People who have given me a helping hand – A friend of a friend who gave my company a huge unsecured loanMonday, February 25th, 2008
In one of my previous posts, I have written about my investment in a smallish telecommunication contracting company. The company had and still has a good track record and is well regarded in the telecommunication contracting industry in Malaysia.
In 1997, we got an opportunity to participate in a tender for what is called “Outside Plant Expansion” called by Ghana Telecom of Ghana. It was an international tender and we participated in it. When the 1st round tender results were announced, we found ourselves in a strong position.
Like I said before we were a smallish company. While we were very confident of our technical capability, funding was another issue.
This is the story of how we got our funding strength and my written tribute to the person who gave us the helping hand.
Some years ago, I was holding a relatively senior post in a PLC, which was a member of quite a large group. During that time, a friend called me up and said that a friend of his wanted to meet with me to ask for some advice. Naturally I agreed to meet him.
Let’s call this friend of the friend, DZ. DZ had a construction company and he had done some civil works for one of the group companies. Various guys from this company had made all kind of change requests in the work scope during their visits, which DZ had obliged. This affected the costs, and when the time came for him to claim variations, the trouble started. DZ wanted my advice on what to do.
I told him that all the group companies were independent and I did not see how I could help in any way. I also told him that if his documentation was firm, he could legally dispute the claims as provided in his contract. Whilst this would be a pain, his chances would be strong. And then we talked about general things and he left.
The next time, I met DZ was at a dinner party several years later. I had, by then, left the PLC and was then working in the telecommunication company. I told him about the tender in Ghana where we had a strong chance and whether he would be interested.
At the same dinner, he agreed to a JV and also to extend a shareholder loan of what was a huge amount. His finance people came over the next few days to negotiate terms etc. All were agreed smoothly and amicably. He left the full management to us, only attending and being briefed at the regular Board meetings we held.
This shareholder loan gave suppliers confidence and we then obtained supplier credit for the most expensive item in Outside Plant expansion work, i.e. cables.
The rest is history, rich history in my life.
The project was completed successfully. The loans were all paid. We made reasonable money. For DZ, his shareholding also paid rich monetary dividends.
All credit evaluation rules were broken in DZ extending us the credit. It was just his gut feel. I had only met him once before in my life. To have turned down my suggestion for joint participation would not have been surprising at all.
Well, you, DZ did not and for that I, from the bottom of my heart, thank you. Your helping hand that fateful day resulted in work and changed the lives of lots of people. I still receive emails from my Ghanaian friends who are now working in large companies in Ghana or even outside Ghana, based on skills they learnt whilst with us.
None of which would have been possible without DZ’s helping hand!