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October 05, 1999 atimes.com
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Business in Asia Today

Debt workout for 7 Daewoo firms to be decided in October
SEOUL - The main domestic creditor banks of South Korea's troubled Daewoo Group said Monday that they will announce debt workout programs for seven Daewoo companies that have the potential for early recovery by the end of this month. Creditors will take over the group's 7.5-percent stake in Daewoo Electronics and map out restructuring details after separating the firm from the parent group. They will also divide Daewoo Heavy Industries into shipping, machinery and other operations and set up workout plans separately for each division. TDX operations will be separated from Daewoo Telecom and Orion Electric will secede from the parent group by the end of the month and sold off by December. Creditors will deal with Daewoo Electronic Components along with Daewoo Electronics and sell its shares within the month. Workout details for Keangnam Enterprises will also be decided within the month. Ssangyong Motor was to have merged with Daewoo Motor but the former will instead be sold off to another party. Workout programs for five other key Daewoo companies - Daewoo Corp (03810), Daewoo Motor, Daewoo Motor Sales (04550), Daewoo Capital Management, and Diners Club Korea - will be decided by November 6.

S Korea's Goldbank attracts $18.1m in foreign investments
SEOUL - South Korea's Internet service company Goldbank Communications said Monday that it has secured 22 billion won ($18.1 million) in foreign investment from Malaysia's RYLZ, an investment fund management company investing in Internet venture firms in Asia. Goldbank will use the money to establish an integrated computer system and strengthen its entertainment businesses like the Internet music. It will also support venture companies with the fund through a venture support center to be established soon.

S Korea's Hanjin Group fined $445m for tax evasion
SEOUL - South Korea's National Tax Service (NTS) Monday fined the Hanjin Group, its honorary chairman Cho Choong-hoon and his two sons 541.6 billion won ($445.3 million) for unreported income of 1.08 trillion won, with both figures record highs for a domestic conglomerate. The NTS also referred Cho, his two sons and two Hanjin affiliates to the prosecution on charges of tax evasion and violation of the foreign exchange control law. The tax authority said Korean Air (KSE: 03490), the flagship firm of the Hanjin Group, received huge kickbacks from an unnamed foreign transaction partner from 1991 to last year for mounting engines manufactured by a US company on its airplanes.

Daewoo Corp's cement plant in China runs at 100%
SEOUL - South Korea's Daewoo Corp (KSE: 03810) said Monday that Daewoo-Shandong Cement Co in Shandong, China, is operating at 100 percent of its capacity of 2.5 million tons per year. Daewoo, which wholly owns the factory, said its affiliate signed a contract to ship 1.8 million tons of cement to Cemex Co, the largest cement supplier in the United States, within the year. Daewoo-Shandong Cement, which launched operations in 1997, is the largest single cement producer in China with a capital of $100 million, Daewoo officials said.

S Korea's Hanjung to build thermal power plants in India
SEOUL - Korea Heavy Construction and Industries (Hanjung) has signed a $460 million contract to build two coal-burning power plants for BPCL of India. The thermal power plants will be capable of generating 250 megawatts of electricity and are to be located near Calcutta. Work on the turnkey project will start in December and is due for completion in June 2003. The firm has previously built two power plants in India, including a 515 megawatt co-generation unit.

Bank of Japan to offer special loans to Niigata Chuo Bank
TOKYO - The Bank of Japan will offer uncollateralized loans to Niigata Chuo Bank (TSE:8538) from Monday. The loans, requested by Finance Minister Kiichi Miyazawa, are expected to enable the troubled regional lender to continue repayment of deposits and debts to other banks. The BOJ lent the bank 9.8 billion yen ($92.15 million) Friday when it defaulted on debts in the bank's checking account with the BOJ. The account is used to settle payments between financial firms. That money will be switched to special loans, to be collected later from Niigata Chuo, Yoshiharu Obata, executive director of the central bank, said.

DDI, Japan Telecom, Vodafone buy Nissan's Tu-Ka stake
TOKYO - DDI Corp has acquired the stake held by Nissan Motor Co in three Tu-Ka cellular phone firms, completing a deal that was announced in August. Japan Telecom Co and a member of the Vodafone Airtouch Plc group also bought most of Nissan's stake in six Digital Tu-Ka telephone firms. With the acquisition, DDI now has a 53.2 percent stake in Tu-Ka Cellular Tokyo Inc, 53.7 percent in Tu-Ka Cellular Tokai Co and 51.5 percent stake in Tu-Ka Phone Kansai Inc after acquiring shares from Hitachi and Kobe Steel in the Kansai firm. DDI spent 28.1 billion yen ($265 million) on the purchases.

Asia Online buys three ISPs in Australia, New Zealand
SYDNEY - Internet firm, Asia Online Ltd, will invest about A$30 million (US$19.63 million) in Australia and New Zealand by the end of the year. Part of the investment includes the buying of three Internet service providers: Melbourne-based Internet Access Australia, InterAct in Canberra and Auckland's Internet Company of New Zealand. Asia Online, which has also made acquisitions in Hong Kong and the Philippines, is seeking to expand in Australasia.

Share price of Australia's Biota drops
MELBOURNE - Biota Holdings Ltd (ASX:BTA) shares fell Monday in reaction to a subsidy rebuff in the United Kingdom for its anti-influenza drug Relenza. But analysts and the biotechnology company do not believe the decision not to include Relenza on the National Health Service list of government-subsidized drugs was final. ''It's a negative but it's, I think, probably the first round in a bit of arm wrestling between [drug co-developer] Glaxo Wellcome and the UK government'', Intersuisse director of research Howard Elton said.

Philippines PCI Bank lays off 30% of employees
MANILA - After using employee pension funds to help to buy shares in Philippines PCI Bank, the newly-merged Equitable-PCI bank is laying off staff. Former senator Ernesto F Herrera said Equitable PCI Bank had started downsizing its workforce by 30 percent. ''They used workers' money in the buy-in of PCI which helped pave the way for the merger, and now ironically, over 2,000 bank employees whose contributions these GFIs used, will lose their jobs'', he said. He also noted the purchase of the shares in May was made more suspicious by the fact that it pre-empted a scheduled bidding for the shares in June.

Pilipinas Shell Petroleum drops price of LPG, diesel
MANILA - Pilipinas Shell Petroleum Corporation has cut prices of its liquefied petroleum gas (LPG) and diesel starting at noon on October 1. LPG prices were cut by 4 pesos per 11 kg cylinder or 36 centavos per kg and the price of diesel, by six centavos per liter. The firm said the price cuts were a response to competitive pressures, considering the market for both products were price sensitive. The prices of select petroleum products were however realigned, increasing pump prices.The firm said this was reflective of higher crude oil prices.

India's Tata Group disinvests stake in Goodlass Nerolac
MUMBAI - Tata Group's Forbes Gokak Ltd (FGL) will divest its shareholdings and those of its associates in Goodlass Nerolac Paints Ltd to collaborator Kansai Paint Co Ltd of Japan. The 28.56 percent stake of the main promoters, Forbes Gokak and associates, would be divested for Rs985.6 million ($22.62 million) at Rs250 a share, Forbes Gokak said in a statement. The divestment would enable use of the realized funds in a manner that would directly benefit FGL's own shareholders, the firm said. The transfer of shares is subject to relevant government and other approvals.

IPO by HSSL of India generates huge demand
MUMBASI - Hughes Software Systems Ltd's (HSSL) public issue of shares through the book-building route, created history Thursday with the demand touching 24 times the offer of 39,37,500 shares in a price band of Rs480 to Rs630 per share. The HSSL issue attracted a demand for over 97.5 million shares aggregating Rs60 billion ($1.4 billion) in the book-building route, and given the overwhelming demand the company and the book-running lead manager had decided on the price of Rs630 per share, HSSL said.

OECF, Japan EXIM Bank merge operations in India
NEW DELHI - Japanese multilateral funding agency Overseas Economic Cooperation Fund (OECF) and Japan Export and Import Bank (Japan EXIM) have merged their Indian operations as part of a worldwide merger. The government-to-government lending by OECF and semi-commercial financing by Japan EXIM would continue as before under a new entity - Japan Bank for International Cooperation. The new entity will conduct its operations on two strictly separate accounts for International Financial Operations formerly performed by Japan EXIM and OECF.

Pakistan's United Bank signs MoU with Money Gram
KARACHI - A Memorandum of Understanding (MoU) has been signed between United Bank Limited (UBL) and Money Gram Payment Systems Inc of the United States, under which UBL will become a sending and receiving agent for Money Gram services in Pakistan. UBL plans to make the Money Gram service available at select branches in Pakistan and abroad. Javed Iqbal, UBL's Premier Consumer Banking head said the service will enable Pakistanis living overseas to send money to beneficiaries back home in an efficient and speedy manner.

(Asia Pulse)


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