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Report Date : |
10.12.2012 |
IDENTIFICATION DETAILS
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Name : |
BEZEQ INTERNATIONAL LTD. |
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Registered Office : |
Petach Tikva 4951731 |
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Country : |
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Financials (as on) : |
30.09.2012 |
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Date of Incorporation : |
05.04.1995 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Subject provides internet services (access, hosting, data, storage,
cloud, equipment, WiFi, on line security, as well as value added service) for
the business and private sectors. |
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No. of Employees : |
2,262 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
-- |
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 – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2011) |
Current Rating (30.06.2012) |
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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 |
israel - ECONOMIC OVERVIEW
Israel has a
technologically advanced market economy. It depends on imports of crude oil,
grains, raw materials, and military equipment. Cut diamonds, high-technology equipment,
and agricultural products (fruits and vegetables) are the leading exports.
Israel usually posts sizable trade deficits, which are covered by tourism and
other service exports, as well as significant foreign investment inflows. The
global financial crisis of 2008-09 spurred a brief recession in Israel, but the
country entered the crisis with solid fundamentals - following years of prudent
fiscal policy and a resilient banking sector. The economy has recovered better
than most advanced, comparably sized economies. In 2010, Israel formally
acceded to the OECD. Natural gasfields discovered off Israel's coast during the
past two years have brightened Israel's energy security outlook. The Leviathan
field was one of the world's largest offshore natural gas finds this past
decade. In mid-2011, public protests arose around income inequality and rising
housing and commodity prices. The government formed committees to address some
of the grievances but has maintained that it will not engage in deficit spending
to satisfy populist demands.
|
Source : CIA |
BEZEQ
Telephone 972 3 925 73 02
/33
Fax 972 3 925 73
48; 76 501 43 48
P.O. Box 7097, Petach Tikva (4917002)
40 Hashacham Street
Kiryat Matalon
PETACH TIKVA 4951731 ISRAEL
A private limited company, incorporated as per file No. 51-213372-9 on
the 05.04.1995, under the name BEZEQ GLOBAL SERVICES LTD., which changed its
name to the present on 09.01.1996.
Subject was established in view of assuming the international calls
operations of BEZEQ THE ISRAELI TELECOMMUNICATIONS CO. LTD., the local telecom
operator originally established in 1948 as a government agency, converted into
a public limited liability company, incorporated on the 21.08.1980.
2 companies were merged into subject in 2007:
BEZEQCALL COMMUNICATION LTD. on the 11.02.2007.
ACTCOM – ACTIVE COMMUNICATIONS LTD. on the 09.07.2007.
Subject was given a license for international
communication services by the Ministry of Communications in 1996 (license was
extended to until 2022).
Authorized share capital NIS 200,000,000.00, divided into -
2,000,000,000 ordinary shares of NIS 0.10 each,
of which 1,136,986,301 shares amounting to NIS 113,698,630.10 were
issued.
Subject is a fully owned subsidiary of BEZEQ THE ISRAELI
TELECOMMUNICATIONS CO. LTD. (hereinafter BEZEQ), a public limited company,
whose shares are traded on the Tel Aviv Stock Exchange.
BEZEQ is controlled (30.97%) by B. COMUNICATIONS LTD., controlled
(79.94%) by INTERNET GOLD - GOLDEN LINES LTD., publicly traded on TASE and NASDAQ Stock Exchange, controlled (79%) by EUROCOM
COMMUNICATIONS LTD., owned (80%) by Shaul Elovitch – chiefly - and his son Erez Elovitch,
and (20%) by his brother Joseph Elovitch (Elovitch family's
main holdings is via EUROCOM HOLDINGS (1979) LTD.).
In April 2010 Shaul Elovitch and EUROCOM Group which he controls,
acquired control of BEZEQ for NIS 6.5 billion from the APAX-SABAN-ARKIN Group.
1. Shaul Elovitch, Chairman
of BEZEQ Group,
2. Amikam Shorer,
3. Ms. Orna Elovitch Peled,
4. Felix Cohen,
5. Joshua Rosensweig.
Isaac Benbenisti.
Subject provides internet services (access, hosting, data, storage,
cloud, equipment, WiFi, on line security, as well as value added service) for
the business and private sectors.
Also international telecommunications operator, providing international communication services (known also as
"014" for the prefix) to 240 destinations worldwide, providing a wide
range of telecommunication services, including voice solutions with direct
overseas dialing, calling cards, ISDN services which enable voice, data, and
video conferencing transmissions, solutions for data communications, fast connection
Internet solutions and hosting services..
Also, since 2007 and the merger with BEZEQCALL, operating in the
end-user network solutions and PBX services.
Subject has business relationship with some 180 foreign operators, the
main ones being: AT&T, PALTEL, ROSTELECOM, BRITISH TELECOM.
Main international communication infrastructure supplier: MEDITERRANEAN
NAUTILUS LTD.
Among other suppliers (products, systems and services): NORTEL NETWORKS,
ALCATEL, SIGVALUE, IBM GLOBAL SERVICES, AVAYA, EUROCOM, LG, CISCO, JUNIPER,
MATRIX I.T., etc.
Among other service providers ALCATEL-LUCENT SUBMARINE NETWORKS
(underwater cable – see more in CHARACTER).
Operating from rented premises, on an area of 7,000 sq. meters, in 40
Hashacham Street, Kiryat Matalon Industrial Zone, Petach Tikva.
Landlord: AVNET HOSHEN. Also operating from rented premises in 5 Hazoran
Street, Industrial Park Netanya South, Netanya (the premises of BEZEQCALL), and
from a server farm in Tel Aviv.
Having 2,262 employees, including outsourcing employees, as of the end
of 2011 (had 2,112 employees at end of 2010).
Having some 15,600 employees as of end of 2011 serving BEZEQ Group.
B/S in essence, shows:
NIS (millions)
31.12.2011 30.09.2012
ASSETS
Current assets 500 556
Non-current
assets 768 796
1,268 1,352
===== =====
LIABILITIES
Current liabilities 292 362
Non-current liabilities 147 209
Equity 829 781
1,268 1,352
===== =====
Parent company BEZEQ current market value US$ 3,391.3 million.
BEZEQ total B/S for 30.09.2012 (in brackets 31.12.2011) was NIS 16,216
million (NIS 17,331 million), equity NIS 1,951 million (NIS 2,688 million).
There are 5 charges for unlimited amounts registered on the company’s
assets, in favor of Bank Leumi Le’Israel Ltd. and local companies (last charge
placed in November 2009).
Statement of Income
NIS
(millions)
Year
ended 31.12
2009 2010 2011
Revenue 1,318 1,380 1,354
Gross profit 541 558 566
Operating income 261 320 241
Profit before taxes on income 271 318 240
Net income 200 253 182
===== ===== =====
Consolidated first 9
months of 2012 revenues were NIS 1,001 million (1% decrease from the parallel
period in 2011), making gross profit of
NIS 405 million, operating profit of NIS 157 million, making a net profit of
NIS 115 million.
BEZEQ THE ISRAELI TELECOM. consolidated 2011 sales were NIS 11,373
million, making a net profit of NIS 2,061 million.
BEZEQ THE ISRAELI TELECOMMUNICATIONS CO. LTD., parent company, Israel’s
main wire line Telecom operator, providing a wide range of wire-line and
wireless telecommunication services..
Other main holdings:
PELEPHONE COMMUNICATIONS LTD., 100%, operators of cellular networks and
allied services, including sales of end equipment. Israel's 3rd
largest cellular operator.
D.B.S. SATELLITE SERVICES (1998) LTD. (known as “YES”), 49.8%, providers
of digital satellite broadcasting services. EUROCOM Group holds the reminder of
shares.
WALLA! COMMUNICATIONS LTD, 100%, operators of Internet popular portal.
BEZEQ GOLD (HOLDINGS) LTD., 100%,
BEZEQ ON-LINE LTD., 100%, provides call center services to subject’s
customers.
Also controlled by Shaul Elovitch, part of EUROCOM Group:
B. COMUNICATIONS LTD. (Nasdaq-GS:BCOM), a holding company, current
market value US$ 141.8 million,
EUROCOM-COMMUNICATIONS LTD., heading the EUROCOM Group's communications
operations, including import, marketing and distribution of telecommunications
systems and equipment, and consumer electronic (entertainment) equipment and
appliances – switchboards, telephones and cellular phones, decoders, LCD TV
sets, etc. EUROCOM Group is sole local agents and marketers of GE (in DECT
phones) and others.
Also part of EUROCOM Group:
INTERNET GOLD – GOLDEN LINES LTD. (Nasdaq:IGLD), 79%, a holding company,
current market value US$ 81 million.
SATLINK COMMUNICATIONS LTD. providing connectivity for TV broadcasts via
satellite communications;
SPACE-COMMUNICATION LTD. (SPACECOM), 68.7%, publicly traded on TASE
(current market value US$ 282 million), operators and marketers of satellite
services from the “AMOS” Satellite.
TRANS-GLOBAL INDUSTRIES PTE LTD., importers and marketers of
telecommunications equipment
EUROCOM CELLULAR COMMUNICATIONS LTD. (known as EUROCOM-NOKIA), sole
local agents and marketers of NOKIA,
EUROCOM DIGITAL COMMUNICATIONS LTD., importers and marketers of office
electronic equipment, sole local agents of PANASONIC.
EUROCOM INDUSTRIES (1986) LTD.,
TEL-BIT ELECTRONICS LTD., customized networking solutions provider,
EUROCOM NETWORKS 21 LTD.
SATCOM SYSTEMS LTD., 79.9%, publicly traded on TASE. Current market
value US$ 15.7 million. Among subsidiaries GILAT SATCOM LTD. (100%),
communication solutions provider
D.M. ENGINEERING LTD., overall communications solutions to businesses,
ENLIGHT RENEWABLE ENERGY LTD., 47.9%, operates in the renewable energy
field, publicly traded on TASE. Current market value US$ 16.5 million.
EUROCOM D.B.S. LTD.
E.G.R.E. LTD., 39%, real estate, publicly traded on TASE, RADIUS
BROADCASTING LTD., popular radio channel.
The First International Bank of Israel Ltd., Tel Aviv Main Branch (No.
046), Tel Aviv, account No. 435104.
Union Bank of Israel Ltd., Tel Aviv Main
Branch (No. 063), Tel Aviv,
account No. 675100/99.
Bank Leumi Le’Israel Ltd., Central Branch
(No. 800), Tel Aviv,
account No. 467500/91.
Israel Discount Bank Ltd., Tel Aviv Main
Branch (No. 010), Tel Aviv,
account No. 112240.
A check with the Central Banks' database did not reveal anything
detrimental on subject’s a/m accounts.
There are several lawsuits, investigations and class motion acts against
subject, none of them seem to be significant.
Apart from that, nothing unfavorable learned.
Subject is a leading company in its fields: 37.5% market share as an
Internet Provider of in 2011 (35.9% in 2010). The Internet Provider market has
4 main suppliers. In the local Internet market subject has a high penetration
rate (73% connected).
Subject has 30% market share in international calls market in 2011
(30.7% in 2010). The international calls market, with 6 local operators, is
characterized in recent years in decreasing trend in calls volume of 4.4% in 2011
and 5% decrease in 2010.
BEZEQ Group is the leading telecommunication service provider in Israel.
Until 2005, it was the sole wire line operator and following the Government
reform, the market has opened up to competition and the local
telecommunications sector has been going through drastic structural changes in
recent years, as part of the government efforts to increase competitiveness in
the sector, in favor of the private consumers. In the beginning of 2008 the policy of
telephone numbers mobility entered into force which led to desertion of
subscribers.
BEZEQ still has hegemony over most of the
telecom market (itself and via subsidiaries). As of end of 2011 BEZEQ had 63% market share
in the household sector (65% in 2010) and 76% in the business sector (78% in
2010). BEZEQ has been considered a monopoly and as such bounded to certain
restrictions, which has been affecting BEZEQ’s operations as well. However, in
view of the decrease in market share (i.e. below 85%) the Ministry of
Communications endowed BEZEQ certain relieve in the prices and services it
provides.
As of end of 30.09.2011 BEZEQ has 2,299,000 telephone subscribers
(2,367,000 subscribers in the end of 2011) and 1,153,000 fast Internet
subscribers (1,111,000 subscribers in the end of 2011).
In April 2010, in a momentous deal, Shaul Elovitch and EUROCOM Group
which he controls completed the acquisition of the control of BEZEQ from Haim
Saban Group, APAX PARTNERS investment fund and Mori Arkin, for NIS 6.5 billion.
EUROCOM Group is Israel’s largest privately owned communication group,
with presenters also in the international market. In recent years, EUROCOM
Group has carried out several major acquisitions, in the way to strengthening
its hold in the local telecom and consumer electronics market. In 2006, EUROCOM
acquired GOLDEN LINES 012 from the FISHMAN Group for US$ 140 million, and
merged it with INTERNET GOLD, creating SMILE COMMUNICATIONS 012. Later,
acquired control in BEZEQ Group.
EUROCOM Group also operates in the local real estate market, financial
market and invests in hi-tech start-ups. EUROCOM Group's 2009 sales were
estimated to be NIS 3,150 million, prior to the BEZEQ Group acquisition in
2010.
In December 2006 subject signed a deal to acquire 100% of ACTCOM –
ACTIVE COMMUNICATIONS LTD., local most veteran IP provider. ACTCOM, located in
Haifa, will continue to operate as an independent subsidiary.
In mid 2006 all activities of GOLDNET COMMUNICATIONS SERVICES LP (known
as "Bezeq Gold"), 75% subsidiary of BEZEQ, were transferred into
subject. GOLDNET deals in secured data transmission solutions.
In July 2006 subject and BEZEQCALL COMMUNICATION LTD., both BEZEQ 100%
subsidiaries, started a process of merging their activities into subject's, as
part of BEZEQ's strategic move facing local competition in the communications
market. BEZEQCALL operates in the end-user network solutions, with market share
of 45%. The merging with subject, in addition of an earlier merger of BEZEQ
GOLD into subject, creates a larger company which will serve as a one-stop
supplier of VoIP solutions to customers.
In October 2006, subject signed agreement with 2+(TWO PLUS) WIRELESS
SOLUTIONS LTD. for the establishment of a partnership called B-ZONE, that will establish,
support and manage networks which allow wireless fast Internet surfing in
public places.
In January 2007 NETVISION Group completed a
strategic move, after which it controls one third of the local Internet market
and the international calls services market. NETVISION
acquired BARAK ITC, one of the leading 3 international calls operators, where
the others are subject and SMILE 012, with another two smaller operators
(EXPHONE 018 and TELZAR 019).
In 2007, subject and DSNR Group, jointly established BEZECOM LTD. in
view of expanding international telecommunications activities, providing affordable and cheap international calls worldwide.
In March 2008 subject signed an agreement with partnership GIL A.R.
TELECOM SYSTEMS, according to which subject acquired all the partnership
activities of sale, rental and servicing of communications and switchboard
products of AVAYA OFFICE.
In January 2009, subject inaugurated a new server cluster, on an area of
1,000 sq. meters in its Petach Tikva compound with reported investment of NIS
25 million. Subject’s server cluster is the largest in Israel. PC JUNIPER and
CISCO were selected for supplying the equipment for the project.
In June 2009 it was reported that subject won a tender to supply
international communication services to the Government Ministries and the
Israeli Defense Force, estimated at over NIS 10 million annually.
In September 2009 it was reported that subject won a tender to be the
Internet Provider to the Israeli Defense Force for the next 5 years. The deal
is estimated at several tens NIS millions.
In January 2010 it was reported that subject will be sole local
representatives of BRITISH TELECOM in Israel.
In April 2010 subject acquired from the HAARETZ
Group its holdings (32.6%) in WALLA!, one of Israel's leading internet portals,
for the sum of NIS 89 million, in September 2010 subject acquired further 5%
for NIS 13.6 million, reaching a holding of 71.76% in WALLA!. On the 21.09.2010
subject sold its holdings in WALLA! to parent company BEZEQ, for NIS 196
million. In April 2012, following a successful tender offer, BEZEQ reached full
ownership of WALLA!.
In April 2010 it was reported that subject will market MICROSOFT's
online software products, investing in an advertizing campaign NIS 2 million.
In July 2011 BEZEQ's Board approved to enter negotiations with regard of
the purchase of a plot in Petach Tikva of 25,000 sq. meters, designed for
logistics and offices, to replace existing premises by the end of 2015. The
cost of the shift project, including the cost of the real estate property is
estimated at NIS 700 million.
In July 2011 subject completed the lay-out of the infrastructure for the
new undersea cable, with investment of hundred NIS millions. The cable, manufactured
by ALCATEL-LUCENT with 7.2 terra-bite capacity will be physically laid shortly
connecting the offices in Petach Tikva through the sea 2,300km long to Italy,
competing the sole provider until now (MED NAUTILUS).
In January 2012 subject started providing high speed internet services
(POWER NGN) utilizing the a/m cable.
In May 2012 it was reported that subject will supply the HOT Group
(among BEZEQ Group's rivals) the platform for its overseas calls.
Good for trade engagements.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.20 |
|
|
1 |
Rs.86.99 |
|
Euro |
1 |
Rs.70.22 |
INFORMATION DETAILS
|
Report
Prepared by : |
SDA |
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 |
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 |
|
-- |
NB |
New Business |
-- |
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.