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Report Date : |
26.09.2012 |
IDENTIFICATION DETAILS
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Name : |
WARDINON TEXTILE LTD. |
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Registered Office : |
26 Harav Shalom
Shabazi Street Rosh Ha'ayin 4802126 |
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Country : |
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Financials (as on) : |
30.06.2012 (Parent Company) |
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Date of Incorporation : |
14.09.2000 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Importers,
marketers, wholesale distributors, and retailers of home textile and home
decoration goods (beddings, towels, blankets, etc.). |
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No. of Employees : |
283 |
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
|
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
WARDINON TEXTILE LTD.
(Also known as
VARDINON TEXTILE LTD.)
Telephone 972 73 211 16 66; 211 16 02
Fax 972 73 211 16 65; 211 17 90
26 Harav Shalom
Shabazi Street
ROSH HA'AYIN 4802126
ISRAEL
Originally
incorporated as a private limited company as per file No. 51-301078-5 on the
14.09.2000.
Subject was
established as part of the publicly traded company E. WARDINON LTD., assuming
most of the textile activities. WARDINON Group was originally founded by the
Wardinon family in 1928 and incorporated in
Following the
publication of a prospectus to the public, in December 2009 subject’s shares
were listed for trading on the Tel Aviv Stock Exchange, and subject converted
into a public limited company (keeping same registration no.).
In March 2011,
following a tender offer (forced purchase) for subject's shares, subject was
de-listed from trade and re-converted to a private limited company.
On the 29.03.2012
subject's and parent company NAAMAN PORCELAIN's board approved a merger in
which NAAMAN will assume all of subject's activities, assets, brands, etc. and
subject will turn inactive. Subject's accountant informed us that the merger is
to take place on the 01.01.2013.
Authorized share
capital NIS 40,000,000.00, divided into -
40,000,000 ordinary shares of
NIS 1.00 each,
of which
28,566,853 shares amounting to NIS 28,566,853.00 were issued.
Subject is fully
owned by NAAMAN PORCELAIN LTD., a public limited company whose shares are
traded on the Tel Aviv Stock Exchange (TASE), controlled (77%) by BEE GROUP
RETAIL LTD., fully owned by ALON HOLDINGS BLUE SQUARE - ISRAEL LTD., a public
limited company traded on TASE and New York Stock
Exchange (symbol BSI), controlled 74 % by ALON ISRAEL OIL CO. LTD.
ALON ISRAEL OIL CO. LTD. is controlled
by:
1. Attorney Shraga Biran & Family and David
(Dudi) Weissman (chiefly via BEILSOL INVESTMENTS (1987) LTD.), some 53%,
2. The Collective Acquisition Entities of Kibbutzim
in Israel, represented by DELEK HOLDINGS (ESTABLISHED BY THE KIBBUTZ
ORGANIZATIONS) LTD., some
47%.
In April
Later, in September 2008, as part of
reorganization in BEE GROUP RETAIL, subject’s shares (85%-86%) were sold from
BEE to its subsidiary NAAMAN PORCELAIN, in consideration of NIS 36.943 million
(see more below).
1. Zeev Vurembrand, General Manager of ALON HOLDINGS,
2. Shlomo Zohar, Chairman of NAAMAN PORCELAIN.
3. Ms. Limor Ganot.
Subject has no General Manager. We are informed that in practice, Raviv
Brookmayer, the General Manager of NAAMAN PORCELAIN, serves as subject's
General Manager.
Importers,
marketers, wholesale distributors, and retailers of home textile and home
decoration goods (beddings, towels, blankets, etc.).
Subject purchases
printed and dyed fabrics in Israel, designed by its own studio, which are
processed into finished goods by subcontractors sewing factories.
Subject operates a retail chain
"Vardinon Chain", with 41 retail stores, spread nationwide.
Subject has 2
divisions: one for retail sales and second to wholesalers, e.g. to local
marketing chains (including the Group’s own chains MEGA BOOL, DR. BABY, etc.),
wholesalers, workers’ unions, via catalogues.
Purchasing is both
from local suppliers and from foreign suppliers, mostly from India, China and
Turkey. Having some 50 suppliers and subcontractors.
Among local
suppliers: OFFIS TEXTILE (40.5% of raw materials and works purchasing in 2011).
Subject signed in
2010 an agreement with parent Group BEE, to receive logistics, storage and
transportation services
Operating from headquarters premises, rented, on an area of 343 sq.
meters, in 26 Harav Shalom Shabazi Street, Rosh Haayin, from warehouse premises
in Beer Yehuda Council. Also operates from retail 41 stores nationwide (rented),
on a total area of 5,421 sq. meters.
Having 283
employees (had 255 employees in end of 2010).
In March 2011
NAAMAN completed the acquisition of the remaining shares of subject for NIS 7.6
million, giving subject a value of NIS67.5 million.
Consolidated B/S
shows (last obtainable):
NIS
(thousands)
31.12.2009 31.12.2010
ASSETS
Current assets
Cash and
cash equivalents 2,978 1,428
Customers 15,273 10,345
Other
debtors 1,437 3,138
Stock 22,109 27,354
41,797 42,265
Non-current assets
Fixed assets, net 8,610 6,775
Intangible assets, net 1,052 780
Deferred taxes 1,400 1,031
11,062 8,586
52,859 50,851
======= =======
LIABILITIES
Current liabilities 25,071 20,454
Long
term liabilities 2,078 8,162
Equity 25,710 22,235
52,859 50,851
======= =======
NAAMAN PORCELAIN LTD. current market value US$
15.8 million
There are no charges registered on the company's
assets.
Financial data is
included in the consolidated B/S of parent company, NAAMAN PORCELAIN LTD.,
which shows:
NIS
(thousands)
31.12.2011 30.06.2012
ASSETS
Current assets
Cash and cash equivalents 2,730 2,691
Customers 49,516 45,893
Other debtors 7,870 20,676
Other current assets 5,920 2,982
Stock 83,851 95,082
149,887 167,324
Non-current assets
Fixed assets (net) 13,766 16,312
Intangible assets 29,477 31,584
Other non-current assets 9,723 5,485
52,966 53,381
202,853 220,705
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LIABILITIES
Current
liabilities 105,813 121,726
Non-current
liabilities 36,849 33,405
Equity 60,191 65,574
202,853 220,705
======= =======
REVENUES
Consolidated
Statement of Income
NIS
(thousands)
Year
ended 31.12
2008 2009 2010
Sales 88,564 107,733 91,983
Gross profit 51,948 61,800 53,711
Operating income 6,466 10,807 2,855
Profit before taxes on income 5,584 10,252 2,347
Net income 4,191 7,450 1,375
====== ====== ======
Sales of the Home Textile Sector in NAAMAN
PORCELAIN (subject):
2011 sales were 104,819,000, making an
operating profit of NIS 8,287,000.
Subject ended 2011 with a net profit of NIS
5,208,000.
Sales for the
first 6 months of 2012 sales were NIS 58,329,000, making an operating profit of
NIS 4,199,000.
BEE GROUP RETAIL
LTD. (formerly HAMACHSAN HAMERKAZI KFAR
HASHAASHUIM LTD.), serves (directly and via subsidiaries) as ALON
HOLDINGS Group non-food retail arm, with 239 retail chain stores (mostly
operated by franchisers) spread countrywide. The chain operates under a number
of different brand names:
1) “Naaman”, sells household
goods, including kitchenware and giftware, with 36 shops. Operating via 77%
subsidiary NAAMAN PORCELAIN LTD.
2) "Vardinon", via
subject.
3) "Sheshet", household
goods, giftware, small electrical appliances, 43 stores (all operated by
concessionaires, located mainly in city centers).
4) "Kfar Hashaashuim" ("Toy Village"), sells toys,
games, pop items, some 90 shops.
5) "Doctor Baby" (and
"Rav Kat"), sells baby products, children's clothes and toys, 19
stores (operation partly via 50% owned DOCTOR BABY LTD.).
6) "All in $1" (Hakol
Bedollar), sells various consumer goods, some 40 shops.
Also holds:
NAAMAN PORCELAIN
LTD., subject's parent company, also holds:
SHESHET HOUSHOLD
CHAIN STORES LTD., 100%,
MILBO LTD., 100%,
import services for subject and others.
DOCTOR BABY LTD.,
98.1%, owns 100% of DOCTOR BABY MARKETING & DISTRIBUTION 888 LTD.,
KFAR HASHA'ASHUIM
MARKETING LTD., 100%.
ALON HOLDINGS BLUE SQUARE - ISRAEL LTD., a holding company,
current market value US$ 124 million, holds the following subsidiaries:
MEGA RETAIL LTD.,
100%, Group's supermarket chain operation, of 211 stores under
different formats, including large discount supermarkets (“Mega”, etc.). Also
operate AM-PM supermarket chain in Tel Aviv.
EDEN BRIUT TEVA MARKET LTD. (Eden Nature Market),
51%, health & organic supermarket chain (17 branches).
BLUE SQUARE REAL
ESTATE LTD. (BSRE), 78.22%, real estate holdings (including real estate
properties where the stores' chain operate from), publicly traded on TASE,
current market value US$ 226 million,
AM-PM LTD., supermarket chain,
specializing in the metro areas.
DINERS CLUB ISRAEL
LTD., 37% (further 25% also owned by the Group), credit card services
("Diners Club"),
BEE SQUARE REAL ESTATE LOGISTIC CENTER LTD.
SQUARE REAL ESTATE RESIDENCE LTD.
SQUARE REAL ESTATE TEL AVIV MARKET LTD.
YOU LOYALTY PLAN
GP, 75%,
TECO LTD., 100%,
RADIO NON-STOP LTD., 26.4%, one of the well-known radio stations in Israel,
MEGA NOFESH YASHIR
LTD., 50%, tourism services.
ALON CELLULAR LTD.
DOR ALON HOLDINGS (2004) LTD.
DOR-ALON ENERGY IN
ISRAEL (1988) LTD., 78.4%, oil and energy operations in Israel,
publicly traded on TASE, current market value US$ 88.9 million, owns:
DOR-ALON GAS TECHNOLOGY LTD., importers, marketers and suppliers of gas
and allied products and services,
DOR ALON RETAIL SITES MANAGEMENT LTD., managing the Group's petrol stations operations and commercial
activity of 193 petrol stations and 195 convenient stores.
“ALON” ISRAEL OIL COMPANY
LTD., roof
company of the ALON HOLDING Group, also controls (main holdings, among many
others):
PIZZA HUT LLP,
100%, "Pizza Hut" restaurants concessionaires in Israel,
S.D. LOOL FOOD
(KFC), 70%, Kentucky Fried Chicken restaurants concessionaires in Israel,
DERECH ERETZ
HIGHWAYS MANAGEMENT CORP. LTD., 20%, "cross-Israel" highway operator
(Highway #6), an electronic toll highway,
ALON USA ENERGY
INC., 67%,
publicly traded on the NYSE, current market value US$
814.2 million, holding a refinery in Texas, USA, marketing petrol under
"Fina" label to 1,300 petrol stations throughout the USA and operates
over 170 Seven / Eleven branches in the USA. (Owns ALON USA PARTNERS, LP, a
spin-off of the refinery activities, in IPO process on NYSE.
ALON GAS EXPLORATION LTD., 83%, publicly traded on TASE,
current market value US$ 128.8 million, deals (via DOR GAS PARTNERSHIP) in natural
gas and oil exploration and production.
Bank Leumi
Le’Israel Ltd., Petach Tikva Business Branch (No. 707), Petach Tikva.
Israel Discount
Bank Ltd.
Bank Hapoalim
Ltd., branches data not forthcoming.
Nothing
unfavorable learned.
Subject is veteran
and a local well-known chain, among the leading in their field.
MEGA BOOL, of ALON
HOLDINGS Group, is the second largest supermarket chain
in Israel, with 211 supermarkets in different formats, second to its main
competitor SHUFERSAL.
BEE GROUP RETAIL
is one of the local largest non-food retail chains and the largest franchise
group.
In July 2006 it was reported that subject received the concession for
products carrying “Playboy” trade mark in Israel.
In October 2007, ALON GROUP via BLUE SQUARE
– ISRAEL LTD., completed deals via subsidiary BEE GROUP RETAIL for the
acquisition of 51.5% of parent company NAAMAN PORCELAIN shares from Roy Gil,
Eitan Eldar, Israel Mayo, and the Strauss family, in consideration of NIS 97
million.
In August 2008, ALON GROUP increased its
shares in BEE GROUP RETAIL by 25% (reaching 85%) from Avi Ktatz and Ronen Levy,
for NIS 35 million. ALON GROUP has an option for the reminding 15% within 5
years, for NIS 21.2 million
ALON HOLDINGS Group is a large leading concern. The National Kibbutzim Movement, one of its
owners, belongs to some 270 agricultural cooperative societies spread
nationwide.
Dudi Weissman, who
heads the Group, is among the leading
businessmen in Israel.
ALON HOLDINGS Group has been confronting major shocks in recent years, that emanate from its
wide expansion strategic moves along the last years (expanding to several
different markets – energy and fuel in Israel and the USA, real estate and
retail), for which it went through wide capital raising from the public. Due to
the global and local economic environment revenues have been falling and market
value deteriorated, despite the reorganization scheme and attempts to save
costs by merging activities. By mid 2012 the Group reached a situation where it
has debts of over NIS 2 billion to bond holders (plus hundred millions to its
bankers, reaching debts of around NIS 3 billion), which it may find difficult
to pay apart from 2016. This means that for the next couple of years the Group's
situation seems fine, but for the longer term, it depends on recovery in the
markets, as well as the revenues that should start arriving –from 2014- from
the natural gas drillings in which ALON HOLDING Group has 4% stake.
In January 2008,
as part of its expansion strategy and becoming the ALON Group platform for the
household products activities, NAAMAN PORCELAIN completed the acquisition of
subject’s shares from parent BEE GROUP RETAIL for NIS 37 million (shift
finalized September 2008). Also as part of the move, NAAMAN took over the
SHESHET HOUSHOLD CHAIN STORES (then fully owned by BEE GROUP RETAIL) in a
shares swap transaction, according to a company value of NIS 85 million.
Following the mergers, NAAMAN took steps to take advantage of the synergy
between the chains.
During the 2009
subject opened 2 new concept stores combining its home textile and household
goods of 300 sq. meters each, in central shopping centers.
In November 2011 ALON HOLDINGS published a tender offer to NAAMAN's shares held by the public (33.2%) for
NIS 31.5 million. The offer did not pull through.
In May 2012 it was reported that BEE GROUP opened a online trading site for subject and NAAMAN,
investing NIS 600,000.
According to Central Bureau
of Statistics (CBS), import of fabrics and yarns rose in 2010 by 16.6%, parallel to
the recovery in general in the local economy in 2010 (import fell in 2009 by
17.2% from 2008 due to the slow-down in economy). The trend continued in 2011, though in a much lower pace: import rose 2.1%
comparing to 2010 to US$ 698.6 million. That reflects the current market
conditions which point on a stagnation in
general in the local economy since mid 2011, after a stronger first half of
2011.
Chinese production comprises the largest
portion of imported textile goods followed by France, Italy, Hong Kong and
Turkey. The increase in imports emanates from the exposure to foreign markets
policy by the State.
From CBS data,
import of Household Utensils in 2011 rose by 7.3% from 2010, summing up to US$
589.4 million. This comes after in 2010 import rose by 15.8% from 2009 (2009
level was similar to 2008).
The local
household products market is considered highly competitive after reaching
market saturation. It includes household textile, tableware and kitchenware and
utensils, bath accessories and ornaments &decorative items, ceramic and
glass ware, etc. According to estimations, the local household products market
volume reaches NIS 2.5 – 3 billons annually (of which circa NIS 1 billion for
“home textile”), and includes retail, wholesale, institutional markets (Retail
chains capture 30% of the market share, specialization stores 20%, while the
institutional and workers unions sector has 50% share).
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.53.53 |
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|
1 |
Rs.86.82 |
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Euro |
1 |
Rs.69.03 |
INFORMATION DETAILS
|
Report
Prepared by : |
PRL |
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.