MIRA
INFORM REPORT
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Report Date : |
09.12.2011 |
IDENTIFICATION DETAILS
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Name : |
LEO SCHACHTER DIAM |
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Formerly Known As : |
LEO SCHACHTER LTD |
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Registered Office : |
54 Bezalel Street Diamond Exchange, Yahalom Building Ramat Gan 52521 |
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Country : |
Israel |
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Date of Incorporation : |
13.07.1981 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Diamond cutters,
polishers, traders, importers, marketers and exporters. |
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No. of Employees : |
1400 persons |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made on
e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30th, 2011
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Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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Israel |
a2 |
a2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
Company name and address
LEO SCHACHTER DIAM
Telephone 972 3 576 62 22
Fax 972 3 613 24 89
54 Bezalel Street
Diamond Exchange, Yahalom Building
RAMAT GAN-52521 ISRAEL
HISTORY
& LEGAL FORMATION
A private limited company,
incorporated as per file No. 51-089213-6 on the 13.07.1981, as an amalgamation
of the diamond business activities of Late Leo Schachter founded in the USA in
1952 and those of David Namdar in Italy.
It was originally
registered under the name SCHACHTER & NAMDAR POLISHING WORKS LTD., which
changed to LEO SCHACHTER LTD. on the 30.08.2005 and finally changed to the
present name on the 24.07.2006.
During 2004 subject's shareholders decided to split their activities, and
part of the activities were transferred to a newly established subsidiary MOSHE
NAMDAR & CO. LTD., which later in 2007 separated from subject's Group
altogether.
SHARE CAPITAL
Authorized share
capital NIS 1,000.00, divided into –
1,000,000 ordinary shares of NIS
0.001 each,
of which shares
amounting to NIS 75.798 were issued.
SHAREHOLDERS
1. LEO SHACHTER & CO. INC.,
of the USA, 49.5%, owned by the heirs of Leo Schachter, the Tenenbaum and
Greenberg families,
2. FANCY DIAM
3. Lenard Kramer, 5.5%,
4. Moshe Namdar, 3.83%.
DIRECTORS
1. Eliot Tenenbaum, President & Co-General
Manager,
2. David Greenberg, Co-General Manager,
3. Dov Tenenbaum,
4. Marc Tenenbaum,
5. Jonathan Austin.
BUSINESS
Diamond cutters, polishers,
traders, importers, marketers and exporters.
Almost all sales
are for export.
Among local
clients: B. BRIZA COLORS, MULTI-NATIONAL DIAMONDS, R.E.S. DIAMONDS, AVNER
EIZENSTEIN DIAMONDS.
Among local
diamond suppliers: OFER MIZRAHI DIAMONDS
Operating from
owned premises, in Yahalom Building, Diamond Exchange, 22nd Floor,
in 54 Bezalel Street (also referred to as 21 Tuval Street), Ramat Gan.
Also operating from plants in Botswana, Thailand and China (and an
affiliate in India, operating under the name KAMA SCHACHTER), and offices in
South Africa, Antwerp, Geneva, New York, Toronto, Hong Kong, Bangkok and Dubai.
Number of employees unavailable, though based on reports and estimations,
having in all some 1,400 employees, of which over 100 employees in Israel.
MEANS
Financial data not
forthcoming, but known to be financially solid.
Subject owns a Sight from DE BEERS for many years. According to reports
from February 2004, they are the largest receiver from a DE BEERS Sight in
volume of US$ 150-200 million per year.
There are 5 charges for unlimited amounts
registered on the company's assets, in favor of Bank Leumi Le’Israel Ltd. and
Israel Discount Bank Ltd.
ANNUAL SALES
According to the data published by the Israel
Supervisor on Diamonds in the Ministry of Industry & Trade, export of
polished diamonds by subject (actual overall sales presumed to be higher, as
there are local sales of polished diamonds and may have sales of rough diamonds
as well), were as follows:
2005 sales for export (net) were US$ 418,000,000.
2006 sales for
export (net) were US$ 460,000,000.
2007 sales for
export (net) were US$ 446,000,000.
2008 sales for
export (net) were US$ 352,000,000.
2009 sales for
export (net) were US$ 215,000,000.
2010 sales for
export (net) were US$ 359,000,000.
OTHER COMPANIES
LEO SCHACHTER DIAM
SHACHTER AND
NAMDAR HOLDINGS LTD., a holding company.
E.M.A. DIAM
And other foreign
companies/ subsidiaries
S.N.W LTD.
Subject’s
shareholders also hold and involved in many other companies.
BANKERS
Israel Discount Bank Ltd., Diamond Exchange Branch (No. 080), Ramat Gan.
CHARACTER AND REPUTATION
Nothing
unfavorable learned.
Subject’s
officials refused to disclose any details, as a matter of policy.
According to the
report published by the Israel Supervisor on Diamonds in the Ministry of
Industry and Trade, subject was ranked 2nd in the 2010 list of Israel's largest
polished diamonds exporters, same ranking as in 2009, 2008, 2007, 2006 and
2005. Subject is only 2nd to L.L.D. DIAM
Subject enjoys excellent
reputation in Israel and world wide.
In 1995 it was
reported that subject’s shareholders acquired 2 floors (21st and 22nd
floors- total of 2,300 sq. meters) in the Yahalom Building, in consideration of
US$ 10 million. Part of the area was rented, the rest used by subject.
In July 2003, it
was reported that subject will own 49% in a new diamond processing plant in
Canada.
In February 2004,
it was reported that subject will establish a partnership with WILLIAM GOLDBERG
DIAM
In May 2005, it
was reported that the SCHACHTER & NAMDAR Group acquired a 3,000
sq. meters plot in central Tel Aviv, for a sum of US$ 15 million. The plot is
designed for 18 story building, for residential and commercial purposes.
In February 2004 subject announced a structural change in the SCHACHTER
& NAMDAR Group, initially the establishment of a subsidiary MOSHE NAMDAR
& CO. LTD., that, in order to maximize potential where each party will
focus on different markets. In the beginning of 2007 the split was completed
between the activities of the Namdar Brothers, Moshe Namdar and Abraham Namdar
and the LEO ASCHACHTAR Group.
It was also
reported that subject is operating to strengthen its global activities in
addressing the fast emerging Chinese market, and by strengthening the
"Leo" diamonds brand in the American, British and Italian markets.
In March 2007 it
was reported that subject is suing NIS 10 million from local contractor David
Appel, claiming he failed to return on time a loan given to him in
It was reported in
late 2008 that as part of the re-organization in subject’s Group designed to
save costs in view of the global economic crisis and its sever effect on the
diamond industry, subject had to dismiss several employees and closed down
local sorting activities, while polishing activities have been already carried
out by sub-contractors. The effects of the crisis can be seen in the plunge in
subject’s sales for export.
In the beginning
of 2009 subject suffered from the collapse of two main American diamond chains
(subject was mentioned as one of their suppliers/ creditors) CHRISTIAN BERNARD
and SHANE that went bankrupt.
As could be seen
in 2010 reported sales, it appears that subject has recovered from the 2009
crisis, as most of the diamond industry has in 2010.
During 2010 and
2011 local diamond companies have been recovering from one of the worst
depressions in the global diamond sector due to the severe economic crisis in
global markets that erupted in September 2008. The diamond sector experienced
almost an entire freeze and collapse in sales of about 70% in the peak of the
crisis and 2009 export diamonds shrank by some 40%. Only since mid
According to the
President of the Israeli Diamonds Association, local diamond sector in general
managed to cross the crisis, despite the sheer difficulties, including the fact
that local banks contracted credit given to local diamond firms. The President
said that trade in the sector rolls annual turnover of US$ 25 billion while
total debt to the banks stands on US$ 1.5 billion, down from US$ 2.4 billion in
the eve of the crisis. The Ministry for Industry & Trade also assisted the
local diamond exporters by providing bank guarantees in total scope of NIS 1
billion.
Overall in 2010,
export (net) of polished diamonds was US$ 5,832 million, representing 48%
increase from 2009 (when it noted 37% decrease from 2008, also much less than
In the 1st
half of 2011, 34% increase was noted comparing to the parallel period in 2010
with net export of polished diamonds of US$3,400 million. Export of
rough diamonds also climbed almost 40%, reaching US$ 2,250 million.
Import of rough
diamonds (net) in 2010 grew by 51% to US$ 3,755 million (30% rise in karat
terms) compared with 2009, and by 36.7% in 2011 1st half (compared
to 2010), summing up to US$2,500 million. Import of polished diamonds (net) saw
68% rise in 2010 reaching US$ 4,218 million (39% rise in karat terms), and
almost 50% rise in 2011 1st
half (US$ 2,800 million).
In terms of target
export (polished diamonds) countries, overall in 2010 the USA returned to be
main destination, with 41% of total export (48% in 2011 1st half).
This comes after earlier in 2010, for the first time Far East markets became
Israel’s diamond industry’s main target, with sales to Hong Kong being close to
these of the USA, to whom sales decreased dramatically in view of the severe
economic crisis (traditionally sales to the USA comprised some 60%-65% of total
export). In 2010 and early 2011, export to Hong Kong comprised around 26% of
sales. Other main target countries include Belgium, India, Switzerland and
China.
In February 2009,
Israel was ranked as the world’s largest exporter of cut diamonds, followed by
India, Belgium and South Africa.
SUMMARY
Notwithstanding the refusal to disclose
financial and other details, considered good for trade engagements.
DIAMOND INDUSTRY –
INDIA
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From time immemorial, India is well known in the world
as the birthplace for diamonds. It is difficult to trace the origin of
diamonds but history says that in the remote past, diamonds were mined only in
India. Diamond production in India can be traced back to almost 8th
Century B.C. India, in fact, remained undisputed leader till 18th
Century when Brazilian fields were discovered in 1725 followed by emergence of
S. Africa, Russia and Australia.
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The achievement of the Indian diamond industry was
possible only due to combination of the manufacturing skills of the Indian
workforce and the untiring and unflagging efforts of the Indian diamantaires,
supported by progressive Government policies.
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The area of study of family owned diamond businesses
derives its importance from the huge conglomerate of family run organizations
which operate in the diamond industry since many generations.
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Some of the basic traits of family run business
enterprises include spirit of entrepreneurship, mutual trust lowers transaction
costs, small, nimble and quick to react, information as a source of advantage
and philanthropy.
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Family owned diamond businesses need to improve on
many fronts including higher standard of corporate governance, long-term
performance – focused strategies, modern management and technology.
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The diamond jewellery industry in India today may be
more than Rs 60000 mil and is rated amongst the fastest growing in the
world. Indi ranks third in the world in domestic diamond consumption.
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Utmost caution is to be exercised while dealing with
some medium and large diamond traders which are usually engaged in fictitious
import – export, inter-company transactions, financially assisted by banks. In
the process, several public sector banks lost several hundred million rupees.
They mostly diverted borrowed money for diamond business into real estate and
capital markets.
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Excerpts from Times of India dated 30th
October 2010 is as under –
DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT
This could be the biggest credibility crisis
the Indian diamond industry has ever faced. Fifteen banks run the risk of
losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two
months ago, they had not repaid these dues. Bankers believe many
diamantaires borrowed money during the economic downturn two years ago and
diverted funds to businesses like real estate and capital markets. Many of
themselves made money from these businesses but their diamond companies have
gone sick and declared insolvency.
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Most of the money borrowed from the banks in the name
of their diamond business has been diverted in real estate and the share
market. The banks are not in a position to seize their properties because in
many cases, these were purchased in the name of their relatives and friends.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.51.78 |
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1 |
Rs.81.32 |
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Euro |
1 |
Rs.69.42 |
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 |
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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NB |
New Business |
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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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.