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Report Date : |
04.05.2012 |
IDENTIFICATION DETAILS
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Name : |
HOD - ASSAF
METALS LTD. |
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Formerly Known As : |
HOD METALS LTD |
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Registered Office : |
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Country : |
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Financials (as on) : |
31.12.2011 |
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Date of Incorporation : |
01.03.1992 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Traders in steal for construction, and for other uses, as well as other commercial products. |
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No. of Employees : |
664 |
RATING & COMMENTS
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MIRAs 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 : |
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 March 31st, 2012
|
Country Name |
Previous Rating (31.12.2011) |
Current Rating (31.03.2012) |
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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 |
HOD - ASSAF METALS LTD.
Telephone 972 4 901 50 00
Fax 972 4 955 22 30
P.O. Box 493
Kiryat Haplada, Industrial Zone
AKKO 2410401 ISRAEL
A private limited company, incorporated as
per file No. 51-166292-6 on the 01.03.1992.
Originally established under the name
SPALAMINO LTD., which changed to HO METALS (TRADING 1992) LTD. on the
16.07.1992, which changed to HOD METALS LTD. on the 07.02.1993, which changed
to the present name on the 11.10.2007.
Authorized share capital NIS 19,800.00,
divided into -
19,800
ordinary shares of NIS 1.00 each,
of which 100 shares amounting to NIS 100.00
were issued.
Subject is fully owned by HOD
ASSAF INDUSTRIES LTD., a public limited company, shares of which are traded
on the Tel Aviv Stock Exchange, controlled (74.8%) by Abraham Shani (formerly
Sheinbaum).
1.
Avraham Shani, Chairman of HOD ASSAF
INDUSTRIES,
2.
Joseph (Yosi Anglister),
General Manager of subject and HODASSAF INDUSTRIES Group.
Traders in steal for construction, and for
other uses, as well as other commercial products. Subject serves as the Group's
trading arm (including debt collecting).
Also operating as a holding company.
On the 29.12.2011 HOD ASSAF INDUSTRIES's
board approved a restructure in the HOD ASSAF Group, in which all steel
activities in Israel will be handled by subject, turning HOD ASSAF INDUSTRIES
into a holding company. The restructure is awaiting creditors, shareholders and
court approvals. Subject's activities will include, besides trade (as above),
also steel melting and processing plant, manufacturing
steel bars from scrap metal.
Operating from Group's main premises (very long leased from the State),
including melting, processing and scrap processing plants, on total plot of
over 200,000 sq. meters (on which some 40,000 sq. meters built), in Kiryat
Haplada, Industrial Zone, Akko (or "Acco", "Acre"in Latin).
Group also operates from 2 plants (Rolling and Processing), on total area of
104,000 sq. meters (30,000 sq. meters built) in the Industrial Zone, Kiryat
Gat.
Having no salaried employees, receiving
serviced from parent company.
Having 1,011 employees serving the HOD ASSAF
Group, of which 664 employees in Israel (had 880 employees in the end of 2010).
Financial data is
included in the consolidated financial statements of parent company, HOD
ASSAF INDUSTRIES LTD., which shows:
NIS
(thousands)
31.12.2010 31.12.2011
ASSETS
Current assets:
Cash 7,846 12,539
Customers 237,668 296,579
Other debtors 35,374 33,447
Other assets - 178
Stock 199,662 305,718
480,550 648,461
Non-current
assets:
Pre-paid operation leasing expenses (net) 13,084 26,933
Fixed
assets (net) 233,139 240,713
Other non-current assets 3,768 7,944
249,991 275,590
730,541 924,051
======= =======
LIABILITIES
Current liabilities 236,241 417,460
Non-current liabilities 32,745 29,470
Equity 461,555 477,121
730,541 924,051
======= =======
Parent company HOD ASSAF INDUSTRIES current market value US$
43.7 million.
Assets attributed to the local steel
activities 31.12.2011: NIS 816,536,000.
There are 7 charges for unlimited amounts
registered on the company's assets (financial assets and fixed assets), in
favor of Bank Leumi Le'Israel Ltd., Bank Hapoalim Ltd. and Israel Discount Bank
Ltd. (last charge placed December 2010, prior 2 charges placed October 2001).
REVENUES
HOD
ASSAF INDUSTRIES LTD.
Consolidated
Statement of Income
NIS
(thousands)
Year
ended 31.12
2009 2010 2011
Sales 841,593 975,249 1,262,114
Gross profit 66,783 68,549 105,601
Operating profit (loss) (21,576) 12,571 38,299
Profits (loss) before taxes on income (23,146) 6,721 29,536
Net profit (loss)
(16,803) 5,418 16,183
======== ======= ========
2011 revenues of steel activities were NIS
1,034,344,000.
Subject ended 2009 with a net profit of 250,000.
Subject ended 2010 with a net profit of 145,000.
Subject ended 2011
with a net profit of 175,000.
HOD SELA LTD.,
51%, dealers in flat iron, professional iron and piping,
TAMA LTD.,
Guernsey Island, 100%, owns:
GAMMA INDUSTRIES
SRL, Romania, 100%, holds S.C SARME SI CABLURI S.A. ("SIRME"),
Romania, 99.9%, plant in Romania, ORON
HOD ASSAF INDUSTRIES LTD., parent company,
independently and via subsidiaries, traders, manufacturers, processors,
exporters and marketers of metal goods for the construction, industrial and
agricultural sectors.
Also holds (all 100% subsidiaries unless
otherwise mentioned):
HOD GLOBAL WIRE
LTD., manufacturers of steel wires, fully owns ASSAF CONDUCTORS LTD.
HOD ZAMIR EQUIPMENT & BUILDING
SUPPLIES LTD., 60%, traders, importers and marketers of building supplies and
materials, fully owns ISCOL TRADE LTD., importers and marketers of wood and timber
for the construction sector, and electricity poles.
STEEL RECYCLING
LTD., established in 2006, purchasing steel scraps and processing them for the
melting in Group's plant.
HOD - ASSAF STEEL LTD., Groups steel melting plant in Acre, manufacturing steel bars from scrap
metal.
Bank Leumi
Le'Israel Ltd., Haifa Main Branch (No. 876), Haifa.
Bank Hapoalim
Ltd., Hamifratz Branch (No. 791), Haifa.
Also known to be working with Israel
Discount Bank Ltd.
Nothing unfavorable learned.
Despite our efforts, we were unable to speak with subject's officials,
as they were always unavailable. We left messages which so far remain
unanswered.
HOD ASSAF Group is one of the leading and largest suppliers of steel to the
local industry, with daily production of 1,200 tons of steel.
As noted above (BUSINESS), HOD ASSAF Group has been going a structural
change, in which subject is to concentrate all Group's steel activities in
Israel, including manufacturing activities from sister companies HOD - ASSAF STEEL and STEEL RECYCLING. All Romanian activities will become a separate
division, under TAMA LTD. A 3rd segment will be of
"Others", including HOD ZAMIR, ISCOL, HOD GLOBAL WIRE and HOD SELA ((which will remain subject's 51% subsidiary).
In August 2006 the Ministry of Environment issued a warning letter to HOD
ASSAF of shutting down their plant for causing air pollution above the allowed
standard. As a result, HOD ASSAF purchased and installed a system for
decreasing the emissions causing air pollutions, according to plan approved by
the Ministry of Environment, in value of US$ 2 million.
In that regard, in December 2006, 4 citizens filed a class action motion
against HOD ASSAF and Group's former General Manager Andre Vaida.
In February 2009 HOD ASSAF reached a compromise in claim against them
regarding environmental damages, in which HOD ASSAF will invest some NIS 15
million in new procedures, donate NIS 330,000 to an environment fund and also
pay legal expenses NIS 370,000. In February 2012 the Haifa District Court
approved the compromise.
In May 2009 subject and parent company HOD ASSAF INDUSTRIES (as well as YEHUDA STEEL Group, the 2 Israeli
manufactures of reinforced steel), requested from Ministry of Industry, Trade
and Labor to impose custom levies on imported steel (anti-dumping) in order to
protect local steel industry, which may collapse. At the first stage the
Ministry checked and after finding that import of iron increased significantly
(market share of imported iron rose to 25%), decided to lay a temporary levy.
Local steel and iron importers, as well as the Contractors Association,
submitted their objection to the Ministry and also appealed through the Courts
to avoid such import tax. They claimed that there has been no rise in demand
for iron in 2008. In August 2009 the Ministry formed a compromise, according to
which import of iron to Israel up to 270,000 tons (average import in 2007-2008)
will not be levied and over that limit a US$84 per ton will be imposed.
As the price metal started to rise, both Groups requested a levy on scrap
iron export due to extensive export (to Turkey) claiming it causes a shortage
in the local market, which elevates prices, hence the lack of economic
viability for local production. On the 24.07.2011 the Minister of Trade agreed
on a levy of US$ 35 per exported ton (for one year).
According
to data by of the Metal, Electrical and Infrastructure Industries Association,
representing the local Metal and Electricity Industries, which includes large
scale export-oriented industries on one hand and family-owned plants which sell
to the local market: 2010 sales (local and export) by the said industries amounted
to NIS 70 billion, comprising 25% of Israel's industrial output. Results are
similar to 2008 scales, after some 20% drop in 2009 due to the significant
slow-down in the local economy, affected by the global financial and economic crisis. Sales
for export reached US$ 10 billion in 2010.
Some 90,000
employees serve the said industries (26% of Israel's industrial workforce).
Export of products
of Basic Metals by the local industry rose in 2011 by 12.6% from 2010, reaching
US$2,678.7 million, continuing the growth trend in 2010 when it rose by 39.2%
from 2009. Export of Machinery & Equipment also marked 8.3% increase in
2011 (in value of US$2,975.5 million), after 8% rise in 2010.
According
to the Central Bureau of Statistics (CBS), import of metals raw materials
to the local industries in 2010 and 2011 showed an increasing trend, after a
contraction in
Despite the current general weakness in
local markets (negatively affected by the global economy), 2011 ended with
significantly improved economic indicators compared to 2010 in terms of gross
domestic investment in machinery and other equipment for the manufacturing
industry (excl. ships & aircrafts).
Central Bureau of Statistics data reveals that investments -both from import
and domestic production- of machinery & equipment rose by over 35% from 2010
(in 2010 it rose by some 10% from 2009, after it fell by 19% from 2008). Total
gross domestic investment in machinery & equipment from import alone, rose
in 2011 by 52% from 2010 (12% rise in 2010 after falling in 2009 by almost
23%).
Notwithstanding
the lack of updated data from subject's officials, considered good for trade
engagements.
Note: Since the beginning of 2012 Israel Post
started using a new area code method of 7 digits (the old method of 5 digits
will still be valid till end of 2012).
FOREIGN EXCHANGE RATES
|
Currency |
Unit
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Indian Rupees |
|
US Dollar |
1 |
Rs.53.23 |
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1 |
Rs.86.14 |
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Euro |
1 |
Rs.69.98 |
INFORMATION DETAILS
|
Report Prepared
by : |
PRL |
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 SCs 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.