TCR_Public/980728.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R     
  
             A S I A   P A C I F I C      

      Thursday, July 23, 1998, Vol. 1, No. 107

                    Headlines


C H I N A   &   H O N G   K O N G

CHINA ELEGANCE: Finds underwriter for rights issue
FORLUXE SECURITIES: Forluxe clients forced to wait
KPS VIDEO EXPRESS: Legal action considered against KPS
LAI SUN DEVELOPMENT: US$400m disposal bails out Lai Sun
WHARF CABLE: Cable revenue up 30pc in 6 months


K O R E A

DAEWOO MOTOR: Strikes cripple car industry
DONG-AH GROUP: Reported as candidate for "workout"
HYUNDAI MOTOR: Strikes cripple car industry
KIA MOTORS: Samsung first on grid for Kia contest
SHINWON INDUSTRY: Firm goes bankrupt


M A L A Y S I A

ARAB-MALAYSIAN BANK: Merchant bank on S&P's CreditWatch
CHATEAU HORIZON SDN BHD: Winding-up petition
KEDAH CEMENT: International interest grows for firm
PERAK HUMAN RESOURCES SDN BHD: Winding-up petition
RENONG: Seeks debt relief on put option


P H I L I P P I N E S

PHILIPPINE AIRLINES: PAL losses quadruple to $73m
SAN MIGUEL: Chairman asks for mass resignations from execs


T H A I L A N D

BANGKOK BANK: Losses increase concern on sector
PHOENIX PULP & PAPER: Authorities order closing of firm
SIAM COMMERCE BANK: Losses increase concern on sector
THAI DANU BANK: Losses increase concern on sector
THAI FARMERS BANK: Losses increase concern on sector


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

CHINA ELEGANCE: Finds underwriter for rights issue
--------------------------------------------------
The SCMP of July 22 reports cash-strapped leather products
maker China Elegance International Fashion has found a
"white knight" in the cousin of its major shareholder
Muwarto Surya.

Cousin Chan Chun-keung, who is also chairman of rival
company Dragonfield Holdings, has pledged to underwrite
China Elegance International's proposed $10 million rights
issue.

On Monday China Elegance revealed it had suffered a $172.8
million unaudited operating loss in the year to March 31.

China Elegance plans to sell its non-core leather retailing
and cigarette operations in exchange for a 21.6 per cent
stake in a power plant in Fujian province.

China Elegance finance director Gordon Tong Tze-tung said
the proceeds of the spate of share placements launched in
the past six months had been spent halving debts to about
$50 million.

Mr Tong said the company now had $10 million cash on hand.


FORLUXE SECURITIES: Forluxe clients forced to wait
--------------------------------------------------
According to both the SCMP and Hong Kong Standard of July
21, the court rejected the proposal on shares distribution
forwarded by Forluxe's provisional liquidator. The court
wants the legal issue of compensation to be resolved first,
so Forluxe Securities customers must wait for the results
of the liquidation of CA Pacific before they can recover
their shares.


KPS VIDEO EXPRESS: Legal action considered against KPS
------------------------------------------------------
According to the Hong Kong Standard, the Consumer Council
is considering legal action against KPS Video Express,
nearly a month after the rental chain decided to suspend
the use of pre-paid coupons, a move that has drawn 1,800
complaints from consumers.


LAI SUN DEVELOPMENT: US$400m disposal bails out Lai Sun
-------------------------------------------------------
According to the SCMP of July 21, Lai Sun Development is
planning to ask Lai Sun Hotels International (LSHI) to pay
it a special dividend following the sale of the Four
Seasons Hotel in New York to help alleviate its
increasingly severe cash flow problem.

Analysts said  a consortium led by LSHI could dispose of
the Four Seasons Hotel for about US$400 million. Stripping
out capital gains tax, investment costs and other expenses,
Lai Sun said LSHI could reap a net US$55 million from its
interest in the 370-room luxury hotel.

LSHI owns 49.99 per cent of the consortium which includes
Hong Kong Parkview Group, Manhattan Garments Group, Amecor
Group and Sunnet Investment Group.

Lai Sun Development owns 52.2 per cent of LSHI. Cosco (HK),
the local investment arm of the mainland's biggest shipping
company, China Ocean Shipping (Group), is the second
largest shareholder with a 20 per cent stake.

Lai Sun Development is estimated to have a gearing of about
50 per cent and is eager to lower debt, incurred after it
took over Furama Hotel Enterprises at HK$6.9 billion.


WHARF CABLE: Cable revenue up 30pc in 6 months
----------------------------------------------
According to the SCMP of July 21, Wharf Cable yesterday
confirmed that its subscriber base of about 400,000 had
registered almost no growth in the year to date, but said
the company had increased total subscribers by 30 per cent
when compared to the first half of last year.

Wharf Cable claims to have begun returning a positive cash
flow since February, it is still expected to lose at least
$300 million on depreciated charges this year.

According to the Hong Kong Standard, the company dispelled
market rumours that Wharf was considering selling part of
its stake in Cable TV. The company said it had sufficient
cash flow to finance its capital expenditure without having
to seek help from its parent, Wharf Holdings.


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

DAEWOO MOTOR: Strikes cripple car industry
------------------------------------------
According to the Hong Kong Standard, car production in
South Korea was crippled yesterday as its two main
producers shut down amid dramatic protests and calls for
fresh strikes against mass layoffs.

The country's largest carmaker, Hyundai Motor, declared a
one-day holiday at its factories in the southern city of
Ulsan while Daewoo Motor shut up plants for three days to
beat a stoppage.

Thousands of union workers set up tents at Hyundai's Ulsan
premises for a prolonged protest. Some workers were accused
of burning company property as thousands of riot police
were placed on standby.

One senior Hyundai labor leader said the union would reach
a decision on further action late yesterday.

Militant unions are expected to stage rallies and strikes
starting tomorrow to protest against restructuring --
including mass layoffs -- as agreed upon with the
International Monetary Fund under a US$57 billion financial
bailout.


DONG-AH GROUP: Reported as candidate for "workout"
--------------------------------------------------
The Korea Herald reports that Financial Supervisory
Commission (FSC) sources have said that creditor banks have
tentatively agreed to rehabilitate the Dong-Ah Group by
selecting it as a candidate for the workout restructuring
program. Dong-Ah (Korea's 10th largest in terms of assets)
will be the largest firm to participate in a workout
program.

The Korea Times also reported that Seoul Bank (the main
creditor bank of the Dong-Ah Group) will soon hold a
creditor meeting to get approval for the workout program.  
Creditors are reportedly set to grant Dong-Ah a one-month
grace period of debt payments.

The Dong-Ah Group has been granted a total of 960 billion
won ($738 million) in emergency loans on three occasions
this year. The group has also promised to sell its
subsidiaries (including Korea Express) to finance its own
self-rescue program.

The Korea Herald reports that industry analysts say that
the workout decision comes after the Dong-Ah Group failed
in its attempts to convert reclaimed land near Kimpo
International Airport into commercial uses. Furthermore,
the group's efforts to sell off key assets and subsidiaries
have not been proceeding smoothly.  

Other industry watchers quoted in the Korea Times state
that this workout plan will be the last chance for Dong-Ah
to stand on its own with the help of creditor banks. If the
group cannot manage to normalize its operations this time,
there are fears that it will face collapse.

The workout procedure is aimed at helping firms hit by
temporary liquidity shortages to regain financial health
and competitiveness through debt relief and creditor
offered restructuring programs.


HYUNDAI MOTOR: Strikes cripple car industry
-------------------------------------------
According to the Hong Kong Standard, car production in
South Korea was crippled yesterday as its two main
producers shut down amid dramatic protests and calls for
fresh strikes against mass layoffs.

The country's largest carmaker, Hyundai Motor, declared a
one-day holiday at its factories in the southern city of
Ulsan while Daewoo Motor shut up plants for three days to
beat a stoppage.

Thousands of union workers set up tents at Hyundai's Ulsan
premises for a prolonged protest. Some workers were accused
of burning company property as thousands of riot police
were placed on standby.

One senior Hyundai labor leader said the union would reach
a decision on further action late yesterday.

Militant unions are expected to stage rallies and strikes
starting tomorrow to protest against restructuring --
including mass layoffs -- as agreed upon with the
International Monetary Fund under a US$57 billion financial
bailout.


KIA MOTORS: Samsung first on grid for Kia contest
-------------------------------------------------
According to the SCMP of July 21, South Korean carmaker
Samsung Motors has submitted its offer to acquire ailing
Kia Motors Corp.

Samsung, which began making cars only in March, yesterday
became the first firm to submit a bid since Kia Motors and
its commercial vehicle arm, Asia Motors Corp, were put up
for auction last week.

Hyundai plans to submit its offer on Friday but admitted
that labor unrest might undermine its bid for a stake in
Kia.

Samsung, an underdog in the battle for Kia, expressed
confidence. A spokesman said the company has prepared well
to take over Kia, although their tender would depend on the
amount of capital to be brought from abroad.

Ford, which holds a 16.0 per cent stake in Kia with
Japanese affiliate Mazda, has expressed interest in the
auction. But Kia said it had so far received no open offers
from any foreign firms amid worries the bid procedure could
drag on.

Bidders were urged to submit simultaneous offers of intent
by Friday to acquire at least a 51 per cent stake in both
firms. Tenders must be submitted by August 21.


SHINWON INDUSTRY: Firm goes bankrupt
------------------------------------
According to the Korean language Maeil Kyungje's Business
Brief section, Shinwon Industry has gone bankrupt. The
company could not pay bank note worth 214,000,000 won from
Foreign Exchange Bank.


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

ARAB-MALAYSIAN BANK: Merchant bank on S&P's CreditWatch
-------------------------------------------------------
The Asian Wall Street Journal reported that Standard &
Poor's Ratings Group has placed the Arab-Malaysian Merchant
Bank Bhd.'s BB long-term and B short-term counterparty
ratings on CreditWatch with negative implications.

The major shareholder of the bank, Arab-Malaysian
Corporation Bhd. (or Amcorp), has recently secured court
protection from creditors as it attempts to sell its stake
in AMMB Holdings Bhd., the group's holding company. The
Arab-Malaysian Merchant Bank is a 100% owed subsidiary of
AMMB Holdings.

The Asian Wall Street Journal reported that Standard &
Poor's sources indicated that as both Amcorp and AMMB
Holdings are highly leveraged, the capacity of these
companies to provide capital or liquidity support to the
Arab-Malaysian Merchant Bank is uncertain.


CHATEAU HORIZON SDN BHD: Winding-up petition
--------------------------------------------
Faber Union Sdn Bhd on 26/6/98 petitioned for the winding-
up of Chateau Horizon Sdn Bhd. The petition is directed to
be heard on 20/8/98.


KEDAH CEMENT: International interest grows for firm
---------------------------------------------------
According to the SCMP of July 22, international cement
manufacturers are seeking to buy control of Malaysia's
Kedah Cement Holdings. This transaction would result in a
25 per cent stake in the country's production of cement.

An official at one of Kedah's two biggest shareholders said
Holderbank Financiere Glarus of Switzerland, Lafarge of
France, Britain's Blue Circle Industries, Heidelberger
Zement of Germany, and Cemex de CV of Mexico were examining
prospects for the purchase of a stake in the company.

Holderbank this month said it was investing US$210 million
in the Philippines' Union Cement Corp.


PERAK HUMAN RESOURCES SDN BHD: Winding-up petition
--------------------------------------------------
First Travel & Tours (M) Sdn Bhd on 17/7/98 petitioned for
the winding-up of Perak Human Resources Sdn Bhd.


RENONG: Seeks debt relief on put option
---------------------------------------
An article in the SCMP of July 22 says Renong, Malaysia's
biggest construction group, became the latest high-profile
company to seek debt relief as it asked creditors not to
exercise a M$1.1 billion (about HK$2.06 billion) put
option.

The option requires Renong to buy 112 million shares of its
Time Engineering unit from creditors for $9.80 each. That
is 26 times the market price of Time's shares, which fell
to a record low of 38.5 cents on July 10, when they were
halted from trading.

Concerns about Renong's financial woes have spilled over to
other companies in its group. Shares of United Engineers
Malaysia fell 20 cents, or 15 per cent to $1.10 yesterday,
the lowest since it sold shares to the public in May 1988.
Faber Group, which owns and manages the Sheraton Hotel
chain in Malaysia, fell two cents or 5.3 per cent to 35.5
cents.

Renong's appeal to option holders came as the company -
which has businesses in power generation,
telecommunications, financial services, real estate and
construction - is trying to raise cash to stave off the
creditors of an estimated $7 billion worth of loans.

The options - priced in US dollars - were sold to creditors
who lent money to a Renong unit.

Renong halted trading in its shares on July 10, pending an
announcement.


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

PHILIPPINE AIRLINES: PAL losses quadruple to $73m
-------------------------------------------------
According to the Hong Kong Standard of July 21, Philippine
Airlines said its preliminary net loss in the first two
months is nearly four times the 101.2 million peso loss
posted in the same period last year. The flag carrier's
fiscal year starts on April 1.

The company predicted yesterday that its bottom line would
be much worse because of the massive disruption in
operations caused by a 22-day pilots' strike in June which
forced the airline to downsize its operations and suspend
debt payments.

According to a news summary in the SCMP of July 21, loss-
making PAL will be given an additional 50 days to forge a
viable rehabilitation plan to avoid bankruptcy. This came
as PAL announced yesterday it was increasing its flights
despite a crippling three-week pilots' strike.


SAN MIGUEL: Chairman asks for mass resignations from execs
----------------------------------------------------------
The SCMP of July 22 says San Miguel chairman Eduardo
Cojuangco has asked more than 100 of the brewing company's
executives to resign, according to management sources.

They said president Francisco Eizmendi had also been asked
to resign.

Mr Cojuangco was voted chairman and chief executive on July
7. He is a political patron - and allegedly the biggest
financier - of President Joseph Estrada.


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

BANGKOK BANK: Losses increase concern on sector
-----------------------------------------------
The Asian Wall Street Journal reported that first half year
postings show losses that raise increased concerns about
the stability of Thailand's banking sector. Analysts quoted
stated that further loss of investor confidence in these
banks could make it difficult for them to raise the
additional equity funding that they need to survive in
their current form.

Expectation is that the second half of the year will also
produce worse showings.

Thailand's largest bank, Bangkok Bank PLC (which accounts
for approximately 20 percent of the entire national banking
system) posted a loss of 16.39 billion baht ($400.1
million). Last year the bank posted a profit of 8.7 billion
baht.


PHOENIX PULP & PAPER: Authorities order closing of firm
-------------------------------------------------------
The SCMP of July 22 says Thai authorities have ordered the
partial closure of Phoenix Pulp & Paper, the country's
largest paper mill, giving the firm a 180-day deadline to
improve its pollution-treatment system.

"This is not a permanent closure," Thai Deputy Prime
Minister Suwit Khunkitti said yesterday. "If they can
improve their water treatment and waste water disposal
systems they can reopen."


SIAM COMMERCE BANK: Losses increase concern on sector
-----------------------------------------------------
The Asian Wall Street Journal reported that first half year
postings show losses that raise increased concerns about
the stability of Thailand's banking sector. Analysts quoted
stated that further loss of investor confidence in these
banks could make it difficult for them to raise the
additional equity funding that they need to survive in
their current form.

Expectation is that the second half of the year will also
produce worse showings.

The Siam Commerce Bank PLC posted a 8.31 billion baht loss
(last year it had a 3.68 billion baht profit).


THAI DANU BANK: Losses increase concern on sector
-------------------------------------------------
The Asian Wall Street Journal reported that first half year
postings show losses that raise increased concerns about
the stability of Thailand's banking sector. Analysts quoted
stated that further loss of investor confidence in these
banks could make it difficult for them to raise the
additional equity funding that they need to survive in
their current form.

Expectation is that the second half of the year will also
produce worse showings.

The Thai Danu Bank PLC posted a 5.04 billion baht loss
(last year it had a 678 million baht profit).


THAI FARMERS BANK: Losses increase concern on sector
----------------------------------------------------
The Asian Wall Street Journal reported that first half year
postings show losses that raise increased concerns about
the stability of Thailand's banking sector. Analysts quoted
stated that further loss of investor confidence in these
banks could make it difficult for them to raise the
additional equity funding that they need to survive in
their current form.

Expectation is that the second half of the year will also
produce worse showings.

The Thai Farmers Bank PLC posted a 3.96 billion baht loss
(last year it had a 6.25 billion baht profit).


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.

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