MIRA
INFORM REPORT
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Report Date : |
30.10.2007 |
IDENTIFICATION
DETAILS
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Name : |
SHANIV PAPER
INDUSTRIES LTD. |
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Registered Office : |
1 Ben Gurion
Road, B.S.R. Tower No. 1, Bnei Brak 51201 |
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Country : |
Israel |
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Date of Incorporation : |
23.2.1988 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturers, processors, marketers and exporters of paper and paper raw
materials for household products, as well as finished paper products (i.e.
tissues, toilet paper, napkins, paper towels, etc.). |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
name
SHANIV PAPER INDUSTRIES LTD.
Offices
1 Ben Gurion Road
B.S.R. Tower No. 1
BNEI BRAK 51201 ISRAEL
Telephone 972
3 799
77 33
Fax 972 3 799 77 30
Plant
Industrial Zone
OFAKIM 80300 ISRAEL
Telephone 972
8 992 25 55
Fax 972 8 992 25 77
HISTORY
Originally established as a private limited company and incorporated as
per file No. 51-127682-6 on the 23.2.1988.
Converted into a public limited liability company, as per file No.
52-004173-2 on the 20.5.1994.
In 1995 published a prospectus offering shares to the public and started
trading on the Tel Aviv Stock Exchange.
Originally incorporated under the name of SHANIV HOUSEHOLD PAPER INDUSTRY
LTD., which changed to the present on the 26.5.1994.
SHARE CAPITAL
Authorized share capital NIS 35,000,000.00, divided into - 35,000,000.00
ordinary shares of NIS 1.00 each,
of which shares amounting to NIS 29,450,868.00 were issued.
SHAREHOLDERS
1. SANO BRUNO’S ENTERPRISES LTD.
(hereinafter SANO), 39.53%, a public limited liability company, whose shares are traded on the Tel Aviv Stock
Exchange, controlled by Bruno Landsberg and his family,
2. Avraham
and Ms. Hila Bernat, including shares held by .A.P.T BERNAT HOLDINGS &
INVESTMENTS LTD., Pesach Bernat and Tamar Shibe, holding together 37.2% of
issued shares,
3. Shalom Lax, 10.24%,
4. Shares
are also traded on the Tel Aviv Stock Exchange.
DIRECTORS
1. Avraham Bernat, Chairman,
2. Mrs. Ilana Bernat, wife of
Avraham,
3. Pesach Bernat, son of
Avraham,
4. Shalom Lax,
5. Ms. Nurit Shnit,
6. Ms. Pnina Dvorin, Attorney,
7. Alon Gellert, Attorney,
8. Ms. Iris Loewenstein,
9 Tzvi Shur.
GENERAL MANAGER
Israel Cafri.
BUSINESS
Manufacturers, processors, marketers and exporters of paper and paper raw
materials for household products, as well as finished paper products (i.e.
tissues, toilet paper, napkins, paper towels, etc.).
Sales are to supermarket chains and retailers, including CO-OP BLUE
SQUARE, RAMI LEVY SHIVUK HASHIKMA, A.B.A. VICTORY,
SUPER-DOSH, etc.
Among clients is also SANO BRUNOS ENTERPRISES.
Operating from a lease held plant on an area of 68,000 sq. meters (of
which 5,400 sq. meters are plant and 6,200 sq. meters built warehouses) in the
Industrial Zone, Ofakim and main offices in 1 Ben Gurion Rd., B.S.R. Tower
No. 1, Bnei Brak.
Having 161 employees.
MEANS
Current market value US$ 24.3 million.
Subject’s plant in Ofakim is an "Approved Enterprise" and as
such enjoys government grants.
On 7.10.1996 a grant of US$ 13 million was endorsed to expand subject’s
plant. In December 1997 an additional sum of US$ 3,660,000 was approved for the
purchase of additional new structures and equipment for the plant in Ofakim.
In October 1998 the Israeli Investment Center approved an investment plan
of subject’s for the sum of US$ 18 million, which is aimed at erecting a third
production line, supposed to increase subject’s manufacturing capability by
35%.
There are 18 charges for unlimited amounts
registered on the company's assets in favor of the State of Israel and Bank
Leumi LeIsrael Ltd. and Israel Discount Bank Ltd.
In May 2007 subject published a prospectus offering bonds to the public
and to institutional investors via the Tel AVIV Stock Exchange, raising a sum
of NIS 70,000,000.
B/S shows:
NIS (thousands)
31.12.2006 30.06.2007
ASSETS
Current assets:
Cash and cash equivalents 1,177 3,337
Short term investments - 32,984
Customers 37,273 41,534
Other debtors 1,371 5,125
Stock 34,675 _36,439
74,496 119,419
Severance pay
fund, net 856 913
Fixed assets 96,004 97,101
Intangible assets ____676 ____663
172,032 218,096
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LIABILITIES
Current liabilities 61,891 40,226
Long term liabilities 36,521 100,130
Equity _73,620 _77,740
172,032 218,096
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ANNUAL SALES
Statement
of Income
NIS
(thousands)
Year
ended 31.12
2004 2005 2006
Sales 97,076 118,080 133,151
Gross profit 9,842 18,243 21,530
Operating income 2,067 9,455 8,325
Profit before tax on income 1,387 7,573 5,512
Net income 1,616 7,154 4,077
====== ====== ======
First half of 2007 sales were NIS 76,895,000 (an 8% increase compared to
the parallel period in 2006), making a gross profit of NIS 9,220,000, an
operating income of NIS 533,000, a loss before tax on income of 1,155,000,
ending with net loss of NIS 870,000
(comparing to a net profit of NIS 1,070,000 in the parallel period of 2006).
OTHER COMPANIES
SANO BRUNO’S ENTERPRISES LTD., developers, manufacturers and marketers of
detergents and toiletries, aerosols, household products, diapers, a leading
company for detergents and cleaning products for the household. Current market
value US$ 296.6 million. 2006 consolidated sales NIS 857 million. This company
also controlls several subsidiaries.
NIRIS COMPANY
LTD., controlled by Shalom Lax, importers, agents and distributors of paper.
The Bernat family also own AVNIT DIAMONDS COMPANY (1986) LTD., processors
and international dealers in diamonds
and controls other companies (e.g. A.P.T. BERNAT HOLDINGS AND
INVESTMENTS LTD.).
BANKERS
Bank Leumi LeIsrael Ltd., Yitzhak Rabin Square Branch (No. 816), Tel
Aviv.
Also working with:
Israel Discount Bank Ltd., branch data not forthcoming.
CHARACTER AND REPUTATION
There is an ongoing conflict between subject's 2 main shareholders, SANO
and the Bernat and Lax families (see more below).
Apart from that, nothing unfavorable learned.
So far we were unable to speak with subject's officials as he was always
too busy. We left messages and sent a fax, which so far remain unanswered.
In the toilet paper market, subject's share estimated at around 10%. The
total paper for household market (not including for printing), is valued at NIS
1 billion annually.
Subject has around 7.5% market share in its lines of products to this
field.
In the raw paper market, subject estimates its shares at 30%.
In August 2001, SANO informed subject it will cut
down its orders, due to problems regarding pricing mechanism between the companies. SANO was subject’s
biggest client, as well as the major shareholder. These steps revealed a
dispute between both major shareholders, the Landesberg
Family and the Bernat Family.
In February 2002, the dispute between the shareholders reached Tel Aviv
District Court. The Bernat family demanded that SANO
sells 4.5% of its shares to the Bernat family in order to restore the equilibrium between both major shareholders,
based on an old vote the company took in 1989, where they agreed to maintain an
equilibrium between both companies holdings.
The Bernat Family is supported by
shareholder Shalom Lax.
In May 2002, the Bernat and
Lax Families appealed to the Court, asking that SANO’s representatives will be
prohibited from participating in subject’s audit committee, due to a conflict
of interests. On 13.2.06 the plaintiffs accepted the Court's proposal to
dismiss their appeal.
In August 2006
subject filed yet another request to the Tel Aviv District Court to issue a
restriction order against SANO for violating the agreement signed between the
parties for manufacturing paper raw products only via subject, claiming SANO is
doing so via PANDA PAPER PRODUCTS (1997) LTD.
SANO signed an
agreement to acquire PANDA in July 2005, however acquisition was cancelled in
March 2006 due to subject's opposition (by asking a restricting order from the
Court).
SHANIV current
claim is that in practice SANO still indirectly controls PANDA (actual
shareholders are a couple of CPAs), claims SANO rejects. In December 2006 the
sides reached an agreement to turn the case to an arbitrator, where the case is
currently pending.
It was reported
(August 2007) that SANO intends to sell its holdings in SHANIV.
In July 2005, subject completed the acquisition of all the activities and
intellectual property of ALL TISSUES INTERNATIONA LTD., manufacturers of
tissues, for a sum of NIS 846,000.
In April 2005, it was reported that subject will erect a new paper
processing line, with an investment of NIS 4.5 million.
Subject plans to connect itself to the natural gas conveyance line in
view of erecting its own power station which will produce electricity for the
Ofakim plant activities.
In October 2007 subject announced it signed a Memorandum of
Understanding with Swiss company TURBOMACH S.A, which will provide and install
the power plant in the Ofakim plant. The 4.8MV power plant is valued € 4
million and further US$ 2 million will be invested in the system in order to
activate.
Subject also awaits the Investment Center Authority approvals for
financial support in the project.
SUMMARY
Good for trade engagements.
Maximum unsecured credit recommended US$ 1,000,000.
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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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%)