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    Case 3 - ROLAN MAMALIAS

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    Mark Louie Aguilar
    Mr. Chua wants to expand his grocery business by opening a new branch but needs $100 million in capital. He has $50 million and wants to incorporate as "Chua Groceries, Inc" with two friends investing the other $50 million. However, Mr. Chua wants to control 51% of shares in case relations sour in the future. He needs a $2 million loan to gain control. The document discusses sources of funds like banks that Mr. Chua could approach for a loan using his business experience and projections. It outlines applying for a business loan and ensuring timely loan repayment. Given his success with the first branch, the document says it should be easier for Mr. Chua to sustain growth at

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    Case 3 - ROLAN MAMALIAS

    Uploaded by

    Mark Louie Aguilar
    1K views3 pages
    Mr. Chua wants to expand his grocery business by opening a new branch but needs $100 million in capital. He has $50 million and wants to incorporate as "Chua Groceries, Inc" with two friends investing the other $50 million. However, Mr. Chua wants to control 51% of shares in case relations sour in the future. He needs a $2 million loan to gain control. The document discusses sources of funds like banks that Mr. Chua could approach for a loan using his business experience and projections. It outlines applying for a business loan and ensuring timely loan repayment. Given his success with the first branch, the document says it should be easier for Mr. Chua to sustain growth at

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    Mr. Chua wants to expand his grocery business by opening a new branch but needs $100 million in capital. He has $50 million and wants to incorporate as "Chua Groceries, Inc" with two friends investing the other $50 million. However, Mr. Chua wants to control 51% of shares in case relations sour in the future. He needs a $2 million loan to gain control. The document discusses sources of funds like banks that Mr. Chua could approach for a loan using his business experience and projections. It outlines applying for a business loan and ensuring timely loan repayment. Given his success with the first branch, the document says it should be easier for Mr. Chua to sustain growth at

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views3 pages

    Case 3 - ROLAN MAMALIAS

    Uploaded by

    Mark Louie Aguilar
    Mr. Chua wants to expand his grocery business by opening a new branch but needs $100 million in capital. He has $50 million and wants to incorporate as "Chua Groceries, Inc" with two friends investing the other $50 million. However, Mr. Chua wants to control 51% of shares in case relations sour in the future. He needs a $2 million loan to gain control. The document discusses sources of funds like banks that Mr. Chua could approach for a loan using his business experience and projections. It outlines applying for a business loan and ensuring timely loan repayment. Given his success with the first branch, the document says it should be easier for Mr. Chua to sustain growth at

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    KARAOKE BAR BUSINESS CASE STUDY

    MR. CHUA CASE STUDY 3

    Rolan B. Mamalias

    January 21, 2021

    Thor Domato Jr.

    Bachelor of Public Administration

    Page 1 of 3
    KARAOKE BAR BUSINESS CASE STUDY

    The Problem

    Mr. Chua in his plan for expansion by putting up a branch of his grocery near Cubao, has decided to take

    the third option: incorporating under the business name, “Chua Groceries, Inc.” He figures that he needs a

    subscribed and paid-up capital of ₱100 million to be submitted to the Securities and Exchange Commission

    (SEC). He has only ₱50 million cash in the bank. He invited two close friends to chip in the balance of ₱50

    million to make up for the balance. Mr. Chua wants to be elected as president and his wife as treasurer of the

    company. His two friends would be elected vice-president and corporate secretary, respectively.

    While Mr. Chua, his wife and son, the manager of the planned branch of the grocery store, would control

    the day-to-day operations of the company, he does not feel comfortable with the 50-50 sharing of the capital.

    What if relations with his two friends turn sour in the future? Aggressive and ambitious that Mr. Chua is, what

    worries him is if he further expands the grocery business in the future and the two friends do not agree, there

    would be a deadlock in the voting. His two friends could be a bar to his future expansion plans. Mr. Chua

    decided to go on a 51-49 percent sharing in the stockholdings of the planned company. 51 percent is to be

    owned and controlled by him. He needs therefore ₱2 million more for his paid-up capital to assure control of the

    company. His problem is, where would he get that much money fast? Which sources of funds could Mr. Chua

    avail of on credit?

    Goal Setting

    With the investment this big, Mr. Chua must have already done his research on the success rate on the

    expansion of his grocery business. Since he already has an existing similar business, it is necessary for him to

    comply in the required obligation imposed by the Securities and Exchange Commission. Now that he already

    has a concrete plan to have a partnership with his two friends but still wanted to have a much bigger shares to

    company, he can always lend funds to local banks to help him with the investment needed.

    Page 2 of 3
    KARAOKE BAR BUSINESS CASE STUDY

    Executing the Plan

    Once Mr. Chua got the agreement to have a share of 51% with his partners friends. He ca now proceed

    and apply for a business loan in any local bank of his choice. Since he already has an existing business, he

    must already have a good credit history, cash flow history and projections for the business, collateral available to

    secure the loan and many pieces of loan documentation that includes business and personal financial

    statements, income tax returns, a business plan and that essentially sums up and provides evidence for the first

    four items listed.

    Measuring the Results

    Now that Mr. Chua acquired the funds he needed; he will also now make sure to pay-up the funds

    needed to be paid to the bank where terms was agreed on.

    Sustaining Growth

    Since he already has a successful first branch, it should be much easier for him to sustain the growth of

    the second one as he already has enough knowledge and experience on handling such business and would

    never risk a huge sum of funds if he is not confident enough that it would succeed.

    Page 3 of 3

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