The largest supplier of jet fuel to airlines in the mainland will pay back at least half the US$530 million of debt after previously offering 41.5 US cents on the dollar. It will also complete the payments in less than the eight years offered earlier, the sources said.

China Aviation Oil (CAO), 60 percent owned by Beijing, needs more than half its creditors to accept the plan at a June 10 meeting, or risk being liquidated. The company's failure, Singapore's largest financial scandal since trader Nick Leeson caused the collapse of Barings in 1995, highlights the lack of transparency at many mainland and mainland-related companies, Standard & Poor's said December 3.

``From the Chinese government's point of view, it is important to contain this case after that public relations fiasco,'' said Michael Preiss, director at Asia Bond Market Forum, which advises the governments of Hong Kong, South Korea and Thailand on developing local currency bond markets. Its parent, owned by the central government, may increase its proposed investment in the company, the sources said.

CAO spokesman Gerald Woon declined to comment.

``There could be an announcement later this week,'' said Bian Hui, a spokesman for the Beijing-based parent.

David Gerald, president of the Securities Investors' Association Singapore, which represents more than 63,000 individual shareholders, said creditors should be ``reasonable'' and accept the revised plan.

``What will they get if they walk away? The company will go into liquidation,'' Gerald said Wednesday. CAO, which had been engaging in speculative trading on oil prices, ran up losses as surging demand for oil and concerns the Iraq war and terrorist attacks may disrupt supply pushed the price of crude oil traded in New York to as high as US$55.17 a barrel in October, a record at the time. The company suspended its shares November 29, after the stock slumped 32 percent that month, and sought court protection in December.

Creditors such as Standard Bank London, SK Corp and Sumitomo Mitsui Banking Corp have said the oil trader's state-owned mainland parent should provide more assistance to the company. ``There's a limit to how much the parent company can do,'' Gerald said. ``There is no point walking away from a revised offer because you get nothing in the end.''

In January, the company owed about US$530 million to about 100 creditors. It offered to pay US$100 million up front and US$120 million over eight years. Its parent, China Aviation Oil Holding, offered to convert part of a loan to its unit into equity and invest a further US$100 million with a partner.

China Aviation Oil Holding is still in talks with Singapore's Temasek Holdings about a possible joint investment in the oil trader, Bian said.

Temasek spokeswoman Rachel Lin said the investment agency is in contact with China Aviation Oil Holding. She declined to elaborate.

Creditors representing 47 percent of the company's debt rejected the existing plan, according to a document submitted to Singapore's High Court on April 1 by SK Energy Asia, a unit of South Korea's largest oil refiner SK Corp.

SK Energy, which is owed US$14.3 million, is seeking to place the jet-fuel trader under judicial management. SK Energy's petition will be heard by a Singapore court on May 26.

``The hearing on our judicial management request will largely depend on whether a majority of creditors accept the revised plan,'' said J K Min, senior manager at SK Energy.

BLOOMBERG