Deals of the year - Top quality issuers succeed in demanding markets
|
| Ferguson: failure was not an option |
Placing 6.2 billion shares for the recapitalization of the Siam Commercial Bank (SCB) - Thailand's fourth-largest bank - in April 1991 was a task that many in the market considered almost impossible. The deal had to contend with the ghosts of previous recapitalizations involving foreign investors, such as Goldman Sachs' $860 million deal for Thai Farmers Bank and Morgan Stanley's $1.04 billion sale for Bangkok Bank - Thailand's third-biggest and biggest banks respectively.
Last April, when SCB's offering was launched, both those issues were trading below water, despite late rallies in Thai banking stocks. "It was a pretty difficult time. The market was predisposed to be really sceptical, given that investors had quickly lost up to 80% of the value of their investments in the two previous deals," recalls Scott Ferguson, head of equity capital markets at Salomon Smith Barney Asian headquarters in Hong Kong.
Salomon had won the mandate back in May 1998 and found no other bank was interested.