Publications
Publications
- September 2006 (Revised November 2006)
- HBS Case Collection
SUN Brewing (A) (CW)
Abstract
The Khemka family of India--founders, managers, and majority owners of Russia-based SUN Brewing--faces a difficult decision in 1998. Following the ruble'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 planned a $200 million to $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 ruble devaluation and the deep financial crisis that has ensued has led to the cancellation of the proposed CYSE listings--and to a $40 million bridge loan that now needs to be repaid. The family is debating the merits of two main alternatives: To bring in a major global beer company as a strategic partner at this difficult time or to 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 provider.
Keywords
Financial Crisis; Emerging Markets; Family Business; Financing and Loans; Capital Markets; Decision Choices and Conditions; Food and Beverage Industry; India; Russia
Citation
Villalonga, Belen, and Raphael Amit. "SUN Brewing (A) (CW)." Harvard Business School Spreadsheet Supplement 207-703, September 2006. (Revised November 2006.)