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Report Date : |
06.08.2013 |
IDENTIFICATION DETAILS
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Name : |
SALANT GROUP LTD. |
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Formerly Known As : |
FABRIKANT & SALANT GROUP LTD. |
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Registered Office : |
21 Tuval Street Diamond Exchange, Yahalom Bldg. Ramat Gan 5252236 |
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Country : |
Israel |
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Date of Incorporation : |
08.05.1986 |
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Legal Form : |
Private Limited Company |
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Line Of Business : |
Importers, Traders
of Rough Diamonds, Polishers, Exporters, Marketers and International Dealers
in Diamonds. |
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No. of Employees : |
105 |
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 – March 31st, 2013
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Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
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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
SALANT GROUP
Correct Name: SALANT GROUP LTD.
Telephone 972 3 575 01 29
Fax 972 3 613 89 42
21 Tuval Street
Diamond Exchange,
Yahalom Bldg.
RAMAT GAN 5252236-ISRAEL
A private limited company,
incorporated as per file No. 51-112105-5 on the 08.05.1986, as a joint venture
between 2 veteran diamond dealers:
1. Salant family business for
diamond polishing and trade, originally founded by the late Moshe Salant in
1952.
2. ALPHA, diamond purchasing
wholesaler founded by the late Zvi Rimer (who worked jointly with U.S. diamond
company FABRIKANT).
Originally
registered under the name FABSAL DIAM
Following the
departure of the FABRIKANT Group name was changed to the present one on the
08.11.2006.
Authorized share
capital NIS 2,000.00, divided into:
1,950 ordinary shares (1,620 shares
issued),
50 deferred shares (issued), all
of NIS 1.00 each,
of which shares
amounting to NIS 1,670.00 were issued.
Subject is fully
owned by the Salant Brothers (Igal and Avner), who in October 2006 acquired all
of the FABRIKANT Group shares in subject (after the FABRIKANT Group of the USA
encountered financial difficulties).
According to the
Registrar of Companies, the Salant Bros. holdings divide to:
1. Avner Salant,
2. Igal Salant,
3. SALANT DIAM
Shares are also
registered under the name of subject itself.
1. Igal Salant, co-Chairman,
2. Avner Salant, co-Chairman.
GENERAL MANAGER
Tamir Osif.
Importers, traders of rough diamonds, polishers, exporters, marketers and international
dealers in diamonds.
Most of sales are for export.
Among suppliers: STEINMETZ Group.
Operating from
rented offices premises, in 21 Tuval Street (formerly 54 Bezalel Street),
Diamond Exchange, Yahalom Building (5th floor), Ramat Gan. Also operating
from polishing plants in USA, China, India, Thailand and South Africa.
Having 105 employees, of which 30 are in Israel.
Financial data not forthcoming, however known to be financially solid.
Subject has been a Sightholder from DCT since 1990.
There are 6 charges for unlimited amounts registered on the company’s
assets (financial assets), in favor of Israel Discount Bank Ltd. and Bank Leumi
Le'Israel Ltd.
Sales data while FABRIKANT was a partner:
2004 sales reported to be US$ 236,000,000, all for export.
2005 sales claimed to be US$ 180,000,000, almost 100% for export.
Sales data in the current form (SALANT GROUP, without FABRIKANT):
2006 sales were US$ 180,000,000, almost 100% for export almost 100% for
export, of which net exported polished diamonds were U$ 95,000,000.
2007 sales were US$ 150,000,000, almost 100% for export.
2008 sales were US$ 100,000,000, almost 100% for export.
Later sales
figures not forthcoming.
OVERSEAS DIRECT
INC., 100%, USA subsidiary.
During 2012 Salant
family sold its holdings (51%) in MASINGITA LTD., diamond dealers.
Subject's
shareholders, Salant brothers, have other holdings.
Israel Discount
Bank Ltd., Diamond Exchange Branch (No. 080), Ramat Gan.
Nothing unfavorable learned.
Subject's General Manager refused to disclose financial data.
Subject is well known, among the leading Israeli diamond companies. Salant
Brothers enjoy very good reputation.
In October 1998,
it was reported that subject won an “exceptional exporter” award for 1997.
According to the
report published by the Israel Supervisor on Diamonds in the Ministry of
Industry and Trade, subject was ranked 9th in the 2006 list of Israel's largest
polished diamonds exporters. 2005 ranking as 4th largest, was while
still partnered with FABRIKANT. It should be noted that subject refrains from
being reported in the Israel Supervisor on Diamonds top exporters list (which
is its prerogative).
In June 2006 it
was reported that subject's former shareholder, FABRIKANT Group, which was
considered as one of the world's largest diamonds and jewelries companies, is
on the verge of a collapse, mainly due to the crisis in the diamonds branch in
the world at that time.
Subject's owner
and joint General Manager, Mr. Avner Salant, was quoted to say that subject is
financially solid, with an independent cash flow in Israel, enjoying good
reputation with no debts in the local market, meeting all its obligations properly
and paying almost on everything in cash.
An affair of an
underground bank shocked the local diamond branch, after in late January 2012
Police raided the Diamond Exchange (after a long undercover operation),
arrested several individuals for investigation, caught diamonds and various
assets worth NIS millions, and blocked several bank accounts. It is suspected
that a group of people, including diamond dealers, run an illegal bank in the
Diamond Exchange compound for loans, money transfer abroad based on fictitious
transactions 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 in 2012, frozen bank accounts, a paralysis
(especially in purchase of raw diamonds) even with fear of the a collapse of
the sector, while dealers –local and foreign- face uncertainty.
In March 2012 the
Police decided to lower the profile of the investigation for a while 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). In November 2012 the Police and Tax Authorities recommended
on indictments against the 25 suspects in the affair, among them diamond
dealers, for the said suspicions and obstruction of the investigation.
Export of polished
diamonds from Israel fell by 23% in 2012 from 2011, after the sector recovered
in 2010 and mainly in 2011 from one of the worst depressions in the global
diamond sector due to the economic crisis in global markets that erupted in
2008. The sector experienced almost an entire freeze and collapse in sales of
about 70% in the peak of the crisis. While the global diamond industry experienced
major declines during 2012, Israel saw a steady improvement in its diamond
trade in the third and fourth quarters of the year, according to the Diamond
Administration at the Ministry of Industry & Trade.
The Administration
reported on a strong first 2 months of 2013 with 45% rise in diamond activity,
although 2013 1stQ shows mixed indicators (see below), but it is due
to technical reasons (high goods return
rate due to a large exhibition).
Israel’s net
polished diamond exports stood at US$5.6 billion in 2012, compared a decline of
23% from 2011. Net rough diamond exports totaled US$2.8 billion in
Net imports of
polished diamonds dropped 25% from 2011, totaling US$4.27 billion, while net
rough imports stood at US$3.8 billion, 13 % less than in 2011.
Net polished
diamond exports in 2013 1stQ witnessed 8.3% decrease comparing to
2012 1stQ (reaching US$ 1.601 billion), while export of rough diamonds saw a 2.7%
rise (summed at US$ 826 million). Net imports of polished diamonds in the 1stQ
2013 reached US$ 891 million, 10.2% decrease compared with the parallel period
in 2012, whereas import of polished diamonds fell 13% to US$ 962 million.
The United States continued
to be Israel’s major market for polished diamonds, accounting for 36% of the
market in 2012 (41% in 1stQ 2013). Hong Kong was the next largest
market with 28% of exports (35% in 1stQ 2013), with Belgium
accounting for 8%, Switzerland 5%, U.K. 5% and the rest of the world 18%.
According to the
President of the Israeli Diamonds Association, in 2010 the trade in the local
diamond sector rolled 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 data, considered good for trade engagements.
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 |
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US Dollar |
1 |
Rs.60.82 |
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1 |
Rs.92.97 |
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Euro |
1 |
Rs.80.73 |
INFORMATION DETAILS
|
Report
Prepared by : |
SDA |
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.