Kasikornbank, Thailand's third-largest commercial bank, was on the brink of ruin. Asia's 1997-'98 financial crisis had devastated the institution's balance sheet by pushing its nonperforming loans to an over-whelming 30 percent of assets. Its CEO, Banthoon Lamsam, a member of the family that had owned the bank for generations, concluded that Kasikorn — and the rest of Thailand's family-dominated banking industry — was in for wrenching and irreversible change. In full crisis mode, Banthoon slapped a moratorium on lending and in April 1998 jetted abroad, hat in hand, to raise fresh capital to salvage the then-53-year-old enterprise. He succeeded against all odds. That same month, in Asia's first big private equity issue since the onset of the crisis in July 1997, Kasikorn collected $857 million from international investors. The capital infusion gave the bank new life — at great cost. It diluted the Lamsam family's holding from more than 30 percent to less than 5 percent. Just four months later, however, Kasikorn's shares collapsed from 88 baht ($2.12) to 15 baht. Investors had become alarmed that the worsening local crisis triggered by Indonesia's August 1997 devaluation of the rupiah would spread financial contagion throughout the region.
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