Sun Brewing (a)

1024 Words Feb 20th, 2016 5 Pages
Q1-1.What situation was Khemka family involve during the case?

SUN Brewing was founded in 1992 by Shiv Khemka with Nand, his father, and his brother, Uday.
The situation is set in March 1999, when the company was facing a major crisis.
In 1998, the family had been planning to raise a $200-$400 million through equity and debt offering for the company on the NYSE (New York Stock Exchange), in aim to finance major investments because of the increasing competition from international beer companies in the Russian market.
In August 1998, there was a massive devaluation of the rouble that led to a 90% decrease in the stock price of SUN Brewing listed on the Luxembourg stock exchange.
The proposed NYSE listings have then been cancelled
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The placement left Khemka family with ownership of 70% of SUN Brewing’s equity.
(C) 1994(Global Depository Receipts)
SUN issued GDR (Global Depository Receipts) to private investors, get 42000,000 US dollar ,which resulted in Khemka family ownership went down to 60%.
(D) 1995 (IPO in Luxembourg)
SUN filled in IPO in Luxembourg Stock Exchange, listed its 12,650,000 issued shares, along with all of the 6,309,500 issued GDRS.
(E) 1998 (IPO in New York Stock Exchange)
SUN would like to do IPO in New York Stock Exchange, but not success because of the financial crisis in Russia.
At the beginning stage (A) and (B) the finance come from their group and private
Placement with three institutional inventors. At the growing stage(C)(D) they do the(Global Depository Receipts) and (IPO in Luxembourg) to gain more money. At the third stage(D), they have profits and become maturity, they decide to go IPO in New York Stock Exchange, but not success.
Q3-1.How many funds did Sun Brewing need in March, 1999?

The funds that Sun Brewing need in March,1999 are: | + Current Liabilities(include Bridge Loan) | 28.85 | + Repo | 14.9 | + CapEx (Estimated-using growth rate) | 56.76 | - Cash | 4.9 | Total Funds needed | 95.61 |

The funds that Sun Brewing need in March,1999 are 95.61 million.

Q3-2.What is the value of company at this time?

We will use Discounted Cash Flow (DCF) to find the answer.

We have to get the Free Cash Flow

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