MIRA INFORM REPORT
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Report Date : |
19.10.2011 |
IDENTIFICATION DETAILS
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Name : |
LEO SCHACHTER DIAMONDS LTD. |
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Formerly Known As : |
LEO SCHACHTER LTD. |
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Registered Office : |
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Country : |
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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 |
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 & address
LEO SCHACHTER DIAM
Telephone 972 3 576 62 22
Fax 972 3 613 24 89
Diamond Exchange,
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
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
1,000,000 ordinary shares of
of which shares
amounting to
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.
Operating from
owned premises, in Yahalom Building, Diamond Exchange, Floor No.
Also operating from plants in
Having in all some 1,400 employees, of which over 100 employees in
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.
And other foreign
companies/ subsidiaries. We assume that subject is also an affiliate/ partner
in E.M.A.
DIAMONDS LIMITED
PARTNERSHIP.
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),
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
Subject enjoys
excellent reputation in
In 1995 it was
reported that subject’s shareholders acquired 2 floors (21st and 22nd
floors- total of 2,300 sq. meters) in the
In July 2003, it
was reported that subject will own 49% in a new diamond processing plant in
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
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 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
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
Import of rough
diamonds (net) in 2010 grew by 51% to US$ 3,755 million (30% rise in karat
terms), compared with 2009, while import of polished diamonds (net) saw 68%
rise reaching US$ 4,218 million (39% rise in karat terms).
In terms of
target export (polished diamonds) countries, overall in 2010 the
In February 2009,
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.49.14 |
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1 |
Rs.77.58 |
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Euro |
1 |
Rs.67.58 |
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 |
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.