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Report Date : |
25.04.2013 |
IDENTIFICATION DETAILS
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Name : |
LEO SCHACHTER DIAMONDS LTD. |
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Formerly Known As : |
LEO SCHACHTER LTD |
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Registered Office : |
54 Bezalel Street, Diamond Exchange, Yahalom Building, Ramat Gan
5252138 |
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Country : |
Israel |
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Date of Incorporation : |
13.07.1981 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Diamond cutters, polishers, traders, importers, marketers and
exporters |
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No. of Employees : |
Known to have over 1,500 employees serving LEO SHACHTER Group worldwide,
of which over 100 employees in Israel |
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 (31.03.2012) |
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 |
LEO SCHACHTER DIAM
Telephone 972 3 576 62 22
Fax 972 3 613 24 89
54 Bezalel Street
Diamond Exchange, Yahalom Building
RAMAT GAN-5252138 ISRAEL
A private limited company, incorporated as per file No. 51-089213-6 on the 13.07.1981, as an amalgamation of the diamond business activities of Late Leo Schachter founded in the USA in 1952 and those of David Namdar in Italy.
It was originally registered under the name SCHACHTER & NAMDAR POLISHING WORKS LTD., which changed to LEO SCHACHTER LTD. on the 30.08.2005 and finally changed to the present name on the 24.07.2006.
During 2004 subject's
shareholders decided to split their activities, and part of the activities were
transferred to a newly established subsidiary MOSHE NAMDAR & CO. LTD.,
which later in 2007 separated from subject's Group altogether.
Authorized share
capital NIS 1,000.00, divided into –
1,000,000 ordinary shares of NIS
0.001 each,
fully issued.
1. LEO SHACHTER & CO. INC.,
of the USA, 49.5%, owned by the heirs of Leo Schachter, the Tenenbaum and
Greenberg families,
2. FANCY DIAM
3. Lenard Kramer, 5.5%,
4. Moshe Namdar, 3.83%.
1. Eliot Tenenbaum, President & Co-General
Manager,
2. David Greenberg, Co-General Manager,
3. Dov Tenenbaum,
Diamond cutters, polishers,
traders, importers, marketers and exporters.
Almost all sales
are for export.
Among local
clients: B. BRIZA COLORS, MULTI-NATIONAL DIAMONDS, R.E.S. DIAMONDS, AVNER
EIZENSTEIN DIAMONDS.
Among local
diamond suppliers: OFER MIZRAHI DIAMONDS
Operating from
owned premises, in Yahalom Building, Diamond Exchange, 22nd Floor,
in 54 Bezalel Street (also referred to as 21 Tuval Street), Ramat Gan.
Also operating from factories and offices in 11 countries around the world.
Exact number of employees unavailable. Known to have over 1,500 employees
serving LEO SHACHTER Group worldwide, of which over 100 employees in
Israel.
Financial data not
forthcoming, but known to be financially solid.
Subject is a Diamond Trading Company (DCT) Sightholder from DE BEERS for many years. According to reports from February 2004,
they are the largest receiver from a DE BEERS Sight in volume of US$ 150-200
million per year.
There are 5 charges for unlimited amounts
registered on the company's assets, in favor of Bank Leumi Le’Israel Ltd. and
Israel Discount Bank Ltd. (last 4 charges placed January-April 2000).
According to the data published by the
Israel Supervisor on Diamonds in the Ministry of Industry & Trade, export of
polished diamonds by subject (actual overall sales presumed to be higher, as
there are local sales of polished diamonds and may have sales of rough diamonds
as well), were as follows:
2005 sales for export (net) were US$ 418,000,000.
2006 sales for export
(net) were US$ 460,000,000.
2007 sales for
export (net) were US$ 446,000,000.
2008 sales for
export (net) were US$ 352,000,000.
2009 sales for
export (net) were US$ 215,000,000.
2010 sales for
export (net) were US$ 359,000,000.
2011 sales for
export (net) were US$ 403,000,000.
LEO SCHACHTER DIAM
SHACHTER AND
NAMDAR HOLDINGS LTD., a holding company.
E.M.A. DIAM
KAMA-SCHACHTER,
Mumbai, India.
S.N.W LTD.
And other foreign
companies/ subsidiaries.
Subject’s
shareholders also hold and involved in many other companies.
Israel Discount Bank Ltd., Diamond Exchange Branch (No. 080), Ramat Gan.
Nothing
unfavorable learned.
Officials refused to disclose financial and other details, as a matter of policy.
According to the report published by the Israel Supervisor
on Diamonds in the Ministry of Industry and Trade, subject was ranked 1st
in the 2011 list of Israel's largest polished diamonds exporters for the first
time. In previous years (2005 till 2010) subject was ranked 2nd to
LLD DIAM
Subject enjoys excellent reputation in Israel and world wide.
In 1995 it was reported that subject’s shareholders acquired 2 floors (21st and 22nd floors- total of 2,300 sq. meters) in the Yahalom Building, in consideration of US$ 10 million. Part of the area was rented, the rest used by subject.
In July 2003, it was reported that subject will own 49% in a new diamond processing plant in Canada.
In February 2004, it was reported that subject will
establish a partnership with WILLIAM GOLDBERG DIAM
In May 2005, it was reported that the SCHACHTER & NAMDAR Group acquired a 3,000 sq. meters plot in central Tel Aviv, for a sum of US$ 15 million. The plot is designed for 18 story building, for residential and commercial purposes.
In February 2004
subject announced a structural change in the SCHACHTER & NAMDAR Group,
initially the establishment of a subsidiary MOSHE NAMDAR & CO. LTD., that,
in order to maximize potential where each party will focus on different
markets. In the beginning of 2007 the split was completed between the
activities of the Namdar Brothers, Moshe Namdar and Abraham Namdar and the LEO
ASCHACHTAR Group.
It was also reported that subject is operating to strengthen its global activities in addressing the fast emerging Chinese market, and by strengthening the "Leo" diamonds brand in the American, British and Italian markets.
In March 2007 it was reported that subject is suing NIS 10
million from local contractor David Appel, claiming he failed to return on time
a loan given to him in
It was reported in late 2008 that as part of the re-organization in subject’s Group designed to save costs in view of the global economic crisis and its sever effect on the diamond industry, subject had to dismiss several employees and closed down local sorting activities, while polishing activities have been already carried out by sub-contractors. The effects of the crisis can be seen in the plunge in subject’s sales for export.
In the beginning of 2009 subject suffered from the collapse of two main American diamond chains (subject was mentioned as one of their suppliers/ creditors) CHRISTIAN BERNARD and SHANE that went bankrupt.
As could be seen in 2010 reported sales, it appears that subject has recovered from the 2009 crisis, as most of the diamond industry has in 2010.
An affair of an
underground bank has been shocking the local diamond branch in these days,
after in late January 2012 Police raided the Diamond Exchange (after a long
undercover operation, in cooperation with the Exchange officials), arrested
several individuals for investigation and blocked several bank accounts (which
led to a chain reaction of not respecting checks of dealers). The Police
suspect that a group of people, including diamond dealers, run an illegal bank
in the Diamond Exchange compound for loans, money transfer abroad and exchange
in volume of NIS 1 billion for several years. The affair has already led to
several of reported bankruptcies of local diamond firms, a decrease of up to
70% in transactions, frozen bank accounts, a paralysis (especially in purchase
of raw diamonds) with substantial fear of the a collapse of the sector, while
dealers –local and foreign- face uncertainty.
In early March
2012 the Police announced it suspends the investigation of further suspects for
the time being. This move is a result of the big pressure from the diamond
branch (to stop the continuing damage inflicted) and the Government (who is
losing US$ hundred millions from decrease in tax collection).
The Supervisor of
Diamonds at the Ministry of Industry, Trade & Labor published the diamond's
sector import-export data for the 1st half of 2012, which reveals a
19% fall in net sale of cut diamonds, and a fear of another deep crisis in the
branch. The sector recovered in 2010 and mainly in 2011 from one of the worst
depressions in the global diamond sector due to the severe economic crisis in
global markets that erupted in September 2008. The sector experienced almost an
entire freeze and collapse in sales of about 70% in the peak of the crisis and
2009 export diamonds shrank by some 40%.
In 2011 the local
diamond sector recorded US$ 7,202 million in net sales of cut diamonds, 23.5%
higher than in 2010. This was thanks to the strong first 2 thirds of 2011,
which were stalled in the last third, reflecting the fragile global economy and
fear of another recession wave in USA and Europe. It should be noted that in
karat terms, net export of cut diamonds rose only by 4% from 2010.
Net export of
rough diamonds in 2011 also climbed almost 15%, reaching US$ 3,515 million
(fell almost 29% in karat terms).
Net import of cut
diamonds in 2011 summed up to US$ 5,682 million, representing 34.7% increase comparing
to 2010 (18% rise in karat terms), while net import of rough diamonds rose by
17.5% from 2010, totaling US$ 4,413 million (11% fall in karat terms).
The positive trend
reversed in 2012 and in the first 9 months, export (net) of cut diamonds was US$
4,262 million, down 27% from the parallel period in 2011, and rough diamonds
export (net) reached US$ 2,068 million, a 30.5% decrease. Import of rough
diamonds (net) in the first 9 months of 2012 were down 25% to US$ 2,646 million
compared with the parallel period in 2011 (53% down in karat terms), while
import of polished diamonds (net) witnessed a 26% fall reaching US$ 3,083
million.
In terms of target
export (polished diamonds) countries, in 2012 the USA was the main destination,
with 35% of total export, while Hong Kong being the 2nd largest
target country, with 31%. Traditionally, the USA has been by far the largest
export market for the local export (60%-65% of total export), though the
continuing economic crisis in the USA brought a change in the trend, where the
Far Eastern markets have been growing on America and Europe's account (in early
2010, for the first time Far East markets even became Israel’s diamond
industry’s main target).
Other main target
countries included Belgium (9%) and Switzerland (5%).
According to the
President of the Israeli Diamonds Association, in 2010 the trade in the local
diamond sector rolls annual turnover of US$ 25 billion while total debt to the
banks stands on US$ 1.5 billion, down from US$ 2.4 billion in the eve of the
crisis. The Ministry for Industry & Trade also assisted the local diamond
exporters by providing bank guarantees in total scope of NIS 1 billion.
Local diamond
sector employs some 20,000 persons.
In February 2009,
Israel was ranked as the world’s largest exporter of cut diamonds, followed by
India, Belgium and South Africa.
Notwithstanding the refusal to disclose
financial and other details, 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).
DIAMOND INDUSTRY –
INDIA
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From time immemorial, India is well known in the world as the birthplace
for diamonds. It is difficult to trace the origin of diamonds but history
says that in the remote past, diamonds were mined only in India. Diamond
production in India can be traced back to almost 8th Century B.C.
India, in fact, remained undisputed leader till 18th Century
when Brazilian fields were discovered in 1725 followed by emergence of S.
Africa, Russia and Australia.
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The achievement of the Indian diamond industry was possible only due to
combination of the manufacturing skills of the Indian workforce and the untiring
and unflagging efforts of the Indian diamantaires, supported by progressive
Government policies.
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The area of study of family owned diamond businesses derives its
importance from the huge conglomerate of family run organizations which operate
in the diamond industry since many generations.
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Some of the basic traits of family run business enterprises include
spirit of entrepreneurship, mutual trust lowers transaction costs, small,
nimble and quick to react, information as a source of advantage and philanthropy.
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Family owned diamond businesses need to improve on many fronts including
higher standard of corporate governance, long-term performance – focused
strategies, modern management and technology.
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The diamond jewellery industry in India today may be more than Rs 60000
mil and is rated amongst the fastest growing in the world. Indi ranks
third in the world in domestic diamond consumption.
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Utmost caution is to be exercised while dealing with some medium and
large diamond traders which are usually engaged in fictitious import – export,
inter-company transactions, financially assisted by banks. In the process,
several public sector banks lost several hundred million rupees. They mostly
diverted borrowed money for diamond business into real estate and capital
markets.
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Excerpts from Times of India dated 30th October 2010 is as
under –
DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT
This
could be the biggest credibility crisis the Indian diamond industry has ever
faced. Fifteen banks run the risk of losing Rs 2000 crore lent to a dozen
diamond firms in Surat. Until about two months ago, they had not repaid
these dues. Bankers believe many diamantaires borrowed money during the
economic downturn two years ago and diverted funds to businesses like real estate
and capital markets. Many of themselves made money from these businesses but
their diamond companies have gone sick and declared insolvency.
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Most of the money borrowed from the banks in the name of their diamond
business has been diverted in real estate and the share market. The banks are
not in a position to seize their properties because in many cases, these were
purchased in the name of their relatives and friends.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
|
US Dollar |
1 |
Rs.54.30 |
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UK Pound |
1 |
Rs.82.88 |
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Euro |
1 |
Rs.70.80 |
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 |
|
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.