Anatomy of a successful financial restructure: PSL – a case study

By Khalid Hashim

WHO could have imagined that the Asian Tigers would collapse in the middle of their sprint? Who in their right minds would have predicted Singapore, Korea, Taiwan, Malaysia & Thailand, which all had been growing at an astounding rate year on year during the nineties, would suddenly contract? Who possibly could have imagined that the once rock-steady exchange rates of the Far Eastern Tiger economies would implode? But the fact is that all of this happened in 1997, and when it did, no one knew what hit them.

What started as an isolated case in Thailand in July 1997 quickly spread like wild fire, engulfing in its wake such giants like South Korea and Singapore which had only recently been admitted into the elite OECD Club! Not a single country in the entire Far East was spared, with the possible exception of China which managed to hold out on its own with minimal damages. All others suffered badly and a number of corporates could not survive, leading to widespread job losses. The West was not spared either, though the impact on their economies was not as severe.

In this traumatic period one word which caught the fancy of everybody was “re-structuring” or more specifically, “financial re-structuring”. This became the magic mantra for every company attempting to recover from the dumps; Ofcourse, not all succeeded. What set apart the successful ones was their ability to identify the problems early on, and their willingness to take onboard all concerned parties through transparent and effective communications.

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