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Report Date : |
09.08.2013 |
IDENTIFICATION DETAILS
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Name : |
LEO SCHACHTER DIAM |
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Registered Office : |
54 Bezalel Street Diamond Exchange, Yahalom Bldg. 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 : |
100 |
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
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
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. Its major imports include crude oil, grains, raw materials, and military equipment. Cut diamonds, high-technology equipment, and pharmaceuticals are among 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. Israel's economy also has weathered the Arab Spring because strong trade ties outside the Middle East have insulated the economy from spillover effects. 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, and production from the Tama field is expected to meet all of Israel''s natural gas demand beginning mid-2013. 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
LEO SCHACHTER DIAM
Telephone 972 3 576 62 22
Fax 972 3 613 24 89
54 Bezalel Street
Diamond Exchange, Yahalom Bldg.
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.
2012 sales for
export (net) were US$ 317,000,000.
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.
Currently subject
is on a company vacation, and employees will return to work in 2 weeks' time.
We shall contact them upon their return and update you accordingly.
According to the
report published by the Israel Supervisor on Diamonds in the Ministry of
Industry and Trade, subject was ranked 1st in the 2012 and 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.
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.
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$3.8 billion, 13 % less than in 2011.
The diamond sector
has been keeping a steady trend in the first half of 2013.
Net polished
diamond exports in 2013 1st half witnessed a slight decrease (2%)
comparing to 2012 1stH, reaching US$ 3.233 billion, while export of rough
diamonds saw a 8.1% rise. Net imports of rough diamonds in the 1st
half of 2013 reached US$ 2.037 billion, 2.8% increase compared with the
parallel period in 2012, whereas import of polished diamonds fell by 5.3% to
US$ 2.084 billion.
Expectations in
the local diamond sector for 2013 2nd half is for further recovery.
The United States
continued to be Israel’s major market for polished diamonds, accounting for 44%
of the market in 2013 1st half (36% in 2012). Hong Kong is the next
largest market with 29.7% of exports (28% in 2012), with Switzerland accounting
for 7.8%, Belgium 6.7%, and Thailand with 1.1%.
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.
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, and for a
while to paralysis (especially in purchase of raw diamonds) due to uncertainty
among local and foreign dealers.
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.
In June 2013 it
was reported that the Police resumed its raids on the diamonds branch, and
although names of suspects were not released, sources say that it is also
related to the above underground bank affair. In parallel, it is also reported
that the Tax Authorities and diamonds dealers' representatives are trying to
reach an arrangement for past debts.
Notwithstanding
the lack of updated data from subject's officials, considered good for trade
engagements.
Note: Since February 2013 Israel Post has
started using a new area code method of 7 digits (the old method of 5 digits is
no longer valid).
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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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 –
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Gem & Jewellery Export Promotion Council in its
statistical data has shown the export of polished diamonds to have increase by
28 % in February 2013. Compared to $ 1.4 bn worth of polished diamond export in
February, 2012, India exported $ 1.84 billion worth of polished diamonds in
February 2013. A senior executive of GJEPC said, “Export of cut and polished
diamonds started falling month-wise after the imposition of 2 % of import duty
on the polished diamonds. But February, 2013 has given a new ray of hope to the
industry as the export of polished diamonds has actually increased by 28 %. It
means the industry is on the track of recovery and round tripping of
diamonds has stopped completely.” Demand has started coming from the US, the
UK, Japan and China. India’s polished diamond export is expected to cross $ 21
bn in 2013-14.
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The banking sector has started exercising restraint
while following prudent risk management norms when lending money to gems and
jewellery sector. This follows the implementation of Basel III accord – a
global voluntary regulatory standard on bank capital adequacy, stress testing
and market liquidity.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.11 |
|
|
1 |
Rs.94.77 |
|
Euro |
1 |
Rs.81.54 |
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 |
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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 |
|
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.