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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, December 10, 1999, Vol. 2, No. 241

                                      Headlines


* C H I N A  &  H O N G  K O N G *

GITIC ENTERPRISES: White knight may avoid liquidation need
GITIC ENTERPRISES: Stock drop on rumors of rejected offer
POLY INVESTMENTS HOLDINGS: Posts first-half loss


* I N D O N E S I A *

TEXMACO GROUP: Creditors form "lenders club"


* J A P A N *

CREDIT SUISSE FIN.PRODS.: Banking laws violations charged


* K O R E A *

DAEWOO ELECTRONICS: Sale collapses
DAEWOO GROUP: Foreign Creditors reject 80% loss ratio deal
DAEWOO GROUP: FSS probing funds misuse between affiliates
DAEWOO MOTOR: Reports of Ford Motor Co. takeover interest
SSANGYONG MOTOR: To sell off $26.5M in assets under rehab


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

UNIWIDE GROUP: Asks SEC to postpone creditor meeting


* S I N G A P O R E *

AVIMO GROUP: Sells subsidiary for loss
PACIFIC CAN INVEST.: Capital increase approved for bailout


* T H A I L A N D *

THAI PETROCHEMICAL INDUS.: Creditors mulling alternatives


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

GITIC ENTERPRISES: White knight may avoid liquidation need
----------------------------------------------------------
GITIC Enterprises Ltd may avoid liquidation thanks to the
interest of an investor keen to acquire a controlling stake
in the company, industry insiders say.  But creditors will
still probably have to accept a 60 per cent "haircut" as
the price for the deal.

The company, the Hong Kong-listed property and construction
materials unit of the mainland's Guangdong International
Trust and Investment Corporation (Gitic) that was declared
bankrupt in January, has confirmed reports that it has
received bids from interested suitors.  The favourite
suitor, according to unconfirmed reports, is Gold Arch Real
Estate, a Hong Kong company whose main business is the
development of residential property projects in Guangdong
province.

Its intention is reportedly to convert Gitic Enterprises
into a property development company which would operate on
the mainland.  Chen Qiao, deputy managing director of Gitic
Enterprises, said that "several offers have been received"
by the liquidators of Guangdong International Trust &
Investment Corporation Hong Kong (Holdings) Ltd, Gitic
Enterprises' intermediate holding company that went into
creditors' voluntary liquidation in October 1998, but none
of them was a legally binding offer.

The liquidators "have not accepted nor indicated acceptance
of any such offers and negotiation has not yet commenced
with respect to any of such offers," Mr Chen said in a
statement to the Stock Exchange of Hong Kong received
yesterday.

The statement was made at the request of the Stock Exchange
following exceptional movements in the company's share
price.  KPMG, the appointed liquidator of Gitic's Hong Kong
subsidiaries, and financial advisers ICEA Finance Holdings
is reported on Tuesday to have selected one of four bids.
If the bidder is able to come to an agreement with the
liquidators by the end of December then Gitic Enterprises
will be able to avoid liquidation.

Gabriel Tam Chi-kok, a partner of KPMG confirmed that
"several bids" for a stake in Gitic Enterprises had been
received by ICEA , which would make a recommendation to the
liquidators.

"If a bid is made which we think is in the best interest of
creditors we will try to get it cleared as soon as
possible," said Mr Tam, who has been working on the case
for almost a year.

He said that as this involved a major stake in the company,
the normal procedures would have to be followed. He guessed
that this might take between one to two months. Unconfirmed
reports say that the leading bidder is offering to pay $85
million to acquire the 58.66 per cent stake in Gitic
Enterprises presently held by Gitic Hong Kong (Holdings)
Ltd. This is the equivalent of 30 cents per share.

Separately, a standard purchase agreement has been signed
for Gitic Enterprises' marble business to be sold to Tony
Lam Yau-pui, the director of Elegant Stone.  This
transaction, which would generate $44.5 million, is waiting
for a waiver of the requirement for an extraordinary
general meeting of shareholders to be granted by the Stock
Exchange of Hong Kong, Mr Tam said. He expected everything
to be completed by the end of January.

The sale of the marble business means that Gitic
Enterprises would have $45.6 million in cash.  If it is
Gold Arch that gets control of Gitic Enterprises, it
reportedly plans to use this cash to purchase property
projects on the mainland. It is understood that in return
for an issue of new shares it will inject between $300-$400
million into the company, enabling it to reduce its debts.
(Hong Kong Standard  09-Dec-1999)

GITIC ENTERPRISES: Stock drop on rumors of rejected offer  
---------------------------------------------------------    
Share prices of collapsed Gitic Enterprises dipped 5.5 per
cent after the company rejected rumours it would accept a
takeover offer.  The counter shed 2.5 cents yesterday to
close at 42.5 cents.  It edged up four cents to close at 45
cents on Tuesday amid rumours Gitic would accept the $145.5
million takeover offer from Gold Arch Real Estate.

Gitic's share price has risen more than 13 per cent in the
past two weeks on hopes liquidators would accept one of
four takeover offers.  Gold Arch, an unlisted Hong Kong
company that focuses on the Guangzhou property market,
reportedly made a $145.5 million takeover bid.  The company
would pay 30 cents for each of the 485 million shares to
buy a 58.7 per cent interest in Gitic from liquidators of
Guangdong International Trust & Investment Corporation Hong
Kong (Holdings), Gitic's intermediate holding company,
reports said.

It was also rumoured it would also inject $300 million to
$400 million in mainland property assets into Gitic, which
confirmed its liquidators had received several offers, but
none were legally binding.  "They have not accepted nor
indicated acceptance of any of such offers and negotiation
has not yet commenced," the company said.

Gitic, the investment arm of the Guangdong provincial
government, collapsed last October after its parent company
repaid its 12.02 billion yuan (about HK$11.21 billion)
aggregated debts. It was declared bankrupt in January.  
(South China Morning Post  09-Dec-1999)

POLY INVESTMENTS HOLDINGS: Posts first-half loss
------------------------------------------------
Property developer Poly Investments Holdings posted an
interim net loss of $3.85M for the six months ended  
September 30, compared with $3.64M net profit a year
earlier.  Turnover for the half was down $17.91M, to
$192.55M.  It recorded $7.2M exceptional loss for the half,
compared with $3.26M in 1998.


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

TEXMACO GROUP: Creditors form "lenders club"
--------------------------------------------
Creditors of the Texmaco Group textile conglomerate have
agreed to form a "lenders club" in a bid to resolve the
group's problems handling huge debt to four state banks and
the Indonesian Bank Restructuring Agency (IBRA), Minister
of Finance said yesterday.  (Asia Pulse  08-Dec-1999)


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

CREDIT SUISSE FIN.PRODS.: Banking laws violations charged  
---------------------------------------------------------       
In the strongest action ever taken against a foreign
financial firm in Japan, prosecutors have charged Credit
Suisse Financial Products (CSFP) and its former branch
manager in Tokyo with violating banking laws.  Tokyo
District Court had received a copy of the charges from
prosecutors, a court spokesman said.

"The prosecutors have charged Credit Suisse Financial
Products and [its former Tokyo branch manager] Shinji
Yamada with violation of the Banking Law," he said.

The prosecutors alleged that Yamada, who was arrested last
month on suspicion of obstructing an inspection by the
Financial Supervisory Agency, had conspired with two other
unidentified company employees early this year to conceal
documents from the government watchdog as it conducted an
investigation.

"Although the accused was ordered to submit all documents
the branch possessed, the accused gave false answers to
investigators and evaded investigations," the prosecutors
said.

CSFP had its banking licence revoked in July for offering
inappropriate products to clients and obstructing official
investigations.  At that time the company said some
employees had taken it into their own hands to shred
documents, thinking they were covering up potential
firewall violations.  CSFP is a unit of the Swiss banking
giant Credit Suisse Group.

According to Jiji Press news agency, Yamada was suspected
of concealing documents and sending them to the unit's
British offices during Financial Supervisory Agency
inspections from January 20 to February 23 this year.  The
London office allegedly returned the documents later, said
Jiji Press, describing it as a sign of systematic
involvement by Credit Suisse.

"The decision by the Tokyo Prosecutor's office may be
related to the isolated conduct of some former employees of
CSFB during an examination conducted by the Financial
Supervisory Agency of Japan earlier this year, which might
have delayed, but did not actually obstruct, the
examination," Credit Suisse Group said. "At no time did
CSFB or the group endorse this isolated behaviour which
went against the high standards of integrity and
professionalism expected of its employees".

On discovering the misconduct, Credit Suisse said it
organised a thorough and independent investigation of the
incident which concluded that senior management based
outside Japan were unaware of the misconduct and that the
group disclosed the situation immediately to the FSA.  
Under the banking law, the maximum penalty for evading
inspections is a three million yen (about HK$227,535) fine
and one year in jail for an individual and a 200 million
yen fine for a corporation.

Reports said CSFP sold investment products to help Japanese
corporate clients hide problem loans or capital losses made
on securities holdings and keep these losses off their
balance sheets.  The action against CSFP was reportedly the
first since the banking law was revised in 1997 to toughen
up the former penalty of a maximum 500,000 yen fine for
either individuals or corporations.  (South China Morning
Post  09-Dec-1999)


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

DAEWOO ELECTRONICS: Sale collapses
----------------------------------
The planned sale of the electronics unit of South Korea's
ailing Daewoo Group to Walid Aloma et Associates LLC
collapsed yesterday, Daewoo officials said.

"Our five-month-long exclusive bargaining with Walid Aloma
bore no fruit," Chong Jae-Hyon, a spokesman of Daewoo
Electronics, told AFP. "It is attributed to, more than
anything else, Aloma's failure to raise the funds necessary
to take over Daewoo Electronics."

The US-based Saudi Arabian investment company had to raise
US$1.2 billion to acquire the company.  "After the five-
month exclusivity clause with Walid Alomar officially
expires today, Daewoo Electronics will be looking for other
potential buyers," Chung said.

Daewoo Electronics is one of the 12 Daewoo units placed
under debt-rescheduling plans by South Korean creditor
banks.  Local reports said General Motors (GM) would start
negotiations with South Korean financial authorities to
take over two other ailing Daewoo auto units - Daewoo Motor
and Ssangyong Motor.

But neither financial authorities nor Daewoo Motors
confirmed the reports.  Larry Zahner, GM's chief executive
in China, reportedly told South Korean journalists in China
that GM will buy Daewoo Motor and Ssangyong Motor.
A GM spokesman declined to comment on the report.

"We said we have been talking with Daewoo, but we have not
said anything about the result of our discussions," GM
spokesman John Mueller, in Detroit, said.

The Daewoo Group, which expanded recklessly on borrowed
funds, is being dismantled under the weight of up to US$60
billion debt.  (Business Day  09-Dec-1999)

DAEWOO GROUP: Foreign Creditors reject 80% loss ratio deal
----------------------------------------------------------
Refusing to accept the government's proposal of a 76.7
percent loss ratio for Daewoo's foreign debt, major
overseas lenders are now seriously considering pursuing
legal options to protect their interests.

Since both negotiations with the government and legal
proceedings will impose the same level of damages, even
large foreign creditors prefer to take the issue to court
in the belief that it will offer a fair and transparent
solution.

"I believe many large foreign banks are now serious about
legal solutions. They think there is nothing more to lose
even if they take the issue to court," a foreign banker in
Seoul told The Korea Times yesterday during a phone
interview.  "Besides, many foreign banks still think they
are not being treated equally by the Korean government. By
dealing with it legally, overseas lenders will at least be
able to secure transparent treatment."

So far only small overseas lenders have taken legal
proceedings to secure their credits in Daewoo.  But this
time, major creditors are also seeking ways of bringing the
case to law enforcement authorities, a move which will
seriously undermine the government- and creditor-led
workout of Daewoo.  

To date, Bank Brussels Lambert of Belgium and French
Netexis Banques Populaires have taken legal action.
The Belgian bank filed a lawsuit against Daewoo to secure
the repayment of its $10 million loan to the group's
overseas motor sales firm, attempting to seize 6,000 Daewoo
cars in lieu of its credits.  The French bank took a
similar course of action against Daewoo's overseas
subsidiary in Hong Kong for the amount of $10 million on
July 17.

"Now perhaps it is a matter of who takes the first legal
action. Once a foreign bank takes an initial action, others
will follow," he said, warning the Korean government to be
prepared for a devastating impact.

He said there was still a lack of communication between the
government and foreign banks, a key reason for the
confrontation.

"Domestic banks would surely have more information than
foreign creditors and this is still the key reason for the
deadlocked situation over rescheduling Daewoo's over $5
billion foreign liabilities," the foreign banker said.

On Wednesday, foreign creditors of Daewoo were asked to
accept a 76.7 percent loss of the loans they extended to
four Daewoo operations.  The loss ratio for Daewoo Corp.,
to which foreign banks gave most of their loans, was set at
the highest level of 82 percent.  Foreign banks, however,
argue that they need to secure repayment of at least half
of their credits in Daewoo.  (Korea Times  09-Dec-1999)

DAEWOO GROUP: FSS probing funds misuse between affiliates
---------------------------------------------------------
The Financial Supervisory Service (FSS) organized a special
audit team to look into the possible misuse of funds and
falsification of accounts involving the Daewoo Group's 12
affiliates subject to debt workout.

Through June next year, the 28-member team will investigate
whether accounts were falsified and determine if certain
accounting companies failed to uncover false accounting,
the FSS said yesterday.

"If suspicions are verified, former group chairman Kim Woo-
choong, who was concurrently representative of Daewoo's
core affiliates, will be held accountable, and legal action
may follow," an FSS source said.

Punishment could involve a three-year jail term or fine of
up to 30 million won.  A final audit of Daewoo's overseas
companies revealed that the financial support extended by
them to other affiliates reached $7.5 billion. Funding
transactions among affiliates did not match and documents
against acceptance (D/A) were not reimbursed and simply
disappeared in many cases.  (Korea Herald  10-Dec-1999)

DAEWOO MOTOR: Reports of Ford Motor Co. takeover interest
---------------------------------------------------------
International competition for the control of Daewoo Motor
is likely to take a new twist, following reports of Ford
Motor Co.'s intent to take over Korea's No. 2 carmaker.

According to banking sources, a ranking Ford executive
visited the Korea Development Bank, a leading Daewoo
creditor, Tuesday and expressed the U.S. firm's wish to
acquire the Daewoo unit. "Just like General Motors and
Fiat, Ford expressed a basic interest in Daewoo. Details
were not discussed," said a KDB official.

But industry analysts are deeply divided over Ford's real
intentions behind its sudden decision to join the race for
Daewoo Motor.  Some analysts say Ford is seeking to cement
its position in Asia through Daewoo's acquisition, whereas
others insist the bid is merely an attempt to curb rival
GM's expansion in the fast-growing Asian market.

"The rising number of aspiring buyers will force the Seoul
government to give up its attempt to implement the sale
through private contracts, heightening the possibility of
an open international auction," said an auto analyst at the
Korea Economic Research Institute.  "The international
bidding also conforms to Seoul's policy not to sell Daewoo
at a bargain. Then, the participation by local firms, such
as Hyundai Motor and possibly, the Samsung Group, in the
bidding can not be ruled out."

He speculated that both GM and Ford may launch joint bids
with Korean firms, such as Hyundai or Samsung, to reduce
the risks of taking over Daewoo Motor. But he raised
questions over Fiat's M&A capability, pointing to the
Italian firm's cash reserves of just $700 million.  Last
week, GM, calling Daewoo Motor a crucial part of its
strategy to expand its Asian market share to over 10
percent by 2005, declared its intention to take over
Daewoo's entire domestic and overseas operations.

Ford, which produced 6.82 million units last year, sees the
acquisition of Daewoo Motor, with an annual output capacity
of 1.9 million units, as a golden opportunity to challenge
GM's 8.14-million-unit capacity.  Analysts say Ford may be
readying itself for a push to strengthen its position in
the 1.3-million-unit-a-year Korean market as part of its
ambitious Asian market strategy.

In addition, the takeover of Daewoo Motor would quicken
Ford's inroads into the Chinese market, which is widely
viewed as having the biggest growth potential in the world.
Industry skeptics, meanwhile, present a different scenario,
calling Ford's bid a mere gesture to curtail GM's growth in
Asia.

"The emergence of rival bidders will naturally drive up the
bidding prices, subsequently preventing GM from buying
Daewoo Motor at a rock-bottom price," said an economist at
the Daewoo Economic Research Institute.

Ford also seems to be anticipating a move by the Seoul
government to write off a chunk of Daewoo Motor's debts and
sell off only healthy assets to foreigners, he said.
The economist added that there has been widespread talk of
Ford's willingness to intercede in a GM-Daewoo acquisition.
A KDB executive said creditors' efforts to sell off Daewoo
Motor will begin early next year after the appointment of a
new company management team and the finalization of its
debt-rescheduling plans.  (Korea Herald  10-Dec-1999)

SSANGYONG MOTOR: To sell off $26.5M in assets under rehab
---------------------------------------------------------
Ssangyong Motor will sell off assets worth 30 billion won
($26.5 million) over the next three years under a
restructuring agreement that it will sign with its
creditors soon.

An executive of the troubled motor firm said yesterday that
under an agreement reached with its creditor banks led by
Cho Hung Bank,the company has sold 1.47 billion won worth
of assets this year.  It plans to sell 26.17 billion won in
assets next year followed by 1.61 billion won in 2001 as
part of its self-help efforts to normalize its operations.

Furthermore, the carmaker will sell off its truck and bus
production units valued at 13.8 billion won to overseas
buyers and negotiations are underway with a Chinese
commercial vehicle manufacturer.  A Ssangyong executive
said that most of the assets to be sold include non-
business real estate and marketing facilities, which
include some real estate.

Creditor banks will not demand the inclusion of cuts in
salaries and the number of employees because wages at
Ssangyong are lower than those at other carmakers and
shortages are seen in some sectors of administrative and
production units.  The motor firm will be the first of
Daewoo Group's 12 affiliates on workouts to sign an
agreement with creditors early next week followed by
shareholders' approval to reduce capital and switch loans
to equity Jan. 15.  (Korea Times  09-Dec-1999)


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

UNIWIDE GROUP: Asks SEC to postpone creditor meeting
----------------------------------------------------
Retail and real-estate firm Uniwide Group of Companies has
asked the Securities and Exchange Commission (SEC) to
postpone its creditors meeting set today and to delay the
approval of the company's debt-rehabilitation plan until a
formal agreement with a new investor can be reached.

The move to hold the approval is a turnaround from the
committee's earlier demand that the corporate overseer
immediately approve the rehabilitation plan. Uniwide
earlier stressed that it is necessary that the plan be
approved in time for Christmas, claiming that this is a
crucial time for the retail sector. The creditors meeting
set today aims to iron out differences between Uniwide's
creditors and its receiver committee regarding its debt
rehab plan submitted last October.

In his letter to the SEC chairman dated December 6,
Uniwide's Interim Receiver Committee chairman Monico V.
Jacob said recent negotiations between Uniwide and possible
investors may result to ammendments in the company's debt-
rehabilitation plan. Under the proposed plan, the
receivership committee said at least one billion Philippine
pesos (US$24.5 million at PhP40.712:US$1) in equity is
required to restore Uniwde's retail operation. The amount
will be used to buy stocks for the retail stores, while
another PhP500 million ($12.3 million) will be needed for
capital expenditure.  (Business World  09-Dec-1999)


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

AVIMO GROUP: Sells subsidiary for loss
--------------------------------------
Avimo Group yesterday announced the sale of its wholly
owned subsidiary ACP Metal Finishing for $3.25 million,
thus exiting from the metal finishing business completely,
which it considers a non-core business.  It said a loss of
$0.1 million would be incurred from the disposal.  (Straits
Times  09-Dec-1999)

PACIFIC CAN INVEST.: Capital increase approved for bailout
----------------------------------------------------------  
Troubled Pacific Can Investment Holdings has taken a first
step towards paying off its debts and getting back on an
even keel, as its shareholders have approved an increase in
its authorised capital which will pave the way to the issue
of new shares for a bail-out.

The company said yesterday that shareholders unanimously
agreed to reduce the par value to 10 cents from 50 cents at
an extraordinary general meeting. They also agreed to an
increase in the authorised capital to $200 million.  As a
result of the reduction in par value and the increase in
authorised capital, the company will be able to issue 1,800
million new shares of 10 cents par each. Pac Can disclosed
this in a statement to the Singapore Exchange.

The shareholder approvals move the loss-making and debt-
laden producer of cans, which also has construction and
property interests, closer to putting into action a rescue
plan by Seatown Group, one of the largest shipping brokers
in Singapore.  Pacific Can, devastated by a series of bad
investment decisions and boardroom squabbles, has been
suspended from trading since April when it could not repay
some $20.6 million of loan stocks due then.  It owns a
total of $22 million at last count.

But the bad news did not stop there.  It was in the red the
last five years, losing $8.3 million last year.  And it
looks set to report another loss when it submits its
results later this month. In September, Pac Can came under
the judicial management of Arthur Andersen which chose
Seatown group out of six bidders for the bail out.  To pay
off creditors, Seatown will pump $23 million in cash and
also inject its construction business valued at some $60
million.

Seatown, which is expected to make a profit of more than
$11 million this year, was chosen as it could give Pac
Can's existing business a boost.  The deal will see Mr See
Chee Beng and Mr Wee Yan Siew of Seatown controlling 90 per
cent of Pacific Can after 830 million new shares are issued
to them in return for the cash and asset injection.  
Yesterday's shareholders agreement requires High Court
approval.

"The good news for Pac Can's creditors and shareholders is
that we've crossed the first hurdle and are moving forward
with the deal," said a source close to judicial manager
Nicky Tan of Arthur Andersen. "It's just really a lot of
procedures from now on. We're still on schedule for the
deal to be completed in February to March."

The deal was expected to be completed in six months, or
Seatown can terminate the agreement.  (Straits Times  09-
Dec-1999)


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

THAI PETROCHEMICAL INDUS.: Creditors mulling alternatives
---------------------------------------------------------
Creditors of Thai Petrochemical Industry (TPI) say they
could turn to legal action or squeeze credit to force the
company's management to approve debt restructuring plans.

"No one wants to take over TPI. Each creditor just wants
their money back," said one banker.

Talks on restructuring the firm's $3.5-billion debt have
come to a halt. On Tuesday, Prachai Leophairatana, TPI
chief executive, blasted creditors for failing to approve a
company proposal to raise $1 billion in capital earlier
than originally planned.  But local bankers said the
creditor steering committee wanted TPI to commit itself to
the restructuring contract before discussing
recapitalisation.

"No one can guarantee that the firm will be able to raise
$1 billion in capital," one banker said. "If TPI can't do
so, then it will only lead to more delays in everything.
The restructuring plan was originally agreed to in
February. But with petrochemical prices improving, the
company just decided to delay."

Still, the banker acknowledged that options were limited.
As TPI's assets exceeded its debt burden, it could not be
taken to the bankruptcy court.  One option, he said, was
for creditors to squeeze the firm by refusing to open
letters of credit or provide short-term facilities, to
press management to return to the bargaining table.
(Bangkok Post  09-Dec-1999)


S U B S C R I P T I O N  I N F O R M A T I O N

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

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

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                        *** End of Transmission ***