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Report Date : |
25.10.2012 |
IDENTIFICATION DETAILS
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Name : |
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Formerly Known As : |
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Registered Office : |
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Country : |
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Financials (as on) : |
30.06.2012 |
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Date of Incorporation : |
05.11.2007 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Developers, manufacturers, marketers and exporters of land-based
systems and C4I solutions |
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No. of Employees : |
2,500 employees serving subject and its subsidiaries 12,545 employees
serving ELBIT SYSTEMS Group |
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 : |
Slow but Correct |
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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 (31.03.2012) |
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.
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Source : CIA |
ELBIT SYSTEMS LAND AND C4I LTD.
(Known in short as ESLC)
Telephone 972 9 889 80 80, 972 4 831 53 15
Fax 972 9 889 81 01
2 Hamachshev
Street
Southern
Industrial Zone
NETANYA 4250712 ISRAEL
A private limited
company, incorporated as per file No. 51-404628-3 on the 05.11.2007.
On the 17.11.2008
private limited company SNAPSHIELD LTD. merged into subject.
Originally registered
under the name ELBIT SYSTEMS LAND AND C4I – TADIRAN LTD., which changed to the
present name on the 30.01.2011.
Subject was formed
as a merger of TadComm (TADIRAN COMMUNICATIONS LTD., whose activities
originally founded in the 1960s and incorporated in 1994, now liquidated) with
ELBIT SYSTEMS Land and C4I operations in 2008 (ELBIT SYSTEMS activities
originally founded in 1937 and incorporated in 1996). ELBIT SYSTEMS acquired
TadComm in 2005.
Authorized share
capital 100,000.00, divided into -
100,000 ordinary shares of 1.00
each,
of which 1,227
shares amounting to NIS 1,227.00 were issued.
Subject is fully
owned by ELBIT SYSTEMS LTD., a public limited company, whose shares are traded
on the Tel Aviv Stock Exchange and Nasdaq Stock Exchange (Symbol: ESLT),
controlled (45.3%) by FEDERMAN ENTERPRISES LTD., owned by the Federmann Family,
chiefly by Michael Federmann.
1. Joseph
Ackerman, President and General Manager of ELBIT SYSTEMS,
2. Joseph Gaspar,
CFO of ELBIT SYSTEMS,
3. Gideon Schaffer,
4. Jacob Gadot,
5. Marco Rosenthal,
6. Zeev Gofer,
7. Itzhak Dvir, COO of ELBIT SYSTEMS,
8. David Bloch Tamin,
9. Ms. Dalia Gonen.
Bezalel (Butzi)
Machlis (Heads ELBIT Group's Land and C4I Div.)
Developers,
manufacturers, marketers and exporters of land-based systems and C4I
solutions, including armored vehicle upgrades, fire control systems, thermal
imaging and laser systems, displays, electrical turret drives, overhead remote-control
unmanned turret weapon systems. Also engaged in command, control,
communications, computers (C4I), including information and battle management
systems and software-intensive C4I programs for various applications.
Activities are
conducted by subject and its subsidiaries TELEFUNKEN, SHIRON and certain other
ELBIT Group subsidiaries.
Subject's
customers include the IDF (Israel Defense Force), the U.S. Army, the USMC and ground
forces and governmental agencies of a wide range of NATO and EU member nations
as well as those of other countries.
Operating
from rented premises, on a large area, in 2 Hamachshev Street, Southern
Industrial Zone, Netanya. Also operating from TadComm facilities, on an area of
around 20,000 sq. meters (rented), in 26 Hashoftim Street, Industrial Zone,
Holon, plants in Karmiel and in Kiryat Shmuel, and labs in Arad.
Having
some 2,500 employees serving subject and its subsidiaries.
Having 12,545 employees
serving ELBIT SYSTEMS Group.
Financial
data is included in the consolidated B/S of parent company, ELBIT SYSTEMS
LTD., which shows:
US$
(thousands)
ASSETS 31.12.2011 30.06.2012
Current assets:
Cash and cash equivalents 202,577 328,449
Short term bank deposits 21,693 20,736
Trade and unbilled receivables, net 669,524 645,342
Other receivables and prepaid expenses 180,024 144,653
Inventories, net of advances 761,269 807,683
1,835,087 1,946,863
Investments and
long-term receivables 604,743 621,296
Property, plant
and equipment, net 517,608 509,136
Goodwill &
intangible assets, net 763,072 739,346
3,720,510 3,816,641
======== ========
LIABILITIES
Current liabilities 1,597,977 1,601,926
Long-term liabilities 1,194,813 1,259,191
Shareholders’ equity 927,720 955,524
3,720,510 3,816,641
======== ========
ELBIT SYSTEMS
current market value US$ 1,570 million.
In June 2010 ELBIT raises of NIS 1.1 billion in
bonds issuance on TASE.
In March 2012 ELBIT raised NIS 831.1 million
issuing bonds on TASE.
In May 2012 ELBIT raised NIS 92.3 million issuing
bonds in a private placement to Israeli institutional investors.
There are no
charges registered on the company's assets.
REVENUES
ELBIT
SYSTEMS LTD.
Consolidated
Statement of Income
US$
(thousands)
Year
ended 31.12
2009 2010 2011
Revenues 2,832,437 2,670,133 2,817,465
Gross profit 849,483 797,870 732,014
Operating income 262,457 207,353 115,664
Profits before taxes
on income 247,330 199,361 104,004
Net profit 228,513 194,667 90,380
======== ======== ========
ELBIT
SYSTEMS LTD. consolidated
first 6 months of 2012 sales were US$ 1,367,220,000 (4% increase compared to
the parallel period in 2011), making a gross profit of US$ 385,380,000, an operating
income of
US$ 83,785,000 and a net income of US$ 71,610,000.
ELBIT SYSTEMS divides its total revenues into
"revenues by areas of operations". According to this division,
relevant (to subject) revenues are as follows (in US$ millions):
2010 2011 1st Half 2012
C4ISR Systems area: 1,019 996 479
Land Systems areas: 363 405 159
ELBIT SYSTEM
mentions in its 2012 financial statements that the leading contributors to
their revenues were the C4ISR and airborne areas of operations.
SHIRON SATELLITE
COMMUNICATIONS (1996) LTD., 100%, developers and manufacturers of broadband
satellite communications services.
TELEFUNKEN RADIO COMMUNICATIONS SYSTEMS GMBH (Telefunken RACOMS), 100%,
Germany, military and civilian communications projects in Germany and
internationally
KINETICS LTD., 100%, development and production of systems and
components for combat vehicles.
ELBIT SYSTEMS
LTD., parent company, developers, manufacturers, exporters and marketers of
military systems, including aerospace, land and naval systems, command,
control, communications, computers, intelligence, surveillance and
reconnaissance (CISR), EW suites, airborne warning systems, ELINT systems, data
links and military communications systems and equipment, etc. Other main subsidiaries
(100% owned unless otherwise stated):
ELBIT SYSTEMS ELECTRO-OPTICS ELOP LTD. (EL-OP), developers, manufacturers, exporters and marketers of
advanced electro-optics systems for the military, homeland security and
civilian markets.
ELBIT SYSTEMS - CYCLONE LTD., designers, manufacturers, assemblers,
exporters and marketers of structural aviation components and parts of the
aviation and aerospace field.
ELBIT SECURITY SYSTEMS LTD. (ELSEC, formerly ORTEK), developers,
manufacturers, marketers, operating mainly in the fields of homeland security,
electro-optic surveillance systems, E-fences, border and coastal integrated
security systems, aviation security systems, airport security systems, other
transportation security systems and strategic perimeter sites security.
OPGAL OPTRONIC INDUSTRIES LTD., 50.1%, thermal imaging systems for
commercial applications.
ELBIT SYSTEMS EW
AND SIGINT – ELISRA LTD. (formerly ELISRA ELECTRONIC SYSTEMS LTD.), developers
and manufactures of equipment and systems for air, naval and ground military
forces: Electronic warfare (EW), SIGINT (including ELINT and COMINT) systems,
Microwave components. Also owns: TADIRAN ELECTRONIC SYSTEMS LTD., offers a full
range of integrated C4I and EW solutions, IT based, for military and civilian
applications; TADIRAN SPECTRALINK LTD., supplier of advanced wireless
communications products for manned and unmanned aircraft, guided weapons and
space platforms, as well as unique Search and Rescue systems.
AZIMUTH TECHNOLOGIES LTD., navigation and fire control systems.
PEARLS OF WISDOM ADVANCED TECNOLOGIES LTD., 50%
SOLTAM SYSTEMS LTD., artillery and mortar systems.
I.T.L OPTRONICS LTD., holds 55% in FRASER-VOLPE LLC, USA.
SAYMAR LTD.
SEMI C
ELBIT SYSTEMS OF AMERICA LLC, U.S.A., serves as the base for the Group’s
activities in the US, mainly in the area of development; production and
maintenance of advanced defense products and systems. Fully owns (main
holdings): EFW INC. (FORTWORTH Operations), KOLLSMAN INC. (MERRIMACK
Operations); INTERNATIONAL ENTERPRISES INC.; INNOVATIVE CONCEPTS INC. (McLEAN
Operations); M7 AEROSPACE LP; REAL TIM LABORATORIES LLC. Also holds 50% in the
following: VISION SYSTEMS INTERNATIONAL LLC (VSI), USA, helmet mounted systems
primarily for fighter aircrafts; UAS DYNAMICS LLC.
ELBIT SYSTEMS OF KOREA LTD., Korea
HALBIT AVIONICS PRIVATE LIMITED, 26%, India
FERRANTI TECHNOLOGIES (GROUP) LIMITED, UK
UAV TACTICAL SYSTEMS LTD. (“U-TacS”), 51%, U.K
ELBIT SYSTEMS S.A. (ELBIT SYSTEME), Romania
AEL SISTEMAS S.A, 75%, Brazil, engineering, manufacturing and logistic
support activities for defense and commercial applications, owns 49% in HARPIA
SISTEMAS S.A., Brazil
ARES AEROSPACIAL E DEFENCE S.A, Brazil
ELBIT SYSTEMS OF
AUSTRALIA PTY LTD., Australia.
And many other
companies in FEDERMANN Group.
Bank Hapoalim Ltd., Central Business Branch (No. 600),
Tel Aviv.
Bank Leumi Le’Israel Ltd., Tel Aviv Central Branch (No.
800), Tel Aviv.
Nothing
unfavorable learned.
Subject’s parent company ELBIT SYSTEMS LTD. is a world
leading company in its fields. In the prestigious American “Defense News”
magazine 100 leading defense industry corporations in the world published in June
2010 it was ranked 28th
(ranked 32nd in 2009).
ELISRA is among the world’s
leading companies in the Electronic warfare field.
Michael Federmann is well-known respectful
businessman and holds several honorary titles (such as Honorary Consul of Ivory
Coast in Israel) and a key position in the local tourism and business sectors.
FEDERMANN ENTERPRISES Group control (among others) local DAN HOTELS five-star
hotel chain.
In 2005 ELBIT SYSTEMS acquired 13.7% in
TADIRAN COMMUNICATION LTD. from KOOR for US$ 62.5 million, then reached 26% and
later the year acquired further 13% in TADIRAN for US$ 59.3 million. In April
2007 reached full control of TADIRAN (tender offer for the balance of the shares
for US$ 382 million).
During 2005 ELBIT SYSTEMS acquired the other 70% of ELISRA,
experts in Electronic warfare systems, from KOOR for US$ 68.8 million. In April
2011 ELBIT completed the acquisition of the remaining 30% of ELISRA (from IAI)
for US$ 67.5 million.
In
January 2008 ELBIT Group won a US$ 40 million contract for the Dutch Army, for
supply of Battlefield Management Systems (BMS), manufactured by subject. It was
reported that already 20 armies around the world ara using such system.
In February 2009
subject purchased all of the shares of SHIRON SATELLITE COMMUNICATIONS (1996)
LTD. from the previous shareholders (headed by POLAR COMMUNICATION LTD. with 47%), for consideration of US$16 million. SHIRON
is engaged in the satellite broadband communication market.
In April 2009
subject/ ELBIT Group reached full ownership in KINETICS LTD. investing a total
of US$ 110 million in KINETICS (all 100%).
In August 2009
ELBIT Group won a contract for the Ministry of Defense of Finland for supply of
communications systems, in value of € 17 million.
In 2010, subject was awarded a contract from the Department of Defense of
Australia in the amount of US$298 million for the supply of a Battle Group and
Below Command, Control and Communications (BGC3) system.
During 2010, ELBIT Group also was awarded a number of contracts relating to
C4I systems, including a US$130 million contract to supply a Latin American
army with C4I and EW systems over the next three years.
In June 2010 subject won a contract for supply
to a Latin American Army with Command, Control, Computer & Communications
(C4I) systems and EW systems, valued at US$130 million.
In September 2009
subject invested US$ 18 million in SOLTAM SYSTEMS LTD., a subsidiary of MIKAL
GROUP LTD. in consideration of 19% in MIKAL. MIKAL Group is a veteran and among
the local leading groups in the artillery and ammunition field. Subject was
granted the option to purchase the remaining shares of MIKAL from the other
shareholders during 2011.
In October 2010
ELBIT Group won a contract for tanks upgrade in Asia in volume of US$ 56
million, a project which includes subject's contribution.
In July 2011, ELBIT SYSTEMS was awarded a long-term contract by the Ministry
of Defense, for the follow- on Digital Army Program (DAP) of Israel Defense
Force (supplying the IDF with computerized systems down to
the single soldier level, for supply and support of all hardware and software,
including command and control stations, data processing and distribution
systems), with initial US$40 million order and in total value of this phase of
the program US$300 million and the additional orders are due to be received
subsequently.
Other C4I programs being performed for the IDF include the Digital Infantry
Soldier program providing a battle management solution and full digital soldier
suit for infantry.
In April 2011,
ELBIT Group acquired ELITE AUTOMOTIVE SYSTEMS LTD. for US$8.2 million and in
June acquired C4 SECURITY LTD. for US$10.9 million.
In April 2011 350
of subject's union workers declared on a work dispute, due to ELBIT SYSTEM's
management decision for carrying streamlining measures.
In September 2011 ELBIT Group was awarded a contract by the Israeli
Ministry of Defense to supply, upgrade and provide maintenance e under the Israeli
Defense Forces' communications equipment project, valued at US$280 million, of
which approximately half is designated for the supply of new communication
systems over the next five years, and the balance over a twenty-year period.
In May 2012 subject
won a contract by the Finnish Army, to supply advanced dismounted soldier
systems (in the first phase of a Program).
In October 2012 ELBIT Group was awarded several contracts, with relation to
subject: a US$17.5 million contract by BOEING to redesign and upgrade the
Apache Helicopter mission processor with the ability to perform sophisticated
"networking" and on-board computing tasks; a contracts from a Far
Eastern country to supply the country’s Armed Forces with personal radio
systems in value of US$20 million; a contract from the Australian Defense Force
for the supply of Battle Management Systems for the Royal Australian Navy.
Being an ELBIT
SYSTEMS subsidiary, good for trade engagements and credits in volume of
hundreds thousands US$.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
|
US Dollar |
1 |
Rs.53.59 |
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UK Pound |
1 |
Rs.85.81 |
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Euro |
1 |
Rs.69.91 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
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.