Publications
Publications
- August 2006 (Revised June 2010)
- HBS Case Collection
SUN Brewing (A)
Abstract
The Khemka family of India, founders, managers, and majority owners of Russia-based SUN Brewing, faces a difficult decision in 1998. Following the rouble's massive devaluation in August 1998, the stock price of SUN Brewing, which is publicly listed on the Luxemburg exchange, has declined by over 90%. Only two months earlier they had been planning a $200-$400 million equity and debt offering on the New York Stock Exchange, to finance major investments in the face of increased competition from international beer companies in the Russian market. However, the rouble devaluation and the deep financial crisis that has ensued has led to the cancellation of the proposed NYSE listings, and to a $40 million bridge loan that now needs to be repaid. The family is debating the merits of two main alternatives: Should they bring in a major global beer company as a strategic partner at this difficult time? Or should they stay on as controlling owners, inject millions of dollars into the company from other parts of the family business group, and weather the storm until better terms can be expected from any outside capital provider?
Keywords
Family Business; Decision Choices and Conditions; Capital Markets; Financing and Loans; Emerging Markets; India; Russia
Citation
Villalonga, Belen, and Raphael Amit. "SUN Brewing (A)." Harvard Business School Case 207-022, August 2006. (Revised June 2010.)