Life after the crisis: Asia moves on
Korea: Hanwha Chemical Corporation
Indonesia: Astra International
Total Access Communications (TAC), Thailand's second largest cellular provider, was the first Thai corporate to start restructuring. As part of this its first task was convincing its creditors that they would be paid. Although it had substantial cashflow, it also had a large debt burden of $1.1 billion and a severe currency mismatch on its balance sheet.
After long discussions with a group of 50 international banks, it successfully extended the repayment period for $537.7 million of its bank debts until November 2004. Since then it has fast-tracked through its payments and is attracting a new client base to strengthen its business.
The company's indebtedness was a worry to the banks but the company's openness assuaged their fears. "We put them at ease and showed good faith," says Wong Fan Voon, senior vice-president in corporate finance at TAC. It never discussed offering a discount on what it owed but focused on how and when to pay its bank lenders back.
It agreed to quarterly amortized debt repayments based on cashflow over five years and agreed that any excess cashflow above its operational requirement and agreed debt service would be paid to the banks.