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Report Date : |
18.10.2012 |
IDENTIFICATION DETAILS
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Name : |
CARMEL FLOOR DESIGN LTD. |
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Registered Office : |
2 Haetzel Street New Industrial Zone Rishon Le-Zion 7570604 |
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Country : |
Israel |
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Financials (as on) : |
30.06.2012 |
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Date of Incorporation : |
24.08.2010 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturers, importers, marketers and exporters of woven and wall-to-wall carpets. |
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No. of Employees : |
261 |
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 : |
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
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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
CARMEL FLOOR DESIGN LTD.
Telephone972 3 953 64 00
Fax 972 3 961 17 89
2 Haetzel Street
New Industrial Zone
RISHON LE-ZION
7570604 ISRAEL
A private limited company, incorporated as
per file No. 51-448878-2 on the 24.08.2010.
Subject was established with view of
assuming (as of 01.01.2011, when commercial activities began) all of the retail sector activities of the Floor Covering segment in the CARMEL Group
(see more below).
Authorized share capital NIS 10,000,000.00,
divided into -
10,000,000
ordinary shares of NIS 1.00 each,
of which 1,000 shares amounting to NIS
1,000.00 were issued.
Subject is fully
owned by CARMEL HOLDINGS (I.L) LTD., a public limited liability company, whose
shares are traded on the Tel Aviv Stock Exchange (TASE), controlled by Eitani
Family (74.7%, Aviv, Ofer and Haim Eitani) and NORSTAR HOLDINGS INC. (14.8%, publicly traded on TASE), controlled by Haim Katzman.
Aviv Eitani.
Subject is part of
the Floor Covering segment in CARMEL Group (known as 'Carmel Carpets &
Parquets'), manufacturers, importers, marketers and
exporters of woven and wall-to-wall carpets.
Subject itself is in charge of the sales of floor
covering to the domestic market, activities it assumed in the beginning of 2011
from parent company CARMEL HOLDINGS and sister company
CAESAREA CARPETS.
Sister CAESAREA
CARPETS is manufacturing carpets, sold by the Group, and also in charge of
sales to the institutional sector.
Sales are via the following channels:
1. “Carmel Carpets & Parquets” chain store 17 stores (4 operated directly and rest via
concessionaires),
2. Floor covering departments inside
retail chains: HOME CENTER (12 points), BETILI (15 branches) and IDdesign (3
branches).
3. Direct sales to retail
chains, e.g. SHUFERSAL, ACE DIY
4. "Floor"
retail store in Tel Aviv Port
5. Several
marketers in the Palestinian Authority
6. Many
other wholesalers and retail stores.
Operating from
parent's CARMEL Group/ BETILI rented offices, on an area of 1,200 sq. meters
(serving the Group), in 2 Haetzel Street, New Industrial Zone, Rishon Le-Zion.
Flagship retail store of "Carmel Carpets & parquets" is in
Bnei Brak, on an area of 300 sq. meters, owned by the Group.
Having 261
employees in CARMEL Group's Floor Covering Segment (had 255 employees in end of
2010).
Having 698
employees serving the whole CARMEL/BETILI Group.
As part of organizational
change in the CARMEL Group, on 01.01.2011 parent company CARMEL HOLDINGS
transferred to subject all the retail activities, including stock and
customers' relations, for NIS 26.5 million (price was valued by an outside
evaluator).
CARMEL HOLDINGS current market value US$ 7.3
million.
Assets attributed to CARMEL HOLDINGS' Floor Covering segment as of 31.12.2011: NIS 101,295,000 (NIS 91,852,000
as of 31.12.2010).
There are 6 charges for unlimited amounts registered on the company's assets
(all assets), in favor of Mercantile Discount Bank Ltd. and Israel Discount
Bank Ltd. (last 5 charge placed in July 2011-February 2012).
Financial data is included in the consolidated financial statements of
parent company, CARMEL HOLDINGS (I.L) LTD., which 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
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LIABILITIES
Current liabilities 103,010 98,128
Non-current
liabilities 34,191 33,778
Equity 51,546 54,008
188,747 185,914
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In the financial statements of parent CARMEL HOLDINGS (I.L) LTD., revenues
by the Floor Covering segment, which is attributed to CAESAREA CARPETS (97)
LTD. and subject, were:
Note: Only since 2011 the Floor Covering segment
also includes subject.
2010 sales were NIS 119,642,000, making an operating profit of NIS
4,436,000.
55% of sales were to the domestic market (which is under subject's
responsibility since 2011) and 45% to the institutional market (CAESAREA
CARPETS responsibility).
2011 sales were NIS 126,724,000, making an operating profit of NIS
6,621,000.
Subject ended 2011 with a net profit of NIS 2,471,000.
Sales for the first half of 2012 were NIS 65,750,000 (6% rise from 2011
1stH), making an operating profit of NIS 1,790,000.
CARMEL
HOLDINGS (I.L) LTD. LTD.
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.
CARMEL HOLDINGS 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.
CARMEL HOLDINGS (I.L) LTD., directly and through its subsidiaries, operates as manufacturers,
importers, marketers and retailers of furniture, lighting elements, home
textile and household goods. 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 hotels, contractors, workers' unions, etc. Also holding:
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.
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$ 551.1 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 56.37% in GAZIT GLOBE LTD., publicly traded on TASE, current market value
US$ 1,861.6
million.
Mercantile Discount
Bank Ltd, Ramat Gan Branch (No. 663), Ramat Gan.
Nothing unfavorable learned on subject itself.
CARMEL HOLDINGS is
a leading company in its fields. Both “Betili” and “Carmel Carpets” chains are
leading and well-recognized brands in their fields. CARMEL estimates its market in the floor covering branch share at
20%."Carmel Carpets" logo is the most recognized carpets brand in the
local market.
Due to not meeting
the Stock Exchange tradability rules, in February 2009 CARMEL HOLDINGS’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.
In the financial statements for the 2nd
& 3rd quarters of 2008 parent company CARMEL HOLDINGS
accountants tagged a “going concern” notice in their financial statements
reviews, due to the events described below.
In May 2006 CARMEL HOLDINGS acquired 50.1%
of the veteran and large carpet plant ATLAS in Turkey and formed GAYA
INTERNATIONAL. CARMEL HOLDINGS 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 the intention to nominate a receiver.
In December 2005, CARMEL HOLDINGS completed a NIS 50 million capital
raise in a public offering of convertible bonds. Following their financial
distress CARMEL HOLDINGS announced they had no available means to pay its bonds
holders. By December 2008 CARMEL HOLDINGS reached a settlement agreement with
its bonds 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 CARMEL HOLDINGS was given NIS 5 million bank
loan. In order to meet its obligations, CARMEL HOLDINGS put their owned real
estate properties as collateral. In addition, in case CARMEL HOLDINGS will see
money from the investment in Turkey, it will go for settling the debts. The
settlement agreement was approved by Court in March 2009 and came into force. In
practice, the settlement allowed CARMEL HOLDINGS to continue normal operation.
As result of the settlement, equity climbed back to current levels and
financial condition improved.
In April 2009 CARMEL HOLDINGS made a partial bonds redemption of NIS 14
million and further redemption on 31.12.2009. CARMEL HOLDINGS also made self
purchase of bonds.
NORSTAR HOLDINGS is part of the leading real estate
investment GAZIT GLOBE Group, controlled by Haim Katzman and Dori Segal.
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,
CAESAREA CARPETS opened 12 points of sale ("store within store") in
HOME CENTER branches, local largest DIY chain spread countrywide, replacing a
previous franchise. This is part of the collaboration between Eitani family and
FISHMAN Group (already partners in E.F. DESIGN).
In December 2008, it was reported that CARMEL Group received the
exclusivity for German parquet manufacturer EGGER for marketing it in Israel.
CARMEL is also investing in penetration the local wallpaper niche.
Also In December 2008 it was reported that CARMEL is re-branding itself
with an investment of NIS 3 million.
In May 2009 it was
reported CARMEL entered the artificial grass niche with a new retail store in
Ilanot Janction, 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 closed orders in value of
tens NIS million during the 'Domotex' exhibition in Germany, deals with
representatives from over 20 countries.
The local floor covers market (carpets, rugs, wall-to-wall carpets, parquets
floor) is estimated well over at US$ 100 million per annum.
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
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.52.75 |
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1 |
Rs.85.07 |
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Euro |
1 |
Rs.69.04 |
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 |
-- |
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.