FACTORY: Facing winding up petition
----------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
December 1 on the petition of Cheong Hing Refinery Works
Limited for the winding up of Galaxy Electro-Plating
Factory Limited. A notice of legal appearance must be filed
on or before November 30.

HANG LEE JEWELLERY COMPANY: Facing winding up petition
------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
November 3 on the petition of Chow Tai Fook Jewellery
Company Limited for the winding up of Hang Lee Jewellery
Company Limited. A notice of legal appearance must be filed
on or before November 2.

JJ AND S LIMITED: Facing petition for winding up
------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
December 22 on the petition of Liu Kit Kai for the winding
up of JJ and S Limited. A notice of legal appearance must
be filed on or before December 21.

JOINT-EFFORT ENGINEERING CO.: Facing winding up petition
--------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
December 1 on the petition of Wong Man Yee, Wing Hei House,
Po Hei Court, Ho Wing Keung, Koon Yat House, Choi Wan
Estate, Kowloon and Lau Wai Man, Sai Ying Pun for the
winding up of Joint-Effort Engineering Company Limited. A
notice of legal appearance must be filed on or before
November 30.

SHEEN HONOUR ENTERPRISES: Facing petition for winding up
--------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
October 27 on the petition of Sheen Honour Enterprises
Limited for its winding up. A notice of legal appearance
must be filed on or before October 26.

STRENGTH GARMENT FACTORY: Facing petition for winding up
--------------------------------------------------------
The High Court of Hong Kong SAR has scheduled a hearing for
December 15 on the petition of Chow Po Lin for the winding
up of Strength Garment Factory Limited. A notice of legal
appearance must be filed on or before December 14.


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

CREDIT SUISSE: Facing penalties for obstruction
-----------------------------------------------
A Japanese unit of financial group Credit Suisse
could face penalties of up to 200 million yen ($1.87
million) for obstructing an earlier inspection by
regulators, lawyers said on Friday.

Japanese police raided the Tokyo branch of Credit Suisse
Financial Products (CSFP) on Thursday on suspicion it
obstructed an inspection by an industry watchdog, the
Financial Supervisory Agency (FSA), in January. If police
indict any employees at CSFP for obstructing inspections
they could face up to a year in jail or a fine of up three
million yen, the lawyers at the Japan Federation of Bar
Associations told Reuters.

Police declined to comment on details of the investigation
of CSFP, which is the first foreign bank in memory to be
raided by Japanese police for suspected criminal activity.
CSFP's Tokyo branch is suspected of instructing employees
to shred transaction documents and erase e-mail records
before the FSA's earlier inspection.  

A Credit Suisse spokesman in Tokyo said on Thursday that
some employees had taken it into their own hands to shred
documents, thinking they were covering up potential fire-
wall violations, and that the company itself had not been
involved on an organisational basis. Financial regulators
said in late July they would revoke the banking license of
CSFP by the end of November for obstructing investigations
and offering inappropriate products to clients.

Japanese media reports said on Friday the raid by police
was seeking clues on whether or how the CS group outside of
Japan engaged in the suspected crime on an organisational
basis.  The Credit Suisse spokesman said on Thursday that
the firm had informed Japanese financial regulators of its
employees' actions, commissioned a report into the incident
and made a public apology to Japan and the FSA in May, and
that CSFP was losing its licence.

The FSA had been looking into whether CS Group firms in
Tokyo engaged in any inappropriate transactions to help
clients conceal losses by bouncing them from one account to
another, possibly using derivatives transactions.  
(Reuters, NewsHound  15-Oct-1999)

NISSAN MOTOR CO.: Launching major restructuring
-----------------------------------------------
Japan's Nissan Motor has unveiled an unprecedented
restructuring plan, promising to shut down five plants and
cut 21,000 jobs in a dramatic effort to grapple with huge
losses.

"Nissan is in bad shape," said the company's new number
two, senior Renault SA executive Carlos Ghosn, who earned
himself the nickname of "le cost-killer" in France.
"We have to make sure we do not carry too much capacity
compared with what we will produce in the foreseeable
future," he told a news conference in revealing the Nissan
Revival Plan. "We cannot afford to come up with a soft
solution. We have to have a drastic solution," Mr Ghosn
added.

Nissan was making provisions for an extraordinary loss in
the current fiscal year to next March of 200 billion yen
(HK$14.4 billion), Mr Ghosn said, but it expected to be
profitable in the following year.  Debt would be cut in
half to 700 billion yen by March 2003, he promised.
Nissan's future was secured earlier this year when France's
Renault SA took a controlling stake in the firm and
promised to revive the second largest Japanese carmaker.

"I believe I am not overstating the situation when I say
that today is the most important day for the future of
Nissan," Nissan chief executive Yoshikazu Hanawa told the
news conference.  "We are looking forward because the pace
of change will not be kind to us if we can only look to the
past," he added.  "This plan is perhaps even severe, but
then our situation is severe."

Production will be cut 30 per cent to 1.65 million cars a
year by March 2002 from the current 2.4 million cars, Mr
Ghosn said. Three car assembly plants and two power-train
plants would be closed. Power-trains transfer power from
the engine to the axles.  A total of 21,000 jobs, or 14 per
cent of Nissan's total workforce, would go by March 2002,
through job cuts and early retirement.

The staff cuts would include 4,000 jobs from manufacturers,
6,500 from dealerships and 6,000 from sales, general and
administrative staff.  Factories to be closed by March 2001
were Tokyo's Murayama plant which employs 3,100 people,
Kyoto's Nissan Shatai Kyoto plant with a staff of 1,200 and
Nagoya's Aichi Kikai Minato plant with 916 employees, Mr
Ghosn said.

Nissan would close the two power-train plants by March 2002  
in Kurihama, south of Tokyo, and in the Kyushu Unit plant
in Japan's southernmost island, he said. A new head of
design would rework the brand image for Nissan, which had a
global market share of 4.9 per cent now compared to 6.6 per
cent in 1991, the Nissan executive said.

"Our sincere dream is Nissan will be a major player of the
world by achieving the target," Mr Ghosn said, speaking
slowly in Japanese. "I am sure that all the Nissan
employees will share the view and make an effort."

The carmaker will centralise parts procurement immediately
and halve the number of suppliers by March 2002 to just
600. Lead time for car production would also be cut.
Asked about the number of suppliers being cut, Mr Ghosn
said Nissan would "help those who help us," adding, "Speed
is of the essence for us."

He promised a significant increase in Nissan's presence in
South America, especially in Brazil and Argentina. The
company planned to set up a sales finance company in
Mexico.  (Hong Kong Standard  18-Oct-1999)


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

DAEHAN INVESTMENT: Subject of FSC probe
SK GROUP: Subject of FSC probe
---------------------------------------
The Financial Supervisory Service has launched probes into
SK's financial affiliates and Daehan Investment Trust.
The SK Group firms include SK Securities, SK Investment
Trust Management and SK Life Insurance.
The probe, which will continue until the end of this month,
is designed to ascertain whether these firms provided
illegal funding to weak sister firms, or were involved in
cross-funding schemes with other chaebol groups, or
transferred Daewoo bonds from one trust account to another.
The financial watchdog has already completed investigations
into financial units of the LG, Samsung and Hyundai Groups,
with a probe of Daewoo firms slated to begin next month.

The probe into Daehan Investment Trust will focus on
unauthorized transfers of Daewoo bonds and the illegal
purchase of speculation-grade corporate bonds on money
market funds (MMF) accounts.  The agency is also
undertaking a probe into Citibank and expects the
investigation to wind up Oct. 27.  (Korea Herald  19-Oct-
1999)

DAEWOO ELECTRONICS: Creditors not relying on U.S. purchaser
-----------------------------------------------------------
An official at Hanvit Bank said yesterday that creditors of
Daewoo Electronics are not pinning their hopes on
negotiations with Walid Alomar & Associates for the sale of
the electronics firm.

The official said the bank has received no response from
the U.S. investment fund to its request for information on
the fund's efforts to attract investors for its plan to
purchase part of Daewoo's assets for $3.2 billion.  Hanvit
is the main creditor bank of Daewoo Electronics.

"We do not place much importance on the negotiations with
Walid Alomar. We will focus on the debt workout plan for
the company," the official said.

Hanvit plans to finalize a workout plan this week and
present it to a general meeting of creditors for approval.
Meanwhile, Korea Development Bank, which is preparing a
workout plan for Daewoo Heavy Industries, has scheduled a
meeting of creditors for Oct. 27 to get approval on its
plan.  (Korea Herald  18-Oct-1999)

DAEWOO GROUP: Foreign creditors to accept some losses
-----------------------------------------------------
The steering committee for Daewoo's foreign creditors
yesterday expressed its intention of sharing losses, asking
the Korean government to come up with a definite loss
sharing ratio for the international banking community.
This is the first time that over 200 foreign creditors of
Daewoo offered their willingness to take a certain portion
of losses incurred by the recent corporate crisis.

"In order to speed up the process of rescheduling Daewoo's
overseas liabilities, the financial authority should
finalize the loss sharing ratio for the group's foreign
creditors. We are now prepared to accept the losses," a key
member of the steering panel told The Korea Times
yesterday.

While saying that all the discussions presently taking
place between the government and Daewoo's foreign creditors
are redundant, the foreign banker said that the two sides
now need to discuss the ratio for loss sharing.

"The ongoing negotiations are not going to help the two
sides reach a final compromise. It is just time consuming
that the government and Daewoo's foreign creditors are
reviewing short-term solutions," the foreign banker said
during a telephone interview.  "We want the local financial
authorities to propose a definite ratio for the loss
sharing for foreign creditors. A range of 30-40 percent,
for example, will be reasonable, to my personal knowledge."

The foreign banker said that the clear guideline from the
government is now the only possible solution for
rescheduling Daewoo's $5.05 billion short-term debts.
The negotiation between the two sides has remained
deadlocked as foreign banks have ruled out the chance of
taking any loss from the Daewoo case.

Now that the foreign creditors are prepared to take losses,
the restructuring process is expected to be accelerated.
The foreign banker pointed out that the Daewoo's heavy
inter-subsidiary deals are the major obstruction for the
group's workout process.

"Daewoo Group has the highest level of cross subsidies.
This makes it difficult for the government and creditors to
separate each business unit from the group," he said,
adding that most foreign creditors do not agree with the
government's decision on separating each Daewoo unit before
workout begins.

On the issue of the status of the steering committee, the
foreign banker admitted that a number of foreign banks have
been calling for disbanding the panel.

"Some argue that there is no point having the committee in
operation as no progress has been made. The workout process
is still government and local bank-dominated," he said.
"Yet, the advisory groups for the two sides are now engaged
in final dialogues. The two sides need the steering panel
at least for the time being."

Daewoo's foreign creditor banks formed a nine-member
steering body on Aug. 18, represented by Chase Manhattan,
Citibank, HSBC, ABN AMRO, UBS, Tokyo-Mitsubishi, Dai-Ichi
Kangyo, National Australia and Arab banks.  Through the
steering panel, foreign creditors have demanded that the
government discuss with them prior to issuing any debt
restructuring plans for Daewoo.

They also expressed a view through the committee that the
financial authorities provide a guarantee on their credits
in Daewoo should the group fail to repay their overseas
borrowings.  It is only then that they will agree to
refrain from legal actions to recover an estimated $5.05
billion in short-term credits in Daewoo.  However, the two
sides have reached no accord on any of the issues raised in
the last two months.

The local authorities conducted the rehabilitation of
Daewoo while excluding the group's foreign creditors.
On the issue of a government guarantee, the Korean
authorities flatly ruled out the possibility, saying the
international standard does not allow the government to
offer assurance on private sector deals.  Foreign creditors
on the other hand also failed to live up to their words of
refraining from legal actions as some have already filed
law suits overseas to secure their money.  (Korea Times  
19-Oct-1999)

DAEWOO GROUP: FSC hints at sales to domestic chaebol groups
-----------------------------------------------------------
Domestic conglomerates will be allowed to take control of
up-for-sale Daewoo Group companies under a policy shift
designed to accelerate the resolution of the Daewoo crisis,
sources said yesterday.

A ranking official at the Financial Supervisory Commission
said that the doors will open for the chaebol to buy Daewoo
firms in order to deter foreigner firms from acquiring them
at bargain prices.  However, only financially healthy
chaebol firms meeting the 200-percent debt-to-equity ratio
by year's end will be permitted to take part in the
takeover bids for Daewoo companies, he noted. He added that
FSC Chairman Lee Hun-jai voiced similar views in recent
parliamentary sessions.

The latest policy change immediately heightened speculation
that the Samsung Group may attempt to take over the
troubled Daewoo Motor Co. before merging it into Samsung
Motors. Rumors are also circulating that Hyundai Motor will
push to acquire Daewoo Motor and affiliated jeep and van
maker Ssangyong Motor. Further confusing the picture,
creditor banks' months-long efforts to sell Daewoo Motor
and Samsung Motors to foreign giants, such as General
Motors, have shown little progress due to sharp differences
over prices.

"At present, regulators and creditors are determined to
sell Daewoo Motor and Samsung Motors to foreign firms and
view Samsung's possible takeover of Daewoo as undesirable,"
said an industry analyst.  "Under the changed policy
stance, however, the so-called reverse 'big deal' scenario,
coined in connection with Daewoo's failed takeover bid for
Samsung Motors, can not be ruled out."

On other industrial fronts, local chaebol firms are also
expected to fiercely compete to acquire Daewoo's profitable
subsidiaries, such as Daewoo Corp.'s construction division
and Daewoo Telecom, among others, according to observers.

"The best solution is to hand over Daewoo companies to
foreign firms at reasonable prices," said the FSC official.
"But creditors will also have to devise an alternative
solution incase the sales negotiations end in failure."

An executive at one of Daewoo's creditor banks said that
the changed policies are mainly intended to draw the best
prices from aspiring foreign buyers, forecasting that only
small- and medium-sized Daewoo firms, excluding auto, heavy
industry and electronics units, will be sold to local
enterprises.

Meanwhile, creditors are scheduled to come up with
restructuring plans for seven of the 12 Daewoo companies
put under the "workout" debt-rescheduling programs, this
week. The seven firms are Ssangyong Motor, Daewoo Heavy
Industries, Daewoo Electronics, Daewoo Electronic
Components, Daewoo Telecom, Orion Electric Co. and Keangnam
Enterprises Co.

"Sufficient debt-rescheduling terms will be offered to help
the seven Daewoo companies normalize management and improve
their corporate values," said a spokesman for creditor
banks. "Heightened corporate values will eventually be
helpful to their third-party sales."

Restructuring plans for the five remaining workout firms -
Daewoo Corp., Daewoo Motor, Daewoo Motor Sale, Daewoo
Capital and Diners Club Korea - will be devised by Nov. 6.
(Korea Herald  18-Oct-1999)

DAEWOO HEAVY INDUSTRIES: More assets found
------------------------------------------
Daewoo Heavy Industries Inc. (DHI) has been found to have
more assets than liabilities, which will ease the burden
its creditors will have to bear in carrying out a debt
workout program for the Daewoo affiliate, a Korea
Development Bank (KDB) official said yesterday.

"An interim report on the assessment of DHI's financial
position shows that the company has total debts of 9.9
trillion won ($8.2 billion), a sum which is less than its
assets," the official said.

However, a considerable portion of its assets include loans
extended to its affiliates, which might take time to
collect and therefore a debt workout program for DHI is
currently being prepared, he said.  DHI is one of 12 Daewoo
units whose domestic creditors have placed them under debt-
workout programs to keep them afloat.

The official at the state-run bank, DHI's main creditor
bank, said DHI's better-then-expected financial situation
will make it easier for its creditors to reschedule the
debts of the Daewoo affiliate.  Creditors will also be able
to sell the embattled Daewoo subsidiary at a favorable
price because its machinery and shipbuilding segments have
good prospects, he added.

The KDB is working on a plan to set up three different
workout programs for DHI - machinery, heavy industry and
subordinated sectors - so that the three sectors can stand
on their own, the official said.  (Korea Herald  19-Oct-
1999)

HAEDONG INSURANCE: Regent Pacific signs MOU to take over
--------------------------------------------------------
The Regent Pacific Group, a British investment firm, signed
a memorandum of understanding (MOU) to take over Haedong
Insurance Monday. According to the MOU, Regent will
purchase 27% of the insurance firm's shares at US$20
million, and purchase additional shares worth US$10 million
in new rights offerings, Haedong said.

Sources said that the 27% shares belong to Haedong's
chairman Kim Dong-man and his son. The two are expected to
step down from the top management with only 21% of the
shares. The two firms plan to sign the main sales contract
by the end of next month.  

A Haedong official said Regent Pacific will have a British
insurance company run Haedong because it has no experience
in managing an insurance firm. An investment specialist,
Regent will take responsibility for managing Haedong's
assets.  The official added that Regent Pacific will change
the Korean insurance firm's name and will introduce
advanced management techniques.

Haedong has been seeking foreign investment to shore up its
capital. One of the smallest non-life insurance firms,
Haedong suffered 194 billion won in losses in fiscal year
1998. Capitalized at 15.7 billion won, its assets stood at
349.2 billion won as of the end of March this year.
With the acquisition of Haedong, Regent is taking shape as
an integrated financial group.

The British firm had signed another MOU for the takeover of
Daehan Investment Trust for an amount between W250 billion
to W300 billion last July but the main sales contract has
not been signed yet.  Observers questioned whether the two
sales deals will be concluded. Established in 1953, Haedong
suffered from a W1.94 billion loss in fiscal year 1998 and
has been attempting to attract foreign capital since.  
(Digital ChosunIlbo  18-Oct-1999, Korea Herald  19-Oct-
1999)

HAITAI BEVERAGE: Creditor bank cancels sale
-------------------------------------------
Cho Hung Bank (CHB), Haitai business group's major creditor
bank, said Monday that the announced sales contract for
Haitai Beverage to Hong Kong-based investment firm Clarion
Capital has been canceled. Cho Hung formally informed
Clarion of the contract's revocation last Friday because it
reneged on the terms of the contract, he said.

Haitai and Clarion signed the contract late last month for
the sale of Haitai's core unit at a price of W308.9
billion. However, the Hong Kong firm failed to remit the
US$20 million advance payment by the due date of October 15
as stipulated in the sales contract.

According to the contract, failure to remit the payment
results in a nullification of the contract and renders
Clarion liable for liquidation damages. The bank will file
a compensation suit against Clarion for breach of contract,
the official said but declined to reveal how much Cho Hung
will seek in compensation. Cho Hung has started negotiations
with another foreign prospective buyer on the sale of Haitai
Beverage, he added.

The breakdown of Haitai Beverage's sale is a drawback to
creditors' efforts to put the embattled Haitai Group back
on track, sources said. Haitai went belly-up in November
1997.  The creditor group-controlled Haitai business group
has been undergoing a series of rescue measures to
normalize operations at its subsidiaries.  (Digital
ChosunIlbo  18-Oct-1999, Korea Herald 19-Oct-1999)


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

CALTEX PHILIPPINES: 3rd quarter losses reach $7.45 million
---------------------------------------------------------
Despite the almost-monthly increases in oil prices, oil
firms are still claiming to be losing from their
operations.  In the third quarter alone, Caltex
Philippines, Inc. says it has incurred losses placed at 300
million Philippine pesos (US$7.45 million at
PhP40.246:US$1) to PhP400 million (US$9.94 million) as it
cannot fully recover the increases on international crude
prices.

In a telephone interview, Caltex president Frank Cruz said
the firm has not been able to fully recover the increase in
crude costs in the global market. Add to this, he said, is
the fact that finances are hampered by delays in effecting
price increases.

"In September alone, our losses have reached PhP200 million
(US$4.97 million) since the delays in effecting price
increases and the prices that we have been implementing are
not enough for us to fully recover," Mr. Cruz told
BusinessWorld.

He added that the firm's under-recovery is now at PhP1.15
to PhP1.20 per liter. Of this figure, PhP0.80 reflects the
increase in crude prices from August to September which has
not been reflected in local pump prices yet.

"Current pump prices only reflect crude prices of $18.20
per barrel and a foreign exchange rate (forex) of PhP39.30
(from July to early August). Last month, crude prices were
already at $21.60 per barrel from $19.48 per barrel in
August. The forex last month was at PhP40.25 from PhP39.30,
so we really need to increase pump prices. This increase in
crude prices (from August to September) will be effected
this month, we just don't know when exactly. It also
depends on our competitors," he explained.

He added that the oil companies can no longer absorb the
spiralling cost of crude, thus the need for another oil
price increase. However, he declined to give a specific
amount on the planned price hike which is expected to be
implemented within the week or early next week. The local
oil industry claimed to have incurred "under-recoveries" of
as much as PhP1.7 billion (US$42 million) monthly due to
the steep increase in international crude prices.  Prices
of international crude have doubled from $10 per barrel in
February to $21.60 last month. With this development, oil
firms are left with no other option but to increase pump
prices and pass on its losses to the consumers.

The foregone revenues of oil firms could be blamed on the
announcement of a production cutback by members of the
Organization of Petroleum Exporting Countries (OPEC) last
April.

Despite the under-recoveries, the oil firm earlier reported
a 20% increase in its net income for the first semester to
PhP600 million (US$14.9 million) from PhP500 million
(US$12.42 million) the same period last year.  Mr. Cruz
earlier said the slight increase in revenue is attributed
to the foreign exchange rate adjustments. The oil firm
computes its finances based on a PhP38:$1 exchange rate
given the peso's improvement from January to June.

"If we factor out the foreign exchange rate, our net income
is more or less the same as last year since we had a flat
growth on our sales for the first six months. However, due
to the peso appreciation we were able to gain income," he
explained.

This year, the firm projects to end the year with a net
income of PhP1.3 billion (US$32 million) should the foreign
exchange rate reach PhP40:$1. However, if the foreign
adjustment is lower than PhP40, the firm expects its income
to reach PhP1.5 billion (US$37 million).  

Last year, Caltex earned a net income of PhP1.3 billion
(US$32 million) which was a total reversal of its PhP2.5
billion (US$62 million) loss in 1997 after it was unable to
raise its prices for three months despite the continuous
surge in the cost of crude and the depreciation of the peso
vis-a-vis the US dollar.  Also, the firm said it would not
be possible for them to achieve a 12% return on rate base
(RORB) this year.

"Since, we cannot achieve a 12% RORB this year. We project
our RORB to be around 8% this year," Mr. Cruz said.
Among the three giants, Caltex has a market share of 21.3%
which places the firm in third place among competitor
Petron Corp., with a 37.6% market share, and Pilipinas
Shell Petroleum Corp. with a market share of 36.9%.
(Business World  19-Oct-1999)


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

KANJANAPAS FAMILY: Debt quagmire growing
----------------------------------------
It's the sad truth that the Kanjanapas family, one of the
world's 100 richest families, is mired in a debt nightmare
after having the financial health it nurtured over several
decades destroyed by the economic crisis.

The family hit the headlines late last week when UK-based
investment bank and Tanayong creditor, Schroder
International Merchant Bankers Ltd announced plans to sell
more than 20 per cent of Bangkok Transit System Co (BTSC).
Keeree Kanjanapas is the head of Tanayong, which currenty
has managerial control over BTSC. The auction will take
place on Nov 5.

Just a day after the announcement, a reporter from The
Nation accidentally bumped into Keeree and his two
colleagues in the lounge of the Regent Hotel. Despite a
tranquil atmosphere, everyone looked tense, sometimes
saying nothing to each other at all.  However, in sharp
contrast to recent media reports highlighting the family's
serious financial troubles, the trio -- Keeree, Anant and
Joseph -- recently gave a surprising interview with Far
Eastern Economic Review that not only stated that the
family was surviving, but also indicated that the clan was
poised for a comeback.

These three sons of empire-founder Mongkol Kanjanapas,
respectively head Tanayong, Bangkok Land Plc, and Stelux
Holdings, and are confident that asset sales and debt
repayments would help get their finances back to the pre-
crisis level.  Today, these companies are laden with
staggering debts of around US$1.9 billion and their losses
for this year to March were up to $300 million.

However, they told the magazine that they hoped to start
reaping profits again as early as next year and were
already planning new projects.

"We're in a better position now than we were before the
crisis," said Anant, 57, the eldest son and chief executive
officer of financially-troubled Bangkok Land.

He pinned his hopes on a faster-than-expected economic
recovery, but his optimistic view still has doubts over
whether the nascent economic recovery and the progress of
debt restructuring would have adequate momentum to pull the
companies out of the financial pit of despair.  Keeree told
the Review that family managers have devoted a great deal
of time to solve the financial problems in a relentless
effort to maintain ownership for the next generation.

"It's my father's intention that we maintain this as a
family business. If we can do that, he will be very happy
and personally I would love to see it happen," he was
quoted as saying.

The Asian boom peaked in the early 1990s and the Kanjanapas
family's fortunes peaked with it. By 1992, Fortune magazine
estimated the family's personal wealth at $2.1 billion. The
following year, combined profits from their four listed
companies reached an all-time high of $266 million.  But
those figures seemed to be just an illusion as they
concealed a badly over-extended empire. Hard times hit the
family directly after the Asian economic crisis erupted two
years ago. The family's businesses have been technically
bankrupt ever since.

"Maybe we are moving a bit too fast. I'm not going to blame
everything on the crisis," Keeree told the Review.

But Chris Prasertsinpanah, bank and property analyst with
Jardine Flemming Thanakom Securities in Bangkok, put it
more bluntly: "The companies were never seen as quality
companies, because they only listed during the bubble
years. They grew on volume, not value," he told the
magazine.

After running away from reporters for more than two years,
the family has started to talk at length about its
companies once again. At least losses at the family's
businesses fell by $328 million as of March this year
against total losses of $1.3 billion the previous year.
Keeree has frequently avoided tough questions, saying that
Tanayong had repaid some debts by selling condominiums at
Tanayong's Thana City Development east of Bangkok. He
expects to reach an agreement by this year end with local
creditors on the remaining Bt35 billion debt.

Looking ahead, Keeree said he was discussing with China's
state-owned China International Trust and Investment Corp
to jointly invest in a proposed new airport east of
Bangkok.  He also plans to join with a Chinese state
company to revive Bangkok's elevated road and railway
project. Tanayong is prepared to pour about $100 million to
$150 million into the project if the government permits it.

But up until now, it is still uncertain whether his rosy
dream would come true and his family empire would make a
comeback once again when the economy is poised to stage a
turnaround.  His dream could easily evaporate on Nov 5 if
Schroder manages to sell the BTSC stake.  A successful sale
would force Keeree to lose control of the company.  So hold
your breath for another 17 days, and we will all see what
will happen.  (The Nation  18-Oct-1999)

MEC FAR EAST INT'L.: To be delisted
-----------------------------------
The Stock Exchange of Thailand announced that MEC Far East
International Plc (MEC) would be delisted from the stock
market from Oct 27, 1999, onwards.  (The Nation  18-Oct-
1999)

SAMART COMMUNICATION SVC.: Secures roll-over agreement
------------------------------------------------------
Samart Communication Service Co Ltd (SCS) has secured an
agreement from its creditor Bank of America to roll over
its short-term debt repayment.

As a result of the deal, which is guaranteed by parent
company Samart Corporation Plc, the rural phone service
carrier will start its debt servicing in the next five
years, instead of this year.  In its filing with the Stock
Exchange of Thailand (SET) yesterday, Samart said the Bank
of America agreed to restructure SCS's Bt400 million short-
term debt into a five-year, long-term loan.

The deal was clinched with Samart's assistance. At a
meeting on Oct 12, Samart's board of directors passed a
resolution for the company to act as guarantor for the
loan. Under the resolution, the authorised directors --
with a company affidavit -- have the right to sign the
guarantee letter.

SCS borrowed Bt400 million from the Bank of America to
finance the project awarded by the Telephone Organisation
of Thailand to provide satellite phone services in remote
areas.  The agreement on SCS debt-restructuring represents
success in Samart's continued efforts to improve the
financial standing of itself and its subsidiaries.

Last month the company won agreement from its lenders to
reschedule Bt7.2 billion in loans. The signing of the deal
was postponed from Sept 30 to next week.  The company
declined to specify the length of the debt roll-over. But a
source in Samart said it was seven years.

Both restructuring agreements were concluded at a crucial
time for the telecom group, which is reforming its business
lines into three core businesses: mobile phones, paging and
the Internet. Samart is also reorganising its management
line-up in accordance with its new business strategy. To
streamline its businesses, the board previously approved
the management's plan to acquire 450,000 more shares or
0.64 per cent in its paging subsidiary, Samart Paging Co
Ltd, for Bt4.5 million.  The move will increase the stake
that Samart has in the paging operator to 89.28 per cent.
(The Nation  18-Oct-1999)


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