MIRA
INFORM REPORT
|
Report Date : |
16.10.2007 |
IDENTIFICATION DETAILS
|
Name : |
SYNERGY CABLES LTD. |
|
|
|
|
Registered Office : |
Kiryat Bialik 27239 |
|
|
|
|
Country : |
|
|
|
|
|
Date of Incorporation : |
10.7.1963 |
|
|
|
|
Legal Form : |
Public Limited Liability Company |
|
|
|
|
Line of Business : |
Manufacturers, marketers and exporters of power, electronic and
telecommunication cables |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
name & address
SYNERGY CABLES LTD.
KIRYAT BIALIK 27239
Telephone 972 4 846 62 22
Fax 972 4 846 62
86
HISTORY
A public limited liability company, incorporated as per file No.
52-002527-1 on the 10.7.1963.
Originally registered under the name ZION CABLES UNITED WORKS LTD.,
which changed to SUPERIOR CABLES LTD. on 24.1.1999, and then changed to the
present one on 23.4.2007.
In 1998, all activities of CVALIM – THE ELECTRIC WIRE AND CABLE COMPANY
OF ISRAEL LTD., a rival company founded in 1934 and operated in the same line
as subject, were transferred to subject.
SHARE CAPITAL
Authorized share capital
of which shares amounting to
SHAREHOLDERS
1. ALPINE GROUP
INC., of the
CABLES HOLDING (1997) LTD.,
2. ART P.E. LIMITED
PARTNERSHIP, 29.30%, of the SFK Group,
3. Shares are also traded
on the Tel Aviv Stock Exchange.
On the 18.9.2002, former parent, SUPERIOR TELECOMMUNICATIONS INC.,
(U.S.), signed an agreement to sell several assets and holdings, including its
shares in subject, to the ALPINE GROUP INC. (which owns 49% of SUPERIOR
TELECOMMUNICATIONS INC.), for a sum of US$ 85 million. The deal was finalized
on the 12.12.2002.
In July 2006 the SHREM FUDIM KELNER (SFK) Group, through its investment
arm SFK TECHNOLOGIES LTD., invested in subject in return of 30% of its shares.
DIRECTORS
1. Steven S. Elbaum,
Chairman,
2. Donald M. Elbaum,
3. Stewart Warsager,
4. Dr. Hugo Chaufan,
5. Ofer Yarkoni,
6. Harold M. Karp,
7. Mrs. Dana P. Sidur,
8. Doron Steiger,
9. Ariel Ginzburg,
10. Yekutiel Gavish,
11. Zvi Valdman.
GENERAL MANAGER
Yecheskel Baron
BUSINESS
Manufacturers, marketers and exporters of power, electronic and
telecommunication cables, including flexible wires, rubber insulated cables,
coaxial cables, specially designed cables, industrial power cables, control
cables, telephone
51% of sales are for export.
Manufacturing is divided into 2 divisions: Telecommunications and Power.
Main client is THE ISRAEL ELECTRIC CORP.
Purchasing of copper is via affiliate EXEON INC. (subsidiary of ALPINE).
Head offices are located in
A plant in the Industrial Zone, Sderot/ Shaar Hanegev (60,000 sq.
meters, long term leased from the State) - Power Cables Division, (
A rented plant on an area of 35,000 sq. meters in Industrial Zone, Beit
Shean - Telecommunication and Electronic Cables Division (P.O. Box 189, Beit
Shean 10900),
Rented offices, on an area of 180 sq. meters,
Offices in the
Having 519 employees serving the SUPERIOR Group (had 502 employees in
the end of 2005).
MEANS
Consolidated B/S shows:
31.12.2006 30.06.2007
ASSETS
Current assets:
Cash
and cash equivalents 3,250 26,377
Current maturities on loans
to main customer 41,777 42,895
Customers 237,883 261,419
Other debtors 26,315 24,547
Stock 187,521 279,356
496,746 634,594
Investments, loans and long-term debit 153,907 137,755
Fixed assets (net) 160,349 158,407
Real estate for investment 9,106 8,841
Goodwill 622 622
Intangible assets __2,575 __2,132
823,305 942,351
=======
=======
LIABILITIES
Current liabilities 445,848 377,275
Long term liabilities 216,447 353,540
Minority Rights 2,356 3,340
Equity 158,654 208,196
823,305 942,351
=======
=======
Current market value US$ 46.2 million.
In February 2006, subject announced that it reached an agreement with
Bank Hapoalim Ltd., its main creditor (US$ 85 million), according to which the
bank:
1. Granted subject new loans in total of US$ 12 million (in June 2006).
2. Renewed subject’s US$ 25 million short term credit lines.
In addition, the ALPINE Group signed a deal to invest further US$ 10
million in subject’s equity, and ART P.E., a local investment fund, signed a
deal to invest US$ 5 million in subject for shares allocation (30%).
In September 2006 subject signed a framework deal, in which it may
receive loans up to US$ 7.5 million from its shareholders. On 25.10.06 subject
realized loans in sum of US$ 4 million (US$ 1 million from each of shareholders
nos. 1 and 2 and from its bankers). In return for the debts arrangements, Bank
Hapoalim received options in subject (15%).
In February
There are 13 charges for unlimited amounts registered on the company's
assets, 12 of which are in favor of local banks and one charge (communication
equipment) in favor of a local company.
ANNUAL SALES
Consolidated 2003
sales were
Consolidated
Statement of Income
Year
ended 31.12
2004 2005 2006
Sales 671,909 788,509 1,050,645
Gross profit 87,541 104,626 154,203
Operating income 14,321 20,061 58,013
Profit (loss) before
taxes on income
(18,272) (25,498) 30,949
Net profit (loss)
(20,046) (26,576) 25,636
======= ======= =======
Consolidated sales for the first half of 2007 were
OTHER COMPANIES
PREMIER CABLES LTD., 80%,
H.T. CABLE LTD., 100%,
RISHON BUSINESS CENTRE LTD., 37.50%,
EILAT OPTIC CABLES LTD., 100%, non active,
GOLAN-CAVLEI ZION LIMITED PARTNERSHIP, 50%, a plastic tubes projection
plant, operating from Rishon Le-Zion and another plant,
SUPERIOR CABLES USA INC., 100%,
SUPERIOR CABLES GmbH, 100%,
KAZENERGOKABEL OJSC, 22%,
BANKERS
Bank Hapoalim Ltd.,
The First International Bank Ltd.,
CHARACTER AND
REPUTATION
Nothing unfavorable learned.
Subject is a leading company in its field in
Subject is ISO 9001:2000 certified.
ALPINE GROUP INC. is an industrial holding company in the wire business.
It is a public company whose shares are traded on the NASDAQ Stock Exchange Pink
Sheets (symbol APNI), with current market value of US$ 27.42 million.
ART P.E. LIMITED PARTNERSHIP is a private equity investment fund, 94%
owned by SFK TECHNOLOGIES LTD., an investment company, dealing in consulting,
funds and risk capital investments management. This is a public limited company
whose shares are traded on the Tel Aviv Stock Exchange (current market value of
US$ 40.3 million) and part of SHREM FUDIM KELNER (SFK) Group.
The cables are manufactured according to world standards and all the
manufacturing facilities as well as the headquarters are ISO 9001/9002
approved.
On 31.12.1998 subject’s former shareholders, SUPERIOR TELECOMMUNICATIONS
INC. acquired the Industrial activities of subject’s major competitor, CVALIM –
THE ELECTRIC WIRE AND CABLE COMPANY OF ISRAEL LTD., in consideration of US$
43.5 million, and merged it into subject.
In September 1999, subject acquired the activities, including fixed
assets and stock, from its local competitor in the electrical cables industry,
PICA PLAST LTD., in consideration of US$ 9.7 million.
In April 2000 subject signed an agreement to sell its entire stake (20%)
in LEV OFIR LTD., in consideration of
In March 2001, subject was given a US$ 13.5 million order for high
voltage cables, from the ISRAEL ELECTRIC CORP., and an additional tender of US$
26 million was won in October.
During 2002, subject won further tenders for the ISRAEL ELECTRIC CORP.,
with total value of circa US$ 28 million.
In January 2003, it was reported that subject sold a real-estate asset
in Eilat, for a sum if
In January 2003, it was reported that subject won a tender of THE
ELECTRIC CORP., valued at
In May 2003, it was reported that subject signed a deal to acquire 34%
of a company in
In April 2004, it was reported that the deal was replaced with a new
one, according to which subject will provide equipment for 22% of
KAZENERGOKABEL shares and for US$ 900,000.
In January 2004, it was reported that subject received a
In February 2004, subject announced that it intends to shut down its
Ma'alot plant, and to retrench 45 employees.
In October 2004, it was reported that subject signed a US$ 10 million
deal with THE ISRAEL ELECTRIC CORP.
In March 2005, it was reported that subject signed a US$ 24 million deal
to provide aluminum cables to THE ISRAEL ELECTRIC CORP.
On 27.8.06 subject sign a purchase contract with sister company ESSEX
ELECTRIC INC., for the supply of copper.
The sharp rise in copper prices on world markets (copper is subject's
main raw material) in the recent period affected subject by increasing its
working capital needs, which in view of the financial status (see the
arrangements with bankers above) has been damaging subject's ability to expand
its volume of activities. Yet, subject's first half of 2007 financial results
reflect an improvement in its financial status.
SUMMARY
Good for trade engagements.
Maximum unsecured credit recommended US$
1,500,000.
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)