Guanxi disrupted in O&M debt revamps

GUANXI, or relationship building, is considered to be the difference between doing business in the East and in the West. One noteholder told The Business Times that he decided to pick up S$500,000 of Singapore dollar notes issued by Nam Cheong because he was building on his block of trust in Malaysian tycoon Tiong Su Kouk.

Ezion Holdings has likewise benefited from its chief executive Chew Thiam Keng's clean image as a good Christian man. This, together with the added bonus of Mr Chew's training as a former banker, is believed to have weighed in the company's favour when it was raising debt financing to fund its expansion.

But Ezion and Nam Cheong badly need to deleverage their highly geared balance sheets in order to survive a multi-year sectoral downturn. In these times of great adversity, the relevance of guanxi …