|
Report Date : |
05.10.2012 |
IDENTIFICATION DETAILS
|
Name : |
|
|
|
|
|
Registered Office : |
|
|
|
|
|
Country : |
|
|
|
|
|
Financials (as on) : |
30.06.2012 |
|
|
|
|
Date of Incorporation : |
01.01.1991. |
|
|
|
|
Legal Form : |
Private Limited Company |
|
|
|
|
Line of Business : |
Manufacturers, importers, marketers and retailers of furniture,
lighting elements, home textile and household goods |
|
|
|
|
No. of Employees : |
698 (Beitili
Group) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Status : |
Satisfactory |
|
Payment Behaviour : |
No complaints |
|
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 – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
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 |
CARMEL HOLDINGS
(I.L) LTD.
(Also known as: BETILI)
Telephone 972 3 953 64 00
Fax 972 3 961 17 89
2 Haetzel Street
New Industrial
Zone
RISHON LE-ZION 7570604 ISRAEL
Originally established as a private limited company, incorporated as per
No. 51-153506-4 on the 01.01.1991.
Company took over
the business activities of HAIM EITANI CARMEL CARPET, established in 1960.
In February 1994,
subject purchased the assets of CARMEL CARPETS.
Converted into a
public limited company and registered as such as per file No. 52-004319-1 on
the 19.05.1997. In June 1997 published a prospectus offering shares to the
public in the Tel Aviv Stock Exchange.
Originally
registered under the name BETILI LTD., which changed to the present name on the
01.07.2004.
Authorized share
capital NIS 100,000,000.00, divided into -
100,000,000 ordinary shares
of NIS 1.00 each,
of which 13,103,043
shares amounting to NIS 13,103,043.00 were issued.
1. Aviv Eitani, 22.3%,
2. Ofer Eitani, 21.9%,
3. Haim Eitani, 18.8%,
4. NORSTAR HOLDINGS INC., 14.8%,
controlled (29.25%) by Haim Katzman,
5. V.S.D INVESTMENT LTD., 11.8%,
owned by the Eitani family,
6. ZIGLER INVESTMENTS LTD.,
1.2%, a fully owned subsidiary,
7. Shares are also traded on the
Tel Aviv Stock Exchange (traded in the preservation list).
In June 2005, Haim
Katzman acquired 10% in subject, for a sum of NIS 6 million.
1. Haim Eitani, Chairman,
2. Ofer Eitani, General Manager,
3. Aviv Eitani,
4. Shlomo Perets,
5. Avi Elkind,
6. Ms. Yael Shidlovski,
Subject, directly
and through its subsidiaries, operates as manufacturers, importers, marketers
and retailers of furniture, lighting elements, home textile and household
goods. Also manufacturers, marketers and exporters carpets, rugs and parquets.
Sales of floor
coverings carried out via 17 “Carmel Carpets &
parquets” chain store (4 operated directly and rest via concessionaires),
as well as via "Betili" chain (in 15 branches), a store named
"Floor" in Tel Aviv Port, and via 12 more inside HOME CENTER chain,
and several inside SHUFERSAL marketing chain.
Import and sales
of furniture and allied goods (including floor coverings) are via 50% owned E.
F. DESIGN LP retail chains: "Betili" (18 branches), "I.D.
Design" (3 branches) and "Rich & Taylor" (4 branches), “My
Home Page” (8 stores and via the Internet, focusing on young audience). In
addition, subject also runs a store under the name “Hazorea Furniture Center”.
Marketing is also via other channels, including to hotels, contractors,
workers' unions, etc.
Among local
suppliers: SHAUL SCHECHTER UPHOLSTERY FABRICS, NIRLAT.
Operating from
main offices in rented premises, on an area of 1,200 sq. meters in 2, Haetzel
Street, New Industrial Zone, Rishon Le-Zion, and from:
1. A plant,
on an area of 8,500 sq. meters, in Shaked Industrial Zone, owned by the
shareholders,
2. Plants,
warehouses and logistic center in Industrial Zone, Barkan, on total area of
47,450 sq. meters, rented,
3. Main “Carmel Carpets” store, on an owned area of 300 sq. meters, in Bnei Brak, owned by the
shareholders,
4. Retail
stores countrywide, all rented.
Having 698
employees serving the whole BEITILI Group as of March 2012, of which 261
employees in the in the floor covering branches, the rest in the furniture
sector.
In the financial statements for the 2nd
& 3rd quarters of 2008 subject had a “going concern” warning in
its accountants financial statements, due to the events described below.
In May 2006 subject acquired 50.1% of the
veteran and large carpet plant ATLAS in Turkey and formed GAYA INTERNATIONAL.
Subject signed the deal with the Turkish family Cetinkaya, owners of ATLAS that
will market the new plant products. During 2007 the venture encountered heavy
financial difficulties, due to market conditions and an internal fraud (reached
accumulated deficit of over NIS 20 million, and irregularities committed by the
Turkish senior managers in volume of NIS 8.5 million). GAYA shut down its
offices and manufacturing lines by November 2007, and dismissed all workers.
In April 2009 the Court in Turkey declared as GAYA insolvent and
currently GAYA is under receivership.
In December 2005, subject completed a NIS 50 million capital raise in a
public offering of convertible bonds.
Following subject’s financial distress subject announced it had no
available means to pay its bonds holders. In December 2008 subject reached a
settlement agreement with its bonds (series A) holders, mostly institutional
holders, to redeem the debts paying a discount of just more than a half of the
actual value (some NIS 56 million), converting some of the bonds into shares
and postponement of payments. According to the arrangement, controlling
shareholders fuel NIS 8 million (Eitani family and GAZIT) and subject was given
NIS 5 million bank loan. In order to meet its obligations, subject is committed
to put owned real estate properties as collateral. In addition, among other
commitments, in case subject will see money from the investment in Turkey, it
will go for settling the debts. The settlement agreement was approved by Court
on 12.03.2009 and came into force. In practice, the settlement allowed subject
to continue normal operation. Subject’s equity as of 31.12.08 was NIS 1.1
million, after on 31.12.06 it was NIS 40 million. After the settlement, equity
climbed back to current levels and financial condition improved (also as
business environment improved).
In April 2009 subject made a partial bonds redemption of NIS 14 million
and further redemption on 31.12.2009. Subject also made self purchase of bonds.
Consolidated B/S
shows:
NIS
(thousands)
31.12.2011 30.06.2012
ASSETS
Current assets
Cash
and cash equivalents 7,527 6,249
Customers 52,764 47,858
Other debtors 10,832 11,427
Other current assets 581 814
Stock 66,296 69,110
138,000 135,458
Non-current assets
Fixed assets (net) 37,152 35,513
Other non-current assets 13,595 14,943
50,747 50,456
188,747 185,914
======= =======
LIABILITIES
Current liabilities 103,010 98,128
Non-current
liabilities 34,191 33,778
Equity 51,546 54,008
188,747 185,914
======= =======
Current market
value US$ 7.2 million.
There are 13
charges for unlimited amounts registered on the company's assets, in favor of
Bank Leumi Le’Israel Ltd., Bank Hapoalim Ltd., Mercantile Discount Bank Ltd and
companies (last charge placed December 2010).
REVENUES
Consolidated Statement of Income:
NIS
(thousands)
Year
ended on the 31.12
2009 2010 2011
Revenues 205,133 223,701 243,602
Gross profit 87,034 94,388 106,862
Operating income* 31,729 12,203 11,228
Income before
income taxes 29,341 7,912 8,294
Profit from
continuing operation 28,426 5,541 7,942
Profit from ceased
operation 7,370 - -
Net profit 35,796 5,541 7,942
======= ======= =======
* 2009 operating
profit includes “other income” of NIS 25,594,000, deriving from a capital gain
following the agreement signed with its bonds holders.
Consolidated sales
for the first 6 months of 2012 were NIS 116,938,000 (2.6% decrease compared to the parallel period in 2011), making a
gross profit of
NIS
48,113,000, an operating income of NIS 2,969,000, and a net profit of
NIS
2,462,000.
OTHER COMPANIES
CAESAREA CARPETS
(97) LTD., manufacturers, importers, marketers and
exporters of woven and wall-to-wall carpets, concentrates Group's institutional sales activities in the floor covering field to retail chains, owns
SHAKED CARPETS LTD., 50%, floor covering importers and marketers, mainly
parquets.
CARMEL FLOOR
DESIGN LTD., Group's retail activities in the floor covering field to retail
chains,
IKOO DESIGNS LTD.,
100%, furniture manufacturing,
ZIEGLER
INVESTMENTS LTD., 100%, investments and real estate,
E.F. DESIGN LP
(EFD), 50%, operates the "Betili" (19 branches), "I.D.
Design" (3 branches) and "Rich & Taylor" (4 branches), “My
Home Page” (8 stores and via the Internet, focusing on young audience), as well
as “Hazorea Furniture Center” store. Also importers and marketers of furniture,
household products, lighting elements, home textile goods, etc.
E.F. HOME DESIGNS
LTD., 50%, management company for the above chains,
Eitani family also
owns, among other companies:
HAIM EITANI
HOLDINGS LTD.
CLASSIGAN LTD.,
33%, garden furniture manufacturers and marketers.
NATZRANIT HOLDINGS LTD., fully owned by Aviv
Eitani, owns EAGLE FORKLIFTS AND LOGISTICS LTD., 100%, importers and marketers
of forklifts. Also have holdings in real estate ventures.
NORSTAR HOLDINGS
INC., a foreign publicly traded company, current market
value US$ 537.4 million, part of GAZIT GLOBE Group,
operating in the real estate investment fields, in acquisition, development and
management of yielding properties in Israel, North America, Northern Europe.
Holds 56.3% in GAZIT GLOBE LTD., publicly traded on TASE, current market value
US$ 1,886.7 million.
Bank Leumi Le’Israel Ltd., Rishon Le-Zion Business Branch (No. 671),
Rishon Le-Zion, account No. 35000/16.
A check with the Central Banks' database did
not reveal anything detrimental on subject’s a/m account.
Mainly due to the Turkish subsidiary GAYA affair subject suffered a significant
blow to its business, mainly financial (as mentioned above in MEANS). Since the
bonds holders settlement agreement in March 2009 condition improved
significantly.
Due to not meeting
the Stock Exchange tradability rules, in February 2009 subject’s shares moved
to be traded on the low-tradability list and in February 2010 moved to the
preservation list. In January 2011 shares were re-transferred to the main list
(yet in the low-tradability list), and in January 2012 shares were
re-transferred to the preservation list.
Apart from the
above, nothing unfavorable learnt.
Subject is a
leading company in their fields. Both “Betili” and “Carmel Carpets” chains are
leading and well-recognized brands in their fields. Subject estimates its
market in the floor covering branch share at 20%."Carmel Carpets"
logo is the most recognized carpets brand in the local market.
As part of a restructure in the subject’s Group, on the 01.01.2011 CARMEL FLOOR
DESIGN assumed all of the sales of floor covering to the domestic market, from
subject and CAESAREA CARPETS (97) LTD. (which is in charge of the
Group's floor covering sales for the institutional market).
NORSTAR HOLDINGS INC. (formerly GAZIT INC.), is a public foreign company, whose shares are traded on the Tel Aviv Stock
Exchange, part of the leading GAZIT GLOBE Group, operates in the
real estate investment fields.
GAZIT GLOBE is a
well-known leading real estate investment company traded in the Tel Aviv Stock
Exchange as part of the Tel Aviv 25 Index (symbol: GLOB). The Group acquires,
develops and administers profitable assets in North America, Europe and Israel,
focusing primarily on shopping centers anchored by supermarkets in developing
urban areas.
In 2001 CARMEL CARPETS acquired SHOMRON CARPETS, for a sum of US$
800,000 after SHOMRON CARPETS stumbled over financial difficulties.
In 2003 Eitani family, founders of "Betili" Chain, joined
forces with the Fishman Group, founders of "IDesign" Chain,
establishing a new partnership, making it the largest furniture and household
goods chain in Israel.
In October 2006,
CARMEL CARPETS, opened 12 points of sale ("store within store") in
FISHMAN Group's HOME CENTER branches, local largest DIY chain spread
countrywide, replacing a previous franchise.
Subject's acquired in
In February 2008, it was reported that 50%
subsidiary EFD is establishing a new sub chain that specializes in leather
furniture called "Leatherland". EFD plans to open 4 stores within the
next 2 years, with initial investment of NIS 10 million.
In July 2008, subject signed an agreement
with SHUFERSAL, local largest supermarket chain, to act as a retailer for
subject’s goods, mainly rugs.
In December 2008, it was reported that subject and subsidiary CARMEL,
received the exclusivity for German parquet manufacturer EGGER for marketing it
in Israel. Subject is also investing in penetration the local wallpaper niche.
In February 2009, BEITILI Group opened 3 new retail stores as part of a
new furniture chain targeted at the young audience and “low budget”, called “My
Home Page”. Initial investment was NIS 1 million.
In May 2009 it was reported that CARMEL CARPETS entered the artificial
grass niche with a new retail store in Ilanot Junction, with an investment of
NIS 500,000. The artificial grass market is estimated at NIS 10 million per
year.
In February 2012
it was reported that CARMEL CARPETS closed export orders in value of NIS 40
million in the Domotex Exhibition in Germany.
According to the Central Bureau of
Statistics (CBS) data, private consumption expenditure by local households in
furniture in 2011 fell by 3.6% from 2010, after in 2010 it rose by 7.3% from
2009.
According to Central Bureau of Statistics (CBS) data, import
of Furniture and Domestic Electrical Equipment grew in 2011 by 16.1% from 2010,
summing up to NIS 8,975 million. This is after 9.4% rise in 2010 from 2009
(when it withdrew by 2.7% from 2008 due to the slow-down in the local market).
However, it should
be noted that based on CBS data in 2011 2nd half the local market
has entered slow-down mainly due to macro economic reasons (connected with the
global economic impact) and indications are that the market will continue
facing slow-down in coming period.
Import of furniture (excluding plastic
furniture) in 2010 totaled US$ 227 million, 17.4% increase from 2009, of which
25% was from China, 19% from Italy.
Export of furniture (excl. plastic
furniture) summed up to US$ 18 million, 21.1% rise from 2009.
Local furniture and
allied accessories is valued at NIS 9 billion per annum (2012).
According to a
survey in 2011, customers prefer mostly carpenters and small shops (65%), and
large retail chains (35%, over 8% of which by DIY chain IKEA).
The local furniture
branch is
considered to be in relatively high risk branch.
According to a survey
published in January 2012 by credit analysis firm for 2011, it turns that Wood
& Furniture Manufacturing and Wholesale branch worst in the credit days
outstanding in the various industrial branches (some 124 days credit days). The
average credit days outstanding in practice (meaning credit days agreed plus
unplanned delay) for Israeli suppliers in the first half of 2011 reached 96
days, making it well higher than average credit days outstanding in the
developed world (around 50 days).
The local floor covers market (carpets, rugs, wall-to-wall carpets,
parquets floor) is estimated well over at US$ 100 million per annum.
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
|
Indian Rupees |
|
US Dollar |
1 |
Rs.51.97 |
|
|
1 |
Rs.83.67 |
|
Euro |
1 |
Rs.67.19 |
INFORMATION DETAILS
|
Report Prepared
by : |
PDT |
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.