• What made the Khemka family decide to enter the beer market in Russia in 1992. How did they find themselves in the situation they were in at the time of the case? What could they have done differently?
• Why beer? The Khemkas dont drink beer, dont know how to make beer, dont really know the beer market anywhere in the world. And why beer in Russia? Dont Russians drink vodka...?
• So how did they do it?
• How was the growth financed?
• What do we know about the private placements?
• The next time the Khemka family raised equity was through a rights issue in September of 1994. What exactly is a rights issue? Is this a common way of issuing equity?
• How about GDRs? Is this really high finance or a fairly standard way of raising capital? Why did Sun Brewing issue GDRs?
• What about the IPO? Does December 1995 sound like a good time to take SUN Brewing public?
• Why did they do it, then?
• How did the private placement investors do as a result?
• Except for the 60% loan, all the sources of outside capital the Khemkas tapped into were equity. Why didnt they use more debt? Could they? Should they?
• What was the problem with the situation in 1999?
• What were SUN Brewings financing needs in March 1999? How much was the company worth?
• What risks were associated with investing in a Russian beer company in 1999?
• Suppose you are Shiv Khemka... you need $38 million immediately to keep the company afloat, plus $76 more if you want to keep it running for the next few years. What were the pros and cons of the different alternatives (listed below) available to the Khemka family in 1999?
  • Stay the course (go it alone)
  • Bring in a strategic (joint venture) partner
  • Bringing in a financial partner
  • Sell off completely