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January 19, 1999atimes.com
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Business in Asia Today


Foreign, Korean firms likely to bid for HANJUNG
SEOUL - The South Korean government is expected to ask both domestic and foreign companies to take part in an open bidding as early as this month to sell off its stake in the giantstate-invested Korea Heavy Industries and Construction (HANJUNG).

The result of the deal - the government's first bid toprivatize the country's public corporations - could changeKorea's corporate landscape. (See Northeast Asia page.)

Tenders to be invited for gas mega-project
JAKARTA - Indonesia's West Natuna gas contractors will soon hold a tender for the construction of the underwater pipeline megaproject to channel natural gas from the gas field west of the Natuna islands to Singapore. Invitations for the tender are expected to be sent to prospective bidders later this month.

A legislator of the ruling Golkar group, Priyo Budi Santoso, said eight companies had qualified for the final tender. He named McDermott, Global Allseas of the United States; Saipem of Italy; EPPM of France; Japan's Nippon Steel; South Korea's Hyundai and Daewoo.

Priyo said the tender's terms, which Asian companies complained about, stipulated, among other things, that the contractors should have a track record of building at least three pipelines of the same length as the West Natuna pipeline over the past five years.

Coca-Cola aims for single bottling system in Japan
TOKYO - The president of Coca-Cola (Japan) Co said the Coca-Cola group may accelerate restructuring of bottlers in Japan, following an agreement between Kita Kyushu Coca-Cola Bottling Co. (TSE:2579) and Sanyo Coca-Cola Bottling Co. (TSE:2574) to merge on July 1.

Michael W. Hall, who is also an executive for the U.S.parent, said he is pursuing Coca-Cola's strategy of building a single bottling system in each country.The strategy is designed to maximise value for shareholders, business partners and consumers.Japan is a profitable country for the Coca-Cola group but business inefficiencies remain, Hall said.

Indonesian domestic auto sales crash 83%
JAKARTA - Indonesian domestic automobile sales in 1998 nosedived 83 percent, according to the latest report from the Association of Indonesian Automotive Industries.The 68,413 vehicles sold consisted of 46,398 commercial cars and 11,613 passenger cars. December was the worst sales month of 1998 with 1,813 unitsmoving from showrooms, down from 2,394 in November.

Japan's TTNet, Astel Tokyo to merge
TOKYO - Tokyo Telecommunication Network Co., known as TTNet, and Astel Tokyo Corp. have signed an agreement to merge on April 1. The deal, due to be endorsed by the companies' extraordinary shareholders meetings on Jan. 29, paves the way for TTNet to take over Astel Tokyo's troubled personal handyphone system (PHS) operations.

The deal will involve exchanging five Astel Tokyo shares for one TTNet share. The PHS service firm is expected to have interest-bearing debt totaling 150 billion yen at the end of March.But financial assistance from its major shareholders, including Tokyo Electric Power Co. (TSE:9501), Mitsui & Co. (TSE:8031) and Mitsubishi Corp. (TSE:8058), should enable it to wipe out its cumulative loss and repay all its debts prior to the merger.

Vodaphone on the march in Korea
SEOUL- Britain's largest mobile phone company, Vodafone, emerged as the third major shareholder of Shinsegi Telecomm by acquiring AirTouch Communications of the United States, which is the Korean telecom company's third major shareholder with a 10.6-per cent stake.

Business sources predicted that Vodafone may emerge as Shinsegi's major shareholder by acquiring stakes held by Korean major shareholders including Pohang Iron & Steel Co.(KSE:05490) and Kolon Group.

United Airlines to suspend Indian flights
NEW DELHI - U.S. carrier United Airlines (U.A.) says it will suspend operations in India from April 4 because of "disappointing profitability". The airline operates in India only through Delhi.

U.A. country director David Solloway said the airline had decided to "temporarily suspend" its daily flights between London-Delhi and Hong Kong-Delhi on account of disappointing profitability and the likely slowdown in traffic during India's lean summer season.

Korea expects investment-grade rating from S&P
SEOUL - A delegation from Standard and Poor's has confirmed the viability of South Korea's corporate restructuring, raising the prospect that the credit rating firm will move to hike the country's ratings to investment grade, according to the Ministry of Finance and Economy.

The delegation visited South Korea last week to conduct research activities for a possible upgrade. Ministry officials said Standard and Poor's officials deemed local companies' plans to reduce liabilities credible. The rating firm enhanced its outlook for South Korea to positive from stable on January 4.

Korean banks fare poorly in rankings
SEOUL - South Korean banks made a rather poor showing on Euromoney's ranking of the top 100 Asian banks, banking sources said Monday. Fourteen Korean banks made the top 100 in Euromoney's latest ranking based on information from British credit rating agency Fitch-IBCA, down five from the 19 recorded in 1997.

Those that didn't make the cut include Korea First Bank, Boram, Dongwha, Kyong Nam, KorAm and Kyonggi. Boram merged with Hana this month and Dongwha and Kyonggi went belly up in June of last year. A newcomer on the list was Kwang Ju with an entry at 95th place while Kookmin advanced by three notches to 26th from 29th in 1997.

Twelve other Korean banks were downgraded: Seoul Bank, due to be sold to a foreign bank this month, plummeted by 50 notches to 86th. Korea Development Bank stepped down one notch to 16th from 15th in 1998, but retained the highest ranking among Korean banks. Korea Exchange Bank followed, but retreated from 16th to 22nd.

New Delhi allows BBC to set up 100% subsidiary
NEW DELHI - The Indian government has allowed BBC World, the television wing of British Broadcasting Corporation (BBC), to set up a 100 percent subsidiary in India, to be known as BBC Worldwide India. The British broadcaster, at the time of seeking permission, stated that the subsidiary would mainly undertake marketing and air-times sales activities.

Until mid-1998, BBC was marketed in India by Star TV's India office. BBC World joins the likes of Star TV, Sony Entertainment TV and Zee TV, which have subsidiaries incoprorated in the country, to undertake marketing and television software production activities.


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