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June 11, 1999atimes.com
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S.Korea's Hanwha offers over $1.7bn for Korea Life
SEOUL - South Korea's Hanwha Group has offered a bid of over 2 trillion won ($1.7 billion) for Korea Life Insurance, raising its chances of winning the auction for the ailing company, the group's top executive said on Thursday.Kim Seung-youn said his conglomerate bid more than 2 trillion won, the minimum price set by the government for the sale, in the second bidding for Korea Life.Hanwha will pay up to 700 billion won, while the remaining sum will come from other consortium members that include two Japanese life insurers, Orix Group and the World Bank Group unit International Finance Corporation.A confident Kim said his group was the most suitable to win the bidding, but expressed concern that the auction may be aborted like the first one in May.The second bidding for the country's third-largest life insurer drew eight offers. AMCO Service of the United States, in consortium with Cushman and Wakefield and Prudential Life, is another major bidder, as are the team of Novecon Financial Ltd. and Tucker and Associates, which has Hartford Life under its arm.The Hong Kong-based Regent Pacific Group also figures prominently in the bidding.

Indonesia in world's worst banking crisis since '70s: S&P
JAKARTA - Indonesia is suffering the world's worst banking crisis since the 1970s, when measured on a fiscal cost-to-gross-GDP basis, and may take up to a decade to fully recover.Standard & Poor's estimates that Indonesia's crisis will consume an up-front fiscal cost, defined as funds provided by the government to initially recapitalize or pay out creditors ot distressed banks, equivalent to $87 billion or 82% of GDP.This figure, which is 24% higher than the Indonesian government's own estimate, places the cost ot Indonesia's banking crisis among the highest of financial crises transpiring in the past two decades.An expectation that the Indonesian banking sector's non-performing loans-to-total loans will reach about 75%-85% by the end of 1999 supports the view that the recovery of Indonesia's banking sector, back to its precrisis position, will be protracted.

Korean auto makers get aggressive in America
SEOUL - South Korea's auto makers, encouraged by the recent upsurge in sales in North America, will step up their marketing there this year through more sales outlets.Industry sources said Thursday that Daewoo Motor, which made its debut in the U.S. market last year, expanded its marketing to Canada by setting up "Daewoo Auto Canada" in April.South Korea's second-largest automaker plans to expand sales outlets from the current 11 to 20 by the end of this month and to over 40 in Canada this year. The number of its U.S. outlets will rise to 290 from the current 50.Daewoo is marketing three of its cars in the U.S. market -the Leganza, Lanos and Nubira - but is poised to introduce additional models such as the sports-utility vehicle Korando and a new model still being developed.Kia Motors (KSE: 00270) is also getting aggressive in Canada by setting up its own dealerships there. The firm was exporting its cars through Ford Canada under Ford's brand names.The firm plans to expand the number of sales outlets in Canada to 120 from the current 40 to achieve its target of 20,000 cars there this year.

POSCO's remodeled steel plant rolling again
SEOUL - South Korea's Pohang Iron and Steel Co., or POSCO (KSE: 05490), says its first cold-rolled steel plant is operating again after being remodeled for production of high value-added products.Under the renovation, which cost POSCO 140 billion won ($120.06 million) since 1997, the plant now only manufactures thin cold-rolled steel products.The plant has an annual production capacity of 1.15 million tons of thin cold-rolled products with a thickness of 0.18 mm or less.POSCO said it restarted operations at the plant to meet increasing requirements for high-end products, including steel beer cans.

Firms target $20bn reconstruction in Balkans
SEOUL - South Korea's overseas construction industry is eyeing reconstruction projects in the Balkans, especially in the war-torn Yugoslavia, reportedly worth around $20 billion.The Construction and Transportation Ministry is working on a plan for Korean overseas builders to secure in Serbia and Kosovo reconstruction projects, under a cooperative arrangement with overseas Korean diplomatic missions amid the conclusion of a peace treaty between the North Atlantic Treaty Organization (NATO) and Yugoslavia.The ministry has already asked the International Contractors Association of Korea to take a look at the situation and recommend strategies for Korean firms to advance into the Balkans and win projects there.The construction sector is already aware of opportunities there, with 1,100 structures in Belgrade alone destroyed in addition to heavy damage to roads, bridges and other infrastructure in Yugoslavia.

Corporate restructuring to conclude this year
SEOUL - South Korea will conclude corporate restructuring this year and then embark on a drive to promote industrial streamlining aimed at the fundamental overhaul of the country's economic structure.Commerce, Industry and Energy Minister Chung Duck-koo said Thursday that the government will strive to improve conditions to raise capital after corporate restructuring is concluded, and reshape the industrial structure by promoting the high-added value of core industries.Chung was making a keynote speech on the direction of industrial policy for the new millennium at a policy seminar.Numerous small-scale exporters related to venture companies will be promoted by strengthening the function of venture capital, he said.The goal of industrial policy will be oriented towards improving competitiveness through technological prowess, he added.

Hyundai firms win $280m oil tanker contract
SEOUL - South Korea's Hyundai Heavy Industries Co. andHyundai Corp. have won a contract to build eight113,000-ton-class oil tankers for OSG of the U.S. for $280million. Hyundai Heavy Industries has clinched $1.3 billionin orders for over 23 vessels thus far this year. The companyexpects to conclude contracts for another four to five ordersthis month.

Shipyards feel challenge from China
SEOUL - South Korea's shipyards have secured orders enough to last for two years, totaling 19.1 million tons as of May 31, compared with the industry's average annual capacity 10 million tons, industry sources said Thursday.The outlook for new ship orders this year, however, is bleak with only 7 million tons or 70 percent of the 10 million tons targeted.The slowdown is partly caused by the proposed sale of the shipyard of Daewoo Heavy Industries and the bankruptcy of Halla Heavy Industries.Also to blame are the large volume of orders already placed around the world and growing competition from Chinese and Japanese shipyards, especially in view of the expansion of Chinese shipyards, forcing shipping firms to watch where the market is headed before placing further orders.New ship orders secured by Korean yards as of May 31 totalled 2.2 million tons over 45 ships, just 56 percent of those a year earlier.

Asian Banking Corp. hikes capital by $42m
SEOUL - South Korea's Asian Banking Corp. said Thursday that it has raised its paid-in capital by 50 billion won ($42.88 million), raising its BIS-set capital adequacy ratio to over 11 percent.The merchant bank received subscriptions for new shares Monday and Tuesday.Asian Banking is also seeking foreign capital in a bid to diversify its local operations. It also plans to establish a cyber-brokerage house with a local securities company.

Japan sees net cash outflow of $12.27bn in May
TOKYO - Japan saw a net capital outflow for the second consecutive month in May as Japanese investment in overseas securities outpaced foreign investment in Japanese instruments, the Ministry of Finance said in a report released Thursday.The outflow totalled 1.49 trillion yen ($12.27 billion).May's capital outflow, though less than half April's 3.40 trillion yen, was brought about mainly by continued investment in U.S. stocks and other overseas securities by domestic institutional investors.

Moody's downgrades five Japanese life insurers
TOKYO - Moody's Investors Service has lowered by one notcheach the insurance financial strength ratings of five midsizeJapanese life insurers. The firms are Chiyoda Mutual Life,Daihyaku Mutual Life, Kyoei Life, Toho Mutual Life and TokyoMutual Life. The ratings for Chiyoda, Daihyaku and Kyoei werelowered to Caa1, from B3. Toho's rating was lowered to Caa2,from Caa1, and Tokyo Mutual's to B3, from B2. Moody's citedthe outlook for more stringent reserve guidelines covering badloans and the growing likelihood of a compulsory reduction inguaranteed yields at financially shaky insurers.

Indonesia's Bimantara Citra sells telcom stake
JAKARTA - PT Bimantara Citra Tbk (JSX:BMTR) has sold a 5% stake in PT Bimagraha Telekomindo worthRp16.6 billion ($2.1 million) in a bid to reduce last year's consolidated loss of Rp381.55 billion. In the firstquarter of this year, Bimantara reported a loss of Rp136billion against Rp39 billion a year earlier. A source told theBisnis Indonesia daily that Germany's DeteMobil and PT ArthaGraha Investama Sentral (AGIS) were possible buyers of theshares.

Vietnam opens bidding for Hanoi transport consultancy
HANOI - Vietnam has opened bidding for a $23.4 millionHanoi urban transport system consultancy contract. The projectaims to improve Hanoi's transport management system bybuilding 42km of traffic corridors and new intersections,and by installing traffic lights at 67 junctions. Fourconsultant companies have registered to take part in thebidding, including a joint venture between Danish company COWIand Vietnam's Hadecon; MVA Asia Ltd. of England; U.S. LouisBerger of the U.S. and Indian company Rites. The project to improvethe capital's transport network will be 90 percent funded bythe World Bank, with the remaining 10 percent coming from thegovernment.

France's Groupe Moulinex to set up JV in India
NEW DELHI - French home appliances major Groupe Moulinexwill set up a joint venture for its Indian operations by Aprilnext year. The company had entered into a technical andmarketing arrangement only last month with domestic smallappliances manufacturer Gravs Appliances Limited, and hasalready introduced food processors, microwave ovens and mixer/grinders via this arrangement in India. Officials said theFrench company, which would hold a majority stake in theventure, was targeting a sales turnover of R1 billion($23.41 million) over the next three years in India.

India's PFC approves $261m loan for Naptha Jhakri
NEW DELHI - India's state-owned Power Finance Corporation(PFC) has approved a loan of Rs11.18 billion ($261.7million) to state-owned Naptha Jhakri Power Corporation (NJPC)for a major ongoing power project in the northern state ofHimachal Pradesh. The amount is part of the disbursementtarget of Rs23.60 billion during 1999-2000 by PFC,corporation sources said. NJPC's hydro project, which is beingset up in Kinnaur-Shimla district of Himachal Pradesh,consists of six units of 250 mw. About 50 percent of civilwork for the power project has been completed and it isscheduled to be completed by March 2002.

Dabur sells stake in confectioner
NEW DELHI - India's leading fast moving consumer goods giant Dabur India Ltd. has sold its 49 percent stake in confectionery joint ventureGeneral De Confiteris India Ltd. (GCIL)to its Spanish partner Agrolimen for Rs350.24 million ($8.2 million).With this sell-off GCIL has become 100 percent subsidiary of Argolimen and Dabur's nominee directors have resigned from the board of GCIL."The disinvestment is in line with Dabur's strategy to concentrate on areas of its core competence," Dabur India director P.D. Narang said.

India's April sugar production up 50%
NEW DELHI - India's sugar production has registered an increase of 50 percent at 1.8 million tonnes in April as against 1.2 million tonnes produced during the same period last year.The total sugar production during the current sugar season rose to 14.2 million tonnes as against 12.2 million tonnes during the last year.

Singapore Technologies Electronics divests Smart Asia stake
The board of directors of Singapore Technologies Engineering Ltd. (ST Engg) has announced that its wholly-owned subsidiary, Singapore Technologies Electronics Limited (ST Elect) has divested its 45% shareholding representing 4,500 shares of HK$1.00 each in Smart Asia Limited (SAL), an investment holding company incorporated in Hong Kong. SAL was set up in 15 March 1994 to carry on the business of voice response systems in China.The sale of the shares is to Universal Appliances Limited, the other shareholder of SAL.

Malaysia's MESB discusses overseas power projects
KUALA LUMPUR - MESB Bhd, which constructs power lines andsubstations, is discussing a joint venture proposal with aparty which is already involved in the power line business inSaudi Arabia. Executive director S. Sivayogarajasingam said hehoped the proposed venture would be formed this year to bidfor a 110-km long 180KV transmission line project in SaudiArabia. MESB is in the pre-qualification stage in its bid forpackages in a 360-km 115 KV transmission line project in Laos.

Emirates group plans to supply gas to Pakistan
ISLAMABAD - United Emirates Offset Group (UOG) will submita proposal to the Pakistani government for the supply andtransmission of 1.0 billion to 1.5 billion cubic feet ofnatural gas per day to Pakistan as part of the group'sinitiative to invest in the country's energy sector under itsDolphin program. The program covers activity along the"gas value chain" from the development of gas reserves to thecreation of new industrial zones fueled by power generated bythe gas piped from those fields.

(Asia Pulse)


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