MIRA INFORM REPORT
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Report Date : |
06.02.2012 |
IDENTIFICATION DETAILS
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Name : |
ALLIANCE TIRE COMPANY LTD. |
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Formerly Known As : |
ALLIANCE TIRE COMPANY (1992) LTD. |
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Registered Office : |
P.O. Box 48 (38100), 1 Friedlander Street, Industrial Zone, Hadera 38500 |
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Country : |
Israel |
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Financials (as on) : |
30.09.2011 |
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Date of Incorporation : |
27.05.1992 |
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Legal Form : |
Public Limited Liability Company |
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Line of Business : |
Developers,
manufacturers, importers, marketers and exporters of Off-Highway Tires (OHT),
specializing in Agricultural, Forestry, Industrial and OTR tires. As part of
its service to large local clients, subject offers tire maintenance support. |
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No. of Employees
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916 |
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 : |
Good |
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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
ALLIANCE TIRE
COMPANY LTD.
(Also known as ATG – ALLIANCE TIRE GROUP)
Telephone 972 4 624 06 24;
624 05 00
Fax 972 4 624 05 55
P.O. Box 48 (38100)
1 Friedlander Street
Industrial Zone
HADERA 38500 ISRAEL
HISTORY & LEGAL FORMATION
Originally incorporated as a private limited company, registered as per
file No. 51-168849-1 on the 27.05.1992.
Originally registered under the name C.D.K. INDUSTRIES LTD., which
changed to ALLIANCE TIRE COMPANY (1992) LTD. on 05.11.1992, which changed to
the present name on 17.02.2010.
Subject was established in view of assuming the assets continuing
activities of 2 companies (ALLIANCE TIRES & RUBBER ENTERPRISES LTD. and
SHIMSHON TIRES & RUBBER CO. LTD., both now liquidated), who had been active
in the tire industry 40 years earlier.
Converted into a public limited liability company and registered as such
as per file No. 52-003873-8 on the 18.02.1993.
On the 24.05.1993, published a prospectus offering shares to the public
on the Tel Aviv Stock Exchange (TASE).
Following the
completion of subject's acquisition by new shareholders (see below), subject's
shares were de-listed from trade on 08.07.2007 (yet bonds are still traded by
the public via TASE). Consequently, on 02.07.2007 subject was re-converted into
a private limited company (same latest registration number).
SHARE CAPITAL
Authorized share
capital NIS 1,000.00, divided into -
1,000 ordinary share of NIS 1.00
each,
of which 150
shares amounting to NIS 150.00 were issued.
SHAREHOLDERS
Subject is fully
owned by WARBURG MERGERS (2007) LTD., a wholly-owned subsidiary of Dutch firm
WP HOLDINGS II B.V. NETHERLANDS, held by the global private equity fund WARBURG-PINCUS
,77%, jointly with an Indian entrepreneur, Mr. Yogesh Mahansaria, 21.8%
(remaining shares are held by executives and WP's subsidiaries).
A/m shareholders
acquired full ownership in subject from Eliezer Fishman, former controlling
shareholder (some 60%, others held some 16%), according to a company value of
US$ 48 million. Deal was completed in June 2007.
DIRECTORS
1.
Israel (Izea) Tchetchik, Chairman,
2.
Yogesh Mahansaria,
3.
Mahadevia Vishal Kashyap,
4.
Jules M. Polak,
5.
Raviv Zoller.
GENERAL MANAGER
Ozcan Demirbas.
BUSINESS
Developers,
manufacturers, importers, marketers and exporters of Off-Highway Tires (OHT),
specializing in Agricultural, Forestry, Industrial and OTR tires. As part of
its service to large local clients, subject offers tire maintenance support.
Using brand names:
Top-Star, All-Star, Everest and Alliance.
Goods from import
comprise 4% of Group's sales.
Most of ALLIANCE
Group sales are for export (89.1% in 2010, 81% in 2009). Exports are to some 65
countries in the world. In 2010, 35.7% of all sales were to the European market
(56.3% in 2009), 48%, to the U.S.A (17% in 2009) and 10.9% to the local market
(19% in 2009). Rest of sales is to other countries.
All local sales
are carried out by subsidiary ALLIANCE MARKETING ISRAEL LTD. (subject itself
only sells for export). Among Group’s local clients: Ministry of Defense, BEZEQ
THE ISRAELI TELECOMMUNICATIONS CO. and vehicle leasing companies.
Among foreign raw
materials suppliers: LANXSSES, EXXON (both for rubber).
Tires are imported
from China, Taiwan and the U.S.A.
Via subsidiary,
sole local representatives of COOPER, of USA, and several Chinese firms.
Operating from 3
plants, on total built area of 115,000 sq. meters, (plant and headquarters), on
a plot of 220,000 sq. meters, in 1 Friedlander Street, Industrial Zone, Hadera.
The Group also
operates from branches (marketing, logistic centers) in Haifa, Beit Shemesh,
Kiryat Malachi, Petach Tikva, and branches in the Netherlands and New Jersey
(USA).
Ass of 2009
subject stated operating warehouses in Portland Tennessee, USA and in Italy.
Having 916
employees serving the ALLIANCE Group in Israel (had 748 employees as of end of
2009).
MEANS
Consolidated B/S
shows:
US$
(thousands)
ASSETS 31.12.2010 30.09.2011
Current assets:
Cash
and cash equivalents 3,852 4,886
Other
financial assets 2,508 5,844
Customers
61,102 72,702
Other
debtors 7,921 15,090
Other
assets - 1,649
Stock 84,185 100,654
159,568 200,825
Non-current assets:
Fixed
assets (net) 71,010 66,520
Other
non-current assets 30,873 20,899
101,883 87,419
261,451 288,244
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LIABILITIES
Current liabilities 122,853 144,546
Non-current liabilities 74,759 61,248
Equity 63,839 82,450
261,451 288,244
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As of 31.03.2011
accrued orders are US$ 33 million.
In September 2005, it was reported that subject completed a NIS 40
million capital raise in a public placement of bonds.
In August 2010
subject issued bonds via TASE, raising NIS 135 million.
Subject reported
that in 31.12.2010 it did not meet one of its financial covenants. Subject
received a waiver from the banks on that covenant.
In 2008 US$ 9
million were invested in machinery and equipment, US$ 7.7 million in 2009 and
US$ 7.1 in 2010.
Subject is an
"Approved Enterprise", and as such entitled to tax benefits and State
incentives.
There are 17
charges for unlimited amounts registered on the company's assets, in favor of
Israel Discount Bank Ltd., Bank Hapoalim Ltd., Bank
Leumi Le’Israel Ltd. a leasing company.
REVENUES
Consolidated
Statements of Income
US$
(thousands)
Year
ended December 31st
2008 2009 2010
Sales 226,330 168,958 304,817
Gross profit 49,178 39,066 53,425
Operating income (loss) 14,407 3,166 (10)
Profit (loss) before income tax 11,505 (1,328) (1,089)
Net income (loss)
for the period 8,540 337 (680)
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Consolidate sales for the first 9 months of 2011 were US$ 314,046,000 (41.4% increase compared to the parallel period in 2010), making a gross profit of US$ 68,124,000, an operating income of US$ 32,237,000, and a net profit of US$ 18,076,000.
OTHER COMPANIES
ALLIANCE MARKETING
ISRAEL LTD. (formerly ALLIANCE NORTH MARKETING (1992) LTD.) 100%, importers, purchasers
from parent company and marketers in Israel of pneumatic tires of various sorts
(for vehicles and trucks, agriculture, etc),
ALLIANCETIRE
AMERICAS. INC., (formerly ALLIANCE TIRE CO. (1992) U.S.A. INC)100%, marketer of
subject's products in the U.S.A. and Canada,
ALLIANCE TIRE
EUROPE B.V., 100%, the Netherlands
ALLIANCE TIRE
ITALY S.R.L
ALLIANCE TIRE
AFRICA (PTY)
Subject has
several non-active subsidiaries.
BANKERS
·
Israel Discount Bank Ltd., Main Branch (No. 070), Haifa.
·
Bank Hapoalim Ltd., Hadera
Branch (No. 620), Hadera.
·
Bank Leumi Le’Israel Ltd.,
Netanya Business Branch (No. 717), Netanya.
CHARACTER AND REPUTATION
Nothing unfavorable learned.
However, it should be noted that ALLIANCE Group
went through rough times during the last couple of years facing the depression
in global markets in their fields due to the global economic crisis, adversely
hitting the automotive market, which lead to the fall in orders to subject from
automotive manufacturers. In June 2009 it was reported that ALLIANCE TIRE
Group, as part of Group's reorganization, ceased to manufacture conventional
tires, and sold this activity and production line to ATC TIRES PVT of India, a
company controlled by subject's shareholders. ALLIANCE’s Chairman commented
that the competition pressure forced subject to make that decision. The Group
took streamlining measures, mainly by massive dismissals and re-organization
process.
As part of the cost-saving plan subject decided in the end of 2008 to
transfer and merge all marketing activities of ALLIANCE TIRE MARKETING SOUTH
(1998) LTD. into ALLIANCE MARKETING ISRAEL. Also subject closed its
distribution centers in Beit Shemesh and Kiryat Malachi.
Group has also
been going through a global re-organization process, which started after the
acquisition by the new shareholders, as well as in view of the global market
conditions. Subject has been working with consulting firm ATC, an affiliated
company. As part of the process, structural changes in the global Group were
made, in which the Israeli general manager position scope was decreased.
Indeed, as can be
seen in recent financial reports, subject’s situation improved, thanks to the
measures taken and the recovery trend in global markets.
Subject is the
largest tire manufacturer in Israel.
There are some 80 brands of tires sold by some 35 importers in the local
fiercely competitive market, and subject estimates its market share at 25%.
Subject is ISO-9001:2000 certified.
In March 2004, it was reported that subject signed a deal to become
COOPER local agents in Israel.
In August 2004, it was reported that subject will be included in the US
Government Authorized Suppliers list.
On April 26th
2007 a merger agreement was signed between subject, WARBURG MERGERS AND
ACQUISITIONS COMPANT LTD. and its 100% parent company WARBURG MERGERS (2007)
LTD., part of the change in ownership from the FISHMAN Group. The deal was
completed in July 2007 (after the deal completed WARBURG MERGERS AND ACQUISITIONS
COMPANT LTD was merged into subject and ceased to exist). The structure of the
deal was in a form of "Reverse Triangular Merger" and subject became
a subsidiary of the Israeli company WARBURG MERGERS (2007) LTD. WARBURG-PINCUS
struck subject from trade in the local stock exchange. After the completion of
the merger/take-over, the new shareholders plan to offer the new merged company
shares to the public in a foreign stock exchange and receive a higher price
than from the local stock exchange (so far did not materialized, presumably to
unfavorable market conditions).
WARBURG-PINCUS is a global private equity fund, which made investments
in volume of US$ 20 billion in over 500 companies worldwide. They have already
invested in other local companies as well.
In April 2009 subject ceased to manufacture
tires for private cars and instead focus on manufacturing tires with a higher
added value for the off-highway tire sector.
In May 2009 subject’s Board approved the sale
of old machinery and equipment for the manufacturing of private cars tires to
an affiliate in India for US$ 500,000.
In December 2009
subject's USA subsidiary completed the purchase the "Primex" and
"Galaxy" tire brands (heavy duty tires) of the GPX company which went
into Chapter 11, for the total sum of US$ 43 million in cash plus US$ 5.3
million of liabilities.
In September 2011 subject sold 2 land
properties, for NIS 15,170,400 and NIS 7,400,000, respectively.
In November 2011 an explosion in a water
tank occurred, which halted Group's manufacturing activities for a month.
Subject is covered by insurance. In December 2011 production returned to
normal.
SUMMARY
Good for trade engagements.
Maximum unsecured credit up to several US$
millions.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.48.96 |
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UK Pound |
1 |
Rs.77.47 |
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Euro |
1 |
Rs.64.39 |
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.