SUN Brewing

Harvard Business School Case 9-207-022

Case Software 9-207-703

This courseware was prepared solely as the basis for class discussion. Cases are not intended to serve as
endorsements, sources of primary data, or illustrations of effective or ineffective management.
Copyright © 2006 Presidents and Fellows of Harvard College. No part of this product may be reproduced,
stored in a retrieval system, used in a spreadsheet or transmitted in any form or by any means—electronic,
mechanical, photocopying, recording or otherwise—without the permission of Harvard Business School.
Exhibit 4 SUN Brewing’s Ownership Structure after each Financing Round until its IPO (Shares in thousands)

Company
Incorporationa Private Placement Private Placement Rights Issueb GDR Private Placementc Loan with Repo Luxembourg IPO Repo

Shares % Owned Shares % Owned Shares % Owned Shares % Owned Shares % Owned Shares % Owned Shares % Owned Shares % Owned
Shareholders
S.U.N. Trade International Ltd. (STI)d 100 100% 69.899 69.90% 69.899 69.90% 75.618 71.00% 7,561.80 59.80% 5,061.80 40.00% 5,061.80 40.00% 7,561.80 59.80%
Northern Brewing Ltd. 20 20.00% 18.095 18.10% 18.095 17.00% 0 0% 0 0% 0 0% 0 0%
East Europe Development Fund Ltd. 10.101 10.10% 10.101 10.10% 10.758 10.10% 1,075.80 8.50% 1,075.80 8.50% 0 0% 0 0%
Framlington Russian Investment Fund 1.905 1.90% 2.029 1.90% 202.9 1.60% 202.9 1.60% 0 0% 0 0%
Other Investors in GDRse 3,809.50 30.10% 3,809.50 30.10% 0 0% 0 0%
Deutsche Morgan Grenfelle,f 2,500 19.80% 2,500 19.80% 0 0%
Public Investors 5,088.20 40.20% 5,088.20 40.20%

Total No. of Shares Issued (000) 100 100% 100 100% 100 100% 106.5 100% 12,650 100% 12,650 100% 12,650 100% 12,650 100%
Total No. of Shares Authorized (000) 1,000 1,000 1,000 1,000 15,000 15,000 15,000 15,000

Closing Date 12/9/1993 Dec-93 Jun-94 9/19/1994 12/28/1994 Mid-1995 12/29/1995 Mid-1996
Share Price at Closing Date 1p $500 $500 $1,000 $12.50 $9.50 $9.50
Market Capitalization ($MM) $50.00 $50.00 $106.50 $158.13 $120.18 $120.18

a
Sun Brewing Ltd. was incorporated as a private company in Jersey, Channel Island, on Dec. 9, 1993 as SUN Brewing Partners Ltd. On that date, SUN Brewing Ltd. acquired the whole of the issued share capital of SUN Breweries (CIS) Ltd.
from STI in exchange for the transfer of 100,000 shares of 1p each in Sun Brewing Ltd.'s capital to STI During 1992 and 1993 SUN Breweries (CIS) Ltd. established five Jersey subsidiary companies which in turn established five Russian
subsidiary brewing companies (see Exhibit 3).
b
On Sept. 19, 1994, 6,500 new shares were issued at $1,000 per share

c
On December 19, 1994 SUN Brewing Partners Ltd. changed its name to SUN Brewing Ltd. and changed its status to a public company. On that date, the share capital of the company was increased to £150,000, which enabled the creation of
15,000,000 shares with a par value of 1p each. Share capital was then converted from Pounds Sterling to U.S. dollars at the exchange rate of £1 = U.S.$1.50. The 106,500 shares became 10,650,000 through a share bonus award of 99 shares for each
existing share. On the same date, the company issued an additional 2,000,000 shares at a price of $11.11 per share. Morgan Grenfell had a Green Shoe clause for an additional 400,000 which it did not exercise. The $12.5 share price includes fees;
the net price at which the GDRs were placed was $11.1.
d
Owned 100% by the Khemka Family. It is the legal entity that holds the Khemkas shares in Sun Brewing Ltd.
e
The Bank of New York (Nominees) Ltd. holds the shares which underlie the GDRs

f
Sun Brewing Ltd. took out a $5 million loan at an interest rate of 60% from Deutsche Morgan Grenfell (DMG). The loan was structured as a repurchase agreement (repo), whereby STI transferred and agreed to repurchase 2,500,000 GDRs to
DMG, which held the shares as collateral.

Source: Company documents

Exhibit 5a SUN Brewing and Subsidiaries—Consolidated Income Statements for the Years Ended December 31, 1994–1998 (U

1995 1996

1994a (as restated) (as restated) 1997 1998

Net Sales 43,236 108,614 145,602 294,626 281,851

Operating Costs and Expenses

Cost of goods sold 44,043 97,839 129,237 244,862 235,362
Selling, distribution and administrative expenses 3,046 4,961 7,218 17,122 25,253
Depreciation and amortization 254 0 103 382 556
Total operating costs and expenses 47,343 102,800 136,558 262,366 261,171

Operating Income (4,107) 5,814 9,044 32,260 20,680

Other Income (Expense)

Interest income (1,237) 992 406 281 442
Interest expense (413) (161) (1,035) (577)
Other—net (107) (603) 368 (1,317) 740
Total other (expense) income (1,344) (24) 613 (2,071) (3,840)
Income before income taxes and minority interest (5,451) 5,790 9,657 30,189 16,840
Income taxes 2,252 (5,123) (5,553) (8,208) (9,191)
Income before minority interest (7,703) 667 4,104 21,981 7,649
Minority interest 936 (999) (1,535) (5,788) (3,555)

Net Income (Loss) (6,767) (332) 2,569 16,193 4,094

Basic Earnings (Loss) per Share 1 (0.03) 0 1 0

Diluted Earnings (Loss) per Share (0.03) 0 1 0

Source: SUN Brewing 1997 Annual Report.

a
1994 data taken from SUN Brewing 1995 Annual Report.
December 31, 1994–1998 (U.S. dollars in thousands, except per share amounts)
Exhibit 5b SUN Brewing and Subsidiaries—Consolidated Balance Sheets as of December 31, 1994–1998 (U.S. dollars in thousa

1995 1996
1994 (as restated) (as restated) 1997 1998

ASSETS
Current Assets
Cash and cash equivalents 23,219 8,826 1,920 17,890 4,951
Accounts receivable, net 2,521 7,812 3,992 7,634 1,258
Inventories 3,503 13,571 14,999 27,272 12,425
Other current assets 1,177 5,575 9,609 19,881 14,36
Total current assets 30,420 35,784 30,520 72,677 33,000
Plant and equipment, net 4,413 15,436 20,820 70,418 99,857
Other long-term assets, net 238 403 3,084 11,421 20,569
Total assets 35,071 51,623 54,424 154,516 153,426

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities
Accounts payable 2,461 5,389 5,685 11,623 10,902
Taxes payable—current 7,994 16,639 12,066 15,400 3,161
Accrued expenses 5,466 6,528 6,724
Short-term obligations 367 102 191 3,637 1,063
Loans payable—related parties 5,330 0 7,000
Total current liabilities 13,473 26,694 28,738 37,188 28,850
Taxes payable—long term 0 2,170 260 0 693
Other long-term liabilities 244 738 534 0 90
Total liabilities 13,717 29,602 29,532 37,188 29,633
Minority interests in equity of subsidiaries 2,565 3,564 4,169 18,002 18,043
Contingent share capital repurchase commitment 0 39,713 39,713

Shareholders’ Equity
Share capital 190 190 190 248 248
Additional paid-in capital 28,178 28,178 28,178 50,817 50,817
Retained (deficit) earnings (7,437) (7,067) (7,645) 8,548 14,972
Total shareholders’ equity 18,789 18,457 20,723 59,613 66,037
Total liabilities and shareholders’ equity 35,071 51,623 54,424 154,516 153,426

Source: SUN Brewing Annual Reports, 1995 and 1997.

4–1998 (U.S. dollars in thousands)
Exhibit 5c SUN Brewing and Subsidiaries—Consolidated Statements of Cash Flows for the Years Ended December 31, 1994–1

1995 1996
1994a (as restated) (as restated)

Operating Activities:
Net (loss) income (6,767) (332) 2,569
Adjustments to reconcile net (loss) income to net cash from operations:
Depreciation and amortization 254 636 1,054
Minority interest (936) 999 1,535
Deferred taxes 0 0
Allowance for doubtful accounts 191 1,075
Changes in current assets and current liabilities:
Accounts receivable (92) (5,482) 1,450
Inventories (1,088) (10,068) (4,113)
Other current assets 324 (3,237) (3,976)
Taxes, net 4,357 9,654 (4,614)
Accounts payable 1,906 4,841 763
Accrued expenses 0 4,032
Net cash provided (used) by operations (2,042) (2,798) (225)

Investing Activities:
Purchase of plant and equipment (1,263) (11,659) (7,801)
Payment and prepayment for acquisition of Businesses, net of cash 0 (3,662)
Other (77) (165) (930)
Net cash used in investing (1,340) (11,824) (12,393)

Financing Activities:
Net proceeds from issuance of shares 28,720 0 0
(Payment) proceeds from loans payable-related parties (1,553) 0 5,330
Receipt of short-term loans 0 89
Other long-term liabilities (657) 229 293
Net cash provided by financing 26,510 229 5,712
Increase (decrease) in cash and cash equivalents 23,128 (14,393) (6,906)
Cash and cash equivalents, beginning of year 546 23,219 8,826
Cash and cash equivalents, end of year 23,219 8,826 1,920

Cash paid during the year for:

Interest 1,261 413 647
Income taxes 2,225 5,208 7,317

Source: SUN Brewing 1997 Annual Report.

a
1994 data taken from SUN Brewing 1995 Annual Report.
s Ended December 31, 1994–1998 (U.S. dollars in thousands)

1997 1998

16,193 4,094

3,121 6,214
5,788 3,555
(1,409) 2,913
1,154 465

(3,406) 5,911
(5,616) 14,847
(1,599) 5,515
(1,259) (13,836)
4,263 (721)
(1,141) (2,378)
16,089 26,580

(28,851) (35,423)
(14,628) (11,186)
0 0
(43,479) (46,609)

45,795 0
(5,330) 1,000
2,895 6,090
0 0
43,360 7,090
15,970 (12,939)
1,920 17,890
17,890 4,951

1,035 577
9,633 8,574
Exhibit 6 SUN Brewing Ltd. Daily Stock Price (in U.S. dollars)

Date Price

12/29/95 9.50
1/2/96 9.50
1/3/96 9.50
1/4/96 9.50
1/5/96 9.50
1/8/96 9.50
1/9/96 9.50
1/10/96 9.50
1/11/96 9.50
1/12/96 9.50
1/15/96 9.50
1/16/96 9.50
1/17/96 9.50
1/18/96 9.50
1/19/96 9.50
1/22/96 9.50
1/23/96 9.50
1/24/96 9.50
1/25/96 9.50
1/26/96 9.50
1/29/96 9.50
1/30/96 9.50
1/31/96 9.50
2/1/96 9.50
2/2/96 9.50
2/5/96 9.50
2/6/96 9.50
2/7/96 9.50
2/8/96 9.50
2/9/96 9.50
2/12/96 9.50
2/13/96 9.50
2/14/96 9.50
2/15/96 9.50
2/16/96 9.50
2/19/96 9.50
2/20/96 9.50
2/21/96 9.50
2/22/96 9.50
2/23/96 9.50
2/26/96 9.50
2/27/96 9.50
2/28/96 9.50
2/29/96 9.50
3/1/96 9.50
3/4/96 9.50
3/5/96 9.50
3/6/96 9.50
3/7/96 9.50
3/8/96 9.50
3/11/96 9.50
3/12/96 9.50
3/13/96 9.50
3/14/96 9.50
3/15/96 9.50
3/18/96 9.50
3/19/96 9.50
3/20/96 9.50
3/21/96 9.50
3/22/96 9.50
3/25/96 9.50
3/26/96 9.50
3/27/96 9.50
3/28/96 9.50
3/29/96 9.50
4/1/96 9.50
4/2/96 9.50
4/3/96 9.50
4/4/96 9.50
4/9/96 9.50
4/10/96 9.50
4/11/96 9.50
4/12/96 9.50
4/15/96 9.50
4/16/96 9.50
4/17/96 9.50
4/18/96 9.50
4/19/96 9.50
4/22/96 9.50
4/23/96 9.50
4/24/96 9.50
4/25/96 9.50
4/26/96 9.50
4/29/96 9.50
4/30/96 9.50
5/1/96 9.50
5/2/96 9.50
5/3/96 9.50
5/7/96 9.50
5/8/96 9.50
5/9/96 9.50
5/10/96 9.50
5/13/96 9.50
5/14/96 9.50
5/15/96 9.50
5/16/96 9.50
5/17/96 9.50
5/20/96 9.50
5/21/96 9.50
5/22/96 9.50
5/23/96 9.50
5/24/96 9.50
5/28/96 9.50
5/29/96 9.50
5/30/96 9.50
5/31/96 9.50
6/3/96 9.50
6/4/96 9.50
6/5/96 9.50
6/6/96 9.50
6/7/96 9.50
6/10/96 9.50
6/11/96 9.50
6/12/96 9.50
6/13/96 9.50
6/14/96 9.50
6/17/96 9.50
6/18/96 9.50
6/19/96 9.50
6/20/96 9.50
6/21/96 9.50
6/24/96 9.50
6/25/96 9.50
6/26/96 9.50
6/27/96 9.50
6/28/96 9.50
7/1/96 9.50
7/2/96 9.50
7/3/96 9.50
7/4/96 9.50
7/5/96 9.50
7/8/96 9.50
7/9/96 9.50
7/10/96 9.50
7/11/96 9.50
7/12/96 9.50
7/15/96 9.50
7/16/96 9.50
7/17/96 9.50
7/18/96 9.50
7/19/96 9.50
7/22/96 9.50
7/23/96 9.50
7/24/96 9.50
7/25/96 9.50
7/26/96 9.50
7/29/96 9.50
7/30/96 9.50
7/31/96 9.50
8/1/96 9.50
8/2/96 9.50
8/5/96 9.50
8/6/96 9.50
8/7/96 9.50
8/8/96 9.50
8/9/96 9.50
8/12/96 9.50
8/13/96 9.50
8/14/96 9.50
8/15/96 9.50
8/16/96 9.50
8/19/96 9.50
8/20/96 9.50
8/21/96 9.50
8/22/96 9.50
8/23/96 9.50
8/27/96 9.50
8/28/96 9.50
8/29/96 9.50
8/30/96 9.50
9/2/96 9.50
9/3/96 9.50
9/4/96 9.50
9/5/96 9.50
9/6/96 9.50
9/9/96 9.50
9/10/96 9.50
9/11/96 9.50
9/12/96 9.50
9/13/96 9.50
9/16/96 9.50
9/17/96 9.50
9/18/96 9.50
9/19/96 9.50
9/20/96 9.50
9/23/96 9.50
9/24/96 9.50
9/25/96 9.50
9/26/96 9.50
9/27/96 9.50
9/30/96 9.50
10/1/96 9.50
10/2/96 9.50
10/3/96 9.50
10/4/96 9.50
10/7/96 9.50
10/8/96 9.50
10/9/96 9.50
10/10/96 9.50
10/11/96 9.50
10/14/96 9.50
10/15/96 9.50
10/16/96 9.50
10/17/96 9.50
10/18/96 9.50
10/21/96 9.50
10/22/96 9.50
10/23/96 9.50
10/24/96 9.50
10/25/96 9.50
10/28/96 9.50
10/29/96 9.50
10/30/96 9.50
10/31/96 9.50
11/1/96 9.50
11/4/96 9.50
11/5/96 9.50
11/6/96 9.50
11/7/96 9.50
11/8/96 9.50
11/11/96 9.50
11/12/96 9.50
11/13/96 9.50
11/14/96 9.50
11/15/96 9.50
11/18/96 9.50
11/19/96 9.50
11/20/96 9.50
11/21/96 9.50
11/22/96 9.50
11/25/96 9.50
11/26/96 9.50
11/27/96 9.50
11/28/96 9.50
11/29/96 9.50
12/2/96 9.50
12/3/96 9.50
12/4/96 9.50
12/5/96 9.50
12/6/96 9.50
12/9/96 9.50
12/10/96 9.50
12/11/96 9.50
12/12/96 9.50
12/13/96 9.50
12/16/96 9.50
12/17/96 9.50
12/18/96 9.50
12/19/96 9.50
12/20/96 9.50
12/23/96 9.50
12/24/96 9.50
12/27/96 9.50
12/30/96 9.50
12/31/96 9.50
1/2/97 9.50
1/3/97 9.50
1/6/97 9.50
1/7/97 9.50
1/8/97 9.50
1/9/97 9.50
1/10/97 9.50
1/13/97 9.50
1/14/97 9.50
1/15/97 9.50
1/16/97 9.50
1/17/97 9.50
1/20/97 9.50
1/21/97 9.50
1/22/97 9.50
1/23/97 9.50
1/24/97 9.50
1/27/97 9.50
1/28/97 9.50
1/29/97 9.50
1/30/97 9.50
1/31/97 9.50
2/3/97 9.50
2/4/97 9.50
2/5/97 9.50
2/6/97 9.50
2/7/97 9.50
2/10/97 9.50
2/11/97 9.50
2/12/97 9.50
2/13/97 9.50
2/14/97 9.50
2/17/97 9.50
2/18/97 9.50
2/19/97 9.50
2/20/97 9.50
2/21/97 9.50
2/24/97 9.50
2/25/97 9.50
2/26/97 9.50
2/27/97 9.50
2/28/97 9.50
3/3/97 9.50
3/4/97 9.50
3/5/97 9.50
3/6/97 9.50
3/7/97 9.50
3/10/97 9.50
3/11/97 9.50
3/12/97 9.50
3/13/97 9.50
3/14/97 9.50
3/17/97 9.50
3/18/97 9.50
3/19/97 9.50
3/20/97 9.50
3/21/97 9.50
3/24/97 9.50
3/25/97 9.50
3/26/97 9.50
3/27/97 9.50
4/1/97 9.50
4/2/97 9.50
4/3/97 9.50
4/4/97 9.50
4/7/97 9.50
4/8/97 9.50
4/9/97 9.50
4/10/97 9.50
4/11/97 9.50
4/14/97 9.50
4/15/97 9.50
4/16/97 9.50
4/17/97 9.50
4/18/97 9.50
4/21/97 9.50
4/22/97 9.50
4/23/97 9.50
4/24/97 9.50
4/25/97 9.50
4/28/97 9.50
4/29/97 9.50
4/30/97 9.50
5/1/97 9.50
5/2/97 9.50
5/5/97 7.55
5/6/97 7.55
5/7/97 7.55
5/8/97 7.55
5/9/97 7.55
5/12/97 7.55
5/13/97 7.55
5/14/97 7.55
5/15/97 7.55
5/16/97 7.55
5/19/97 7.55
5/20/97 7.55
5/21/97 7.55
5/22/97 7.55
5/23/97 7.55
5/27/97 7.55
5/28/97 7.55
5/29/97 7.55
5/30/97 7.55
6/2/97 7.55
6/3/97 7.55
6/4/97 7.55
6/5/97 7.55
6/6/97 7.55
6/9/97 7.55
6/10/97 7.55
6/11/97 7.55
6/12/97 7.55
6/13/97 7.55
6/16/97 7.55
6/17/97 7.55
6/18/97 7.55
6/19/97 7.55
6/20/97 7.55
6/23/97 7.55
6/24/97 7.55
6/25/97 7.55
6/26/97 7.55
6/27/97 7.55
6/30/97 7.55
7/1/97 7.55
7/2/97 7.55
7/3/97 7.55
7/4/97 7.55
7/7/97 7.55
7/8/97 7.55
7/9/97 7.55
7/10/97 7.10
7/11/97 7.85
7/14/97 8.05
7/15/97 8.05
7/16/97 8.05
7/17/97 8.05
7/18/97 8.05
7/21/97 8.05
7/22/97 7.75
7/23/97 7.75
7/24/97 7.40
7/25/97 7.25
7/28/97 7.10
7/29/97 7.75
7/30/97 7.75
7/31/97 8.70
8/1/97 8.65
8/4/97 8.45
8/5/97 8.55
8/6/97 8.55
8/7/97 8.55
8/8/97 8.65
8/11/97 8.65
8/12/97 8.65
8/13/97 8.65
8/14/97 8.65
8/15/97 8.65
8/18/97 8.45
8/19/97 8.25
8/20/97 8.35
8/21/97 8.60
8/22/97 8.80
8/25/97 8.90
8/26/97 9.00
8/27/97 8.90
8/28/97 8.90
8/29/97 8.90
9/1/97 8.90
9/2/97 8.90
9/3/97 8.90
9/4/97 8.90
9/5/97 8.90
9/8/97 8.90
9/9/97 8.90
9/10/97 8.90
9/11/97 8.90
9/12/97 8.90
9/15/97 8.90
9/16/97 9.40
9/17/97 9.60
9/18/97 9.90
9/19/97 10.10
9/22/97 10.55
9/23/97 10.40
9/24/97 10.40
9/25/97 11.40
9/26/97 11.65
9/29/97 11.60
9/30/97 12.40
10/1/97 13.35
10/2/97 13.55
10/3/97 15.25
10/6/97 15.35
10/7/97 15.35
10/8/97 14.75
10/9/97 14.75
10/10/97 14.75
10/13/97 14.20
10/14/97 14.20
10/15/97 14.20
10/16/97 14.20
10/17/97 14.20
10/20/97 14.20
10/21/97 14.05
10/22/97 14.05
10/23/97 14.05
10/24/97 14.05
10/27/97 14.05
10/28/97 14.05
10/29/97 14.05
10/30/97 12.80
10/31/97 12.50
11/3/97 12.45
11/4/97 13.35
11/5/97 13.35
11/6/97 13.35
11/7/97 13.35
11/10/97 13.35
11/11/97 13.42
11/12/97 13.42
11/13/97 12.55
11/14/97 12.65
11/17/97 12.10
11/18/97 13.00
11/19/97 13.00
11/20/97 13.00
11/21/97 12.65
11/24/97 12.65
11/25/97 13.00
11/26/97 13.00
11/27/97 13.00
11/28/97 13.00
12/1/97 13.00
12/2/97 13.00
12/3/97 13.00
12/4/97 13.00
12/5/97 13.00
12/8/97 13.00
12/9/97 13.00
12/10/97 13.00
12/11/97 13.00
12/12/97 13.00
12/15/97 13.00
12/16/97 12.65
12/17/97 12.65
12/18/97 12.65
12/19/97 12.65
12/22/97 12.65
12/23/97 13.75
12/24/97 13.75
12/29/97 13.75
12/30/97 13.10
12/31/97 13.10
1/2/98 13.10
1/5/98 13.10
1/6/98 15.00
1/7/98 15.00
1/8/98 15.00
1/9/98 15.00
1/12/98 15.00
1/13/98 15.00
1/14/98 15.00
1/15/98 15.00
1/16/98 15.00
1/19/98 15.00
1/20/98 15.75
1/21/98 15.75
1/22/98 15.75
1/23/98 16.35
1/26/98 16.35
1/27/98 14.85
1/28/98 14.85
1/29/98 15.00
1/30/98 15.00
2/2/98 14.70
2/3/98 14.70
2/4/98 14.70
2/5/98 14.70
2/6/98 14.70
2/9/98 14.70
2/10/98 14.70
2/11/98 14.70
2/12/98 14.70
2/13/98 14.70
2/16/98 16.45
2/17/98 16.45
2/18/98 16.00
2/19/98 16.00
2/20/98 16.00
2/23/98 15.95
2/24/98 15.95
2/25/98 15.95
2/26/98 15.95
2/27/98 15.95
3/2/98 15.95
3/3/98 15.95
3/4/98 15.95
3/5/98 15.95
3/6/98 15.95
3/9/98 15.95
3/10/98 15.95
3/11/98 19.50
3/12/98 19.50
3/13/98 19.50
3/16/98 18.55
3/17/98 18.55
3/18/98 18.55
3/19/98 18.55
3/20/98 18.55
3/23/98 18.55
3/24/98 18.55
3/25/98 17.00
3/26/98 17.00
3/27/98 17.00
3/30/98 17.00
3/31/98 16.38
4/1/98 16.38
4/2/98 16.00
4/3/98 16.00
4/6/98 16.00
4/7/98 16.00
4/8/98 16.00
4/9/98 16.00
4/14/98 16.00
4/15/98 16.00
4/16/98 16.00
4/17/98 15.85
4/20/98 16.25
4/21/98 16.25
4/22/98 16.25
4/23/98 16.25
4/24/98 16.25
4/27/98 16.25
4/28/98 16.75
4/29/98 16.75
4/30/98 16.75
5/1/98 16.75
5/5/98 18.50
5/6/98 18.50
5/7/98 18.50
5/8/98 18.50
5/11/98 18.50
5/12/98 18.50
5/13/98 18.00
5/14/98 18.00
5/15/98 18.00
5/18/98 18.00
5/19/98 16.75
5/20/98 16.75
5/21/98 16.75
5/22/98 16.75
5/26/98 15.00
5/27/98 15.00
5/28/98 13.50
5/29/98 13.50
6/1/98 13.50
6/2/98 13.50
6/3/98 13.50
6/4/98 13.50
6/5/98 14.75
6/8/98 14.75
6/9/98 14.75
6/10/98 14.75
6/11/98 14.75
6/12/98 14.75
6/15/98 14.75
6/16/98 14.75
6/17/98 14.75
6/18/98 14.75
6/19/98 13.63
6/22/98 13.63
6/23/98 13.63
6/24/98 13.63
6/25/98 13.63
6/26/98 13.50
6/29/98 13.50
6/30/98 11.85
7/1/98 11.85
7/2/98 11.85
7/3/98 11.85
7/6/98 11.85
7/7/98 11.85
7/8/98 11.85
7/9/98 11.85
7/10/98 11.85
7/13/98 11.85
7/14/98 11.85
7/15/98 11.85
7/16/98 11.85
7/17/98 11.85
7/20/98 11.85
7/21/98 13.75
7/22/98 13.75
7/23/98 13.75
7/24/98 13.75
7/27/98 13.75
7/28/98 13.38
7/29/98 13.38
7/30/98 13.38
7/31/98 13.38
8/3/98 13.38
8/4/98 13.38
8/5/98 13.38
8/6/98 12.45
8/7/98 12.45
8/10/98 12.45
8/11/98 12.45
8/12/98 12.45
8/13/98 10.35
8/14/98 10.35
8/17/98 10.35
8/18/98 10.35
8/19/98 9.13
8/20/98 8.50
8/21/98 8.50
8/24/98 8.50
8/25/98 8.50
8/26/98 8.50
8/27/98 8.50
8/28/98 8.50
9/1/98 3.50
9/2/98 3.50
9/3/98 3.50
9/4/98 3.50
9/7/98 3.50
9/8/98 3.50
9/9/98 3.50
9/10/98 3.50
9/11/98 3.50
9/14/98 3.50
9/15/98 3.50
9/16/98 3.50
9/17/98 3.50
9/18/98 3.50
9/21/98 3.50
9/22/98 1.75
9/23/98 1.75
9/24/98 1.75
9/25/98 1.75
9/28/98 1.75
9/29/98 2.15
9/30/98 2.15
10/1/98 2.15
10/2/98 1.85
10/5/98 1.85
10/6/98 1.85
10/7/98 1.85
10/8/98 1.85
10/9/98 1.90
10/12/98 1.90
10/13/98 2.30
10/14/98 2.55
10/15/98 3.00
10/16/98 4.00
10/19/98 4.00
10/20/98 4.00
10/21/98 4.00
10/22/98 3.45
10/23/98 3.45
10/26/98 3.45
10/27/98 3.45
10/28/98 3.45
10/29/98 3.13
10/30/98 3.13
11/2/98 3.13
11/3/98 3.00
11/4/98 3.00
11/5/98 3.00
11/6/98 3.00
11/9/98 3.00
11/10/98 3.00
11/11/98 3.00
11/12/98 3.00
11/13/98 3.00
11/16/98 3.00
11/17/98 3.00
11/18/98 3.00
11/19/98 3.15
11/20/98 3.15
11/23/98 3.05
11/24/98 3.50
11/25/98 3.50
11/26/98 3.50
11/27/98 3.50
11/30/98 3.50
12/1/98 3.50
12/2/98 3.50
12/3/98 3.50
12/4/98 3.50
12/7/98 3.50
12/8/98 3.50
12/9/98 3.50
12/10/98 3.50
12/11/98 3.50
12/14/98 3.50
12/15/98 3.50
12/16/98 2.45
12/17/98 2.45
12/18/98 2.45
12/21/98 2.45
12/22/98 2.45
12/23/98 2.45
12/24/98 2.45
12/29/98 2.63
12/30/98 2.45
1/4/99 2.45
1/5/99 2.45
1/6/99 2.45
1/7/99 2.45
1/8/99 2.45
1/11/99 2.45
1/12/99 2.45
1/13/99 2.45
1/14/99 2.45
1/15/99 2.45
1/18/99 2.45
1/19/99 2.45
1/20/99 2.45
1/21/99 2.45
1/22/99 2.45
1/25/99 2.45
1/26/99 2.40
1/27/99 2.40
1/28/99 2.40
1/29/99 2.40
2/1/99 2.40
2/2/99 2.40
2/3/99 2.20
2/4/99 2.20
2/5/99 2.20
2/8/99 2.20
2/9/99 2.25
2/10/99 2.25
2/11/99 2.25
2/12/99 2.25
2/15/99 2.25
2/16/99 2.25
2/17/99 2.35
2/18/99 2.35
2/19/99 2.35
2/22/99 2.35
2/23/99 2.35
2/24/99 2.63
2/25/99 2.63
2/26/99 2.63
3/1/99 2.63
3/2/99 2.40
3/3/99 2.40
3/4/99 2.40
3/5/99 2.40
3/8/99 2.40
3/9/99 2.40
3/10/99 2.40
3/11/99 2.40
3/12/99 2.40
Exhibit 7 SUN Brewing and Subsidiaries—Financial Forecasts, 1999–2003 (U.S. dollars in millions)a

1999 2000 2001 2002 2003

Net Sales—Beer 124.6 165.7 204.2 242.1 282.5

Cost of Goods Sold—Beer 53.1 66.8 79 91.7 104.7
Gross Margin—Beer 71.5 98.9 125.2 150.4 177.8
Fixed Production & Logistics 18.4 20.7 21.8 22.3 22.8
Sales, Marketing, & Distribution 13.1 21.2 28.3 35.9 43.5
Fixed Admin & Other 18.2 22.1 24 25.3 26.5
Brewing EBITDA 21.8 34.9 51.1 66.9 85

Malt EBITDA 2.3 2.4 2.8 2.8 2.8

Soft Drink EBITDA 3.4 3.7 3.8 3.8 3.8

Total EBITDA 27.5 41 57.7 73.5 91.6

Depreciation and amortization 9.3 12.8 14.7 15.5 15.9
Total EBIT 18.2 28.3 43 58 75.7
Net Income 9 14.7 23.3 30.1 38.1

Change in Net Working Capital 4.3 4.6 4 3.6 3.3

Capital Expenditures Excl. Packaging 65.6 75.2 55 36.2 3.3
Packaging Expenditures 4 5.9 6.5 5.1 4.8

Source: Company documents

a Forecasts include 100% of the following operations: Perm, Ivanovo, Kursk, Saransk, Povolzhe, and Bavaria. The latter two
breweries were acquired by SUN Brewing in 1997. Also included are operations from two additional breweries whose
acquisition in 1999 was contingent on bringing in a strategic partner for SUN Brewing. The contribution of those two
breweries to the 1999 forecasts included: $9.2 million to 1999 EBITDA, $32.4 million to 1999 packaging expenditures, and $4
million to 1999 other capital expenditures. Capital expenditures excluding packaging for the two breweries in subsequent
years was forecasted at U.S. dollar millions: 26.1for 2000, 23.7 for 2001, 8.3 for 2002, and 4.5 for 2003. Operations from the
Yekaterinenburg brewery are excluded.