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Report Date : |
26.02.2013 |
IDENTIFICATION DETAILS
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Name : |
LORENZI DIAMONDS LTD. |
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Registered Office : |
1 Jabotinsky Street, Diamond Exchange, Maccabi Bldg., Ramat Gan 5252001 |
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Country : |
Israel |
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Year of Establishment : |
1982 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Traders, importers,
processors, exporters and marketers of diamonds for jewelries |
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No. of Employees : |
05 employees |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Unknown |
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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) |
|
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. 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 |
* Note: In your original enquiry you wrote in the Ref. No.
951192012, however in your "Pending Orders List" reminder you wrote
Ref. 193727 (which we assume is the correct ref. no.)
LORENZI DIAMONDS LTD.
Telephone 972 3 752 83 10
Fax 972 3 751 89 40
1 Jabotinsky Street
Diamond Exchange, Maccabi Bldg.
RAMAT GAN 5252001 ISRAEL
Originally established in several partnerships forms in 1982.
Converted into a private limited company and registered as such as per file No. 51-138571-8 on the 11.05.1989.
Authorized share capital NIS 2,640.00, divided into -
2,640 ordinary
shares of NIS 1.00 each,
of which 100 shares amounting to NIS 100.00 were issued.
1. Joseph (Yosi) Lorenzi,
2. Aharon Lorenzi.
Joseph (Yosi) Lorenzi.
Traders,
importers, processors, exporters and marketers of diamonds for jewelries.
30%-40% of sales
are for export.
Operating from rented
office premises, on an area of 70 sq. meters, in 1 Jabotinsky Street, Maccabi
Building, Diamond Exchange, and from another rented office, on an area of 180
sq. meters, in 3 Hayetzira Street, both in Ramat Gan.
Having 5
employees.
Financial data not
forthcoming.
There is 1
floating charge for an unlimited amount registered on the company's assets (all
assets), in favor of The First International Bank Ltd. Charge was placed in
1998.
Sales figures not
forthcoming.
LORENZI PROPERTIES
LTD., sister company, properties holdings.
The First
International Bank Ltd., Diamond Exchange Branch (No. 026), Ramat Gan
In the late 1990s,
subject encountered financial difficulties due to the crisis in South East
Asia, mainly Japan, which brought to collapse in September 1998. Subject had
creditors in Israel and overseas. Debts of subject and sister company LORENZI
PROPERTIES LTD. amount to over US$ 80 million. Later subject reached a
settlement with its 3 local creditors' bankers (as well as suppliers and
diamond dealers), in which the redemption of the debts was spread to several
years. According to the settlement, a trustee was appointed to manage subject
for 4 years (subject continued to operate, and 2% of its turnover were deducted
to the trustee's fund during the settlement period). There were other legal
matters handled in Courts allied to the collapse, which due to its magnitude,
had effects on other diamond dealers. Another legal dispute erupted with
connection to LORENZI Group subsidiary in Japan, between Joseph Lorenzi and the
Israeli manager of the Japanese subsidiary.
In June 2005 Mr.
Lorenzi was quoted to say he has already paid back over 50% of his debts – US$
47.6 million out of US$ 81.6 million and, reportedly by 2006, 90% of the debt
was redeemed.
Since the above
entanglement, nothing unfavorable learned.
Subject's owner and General Manager, Mr. Yosi Lorenzi, refused to disclose financial data.
Until its financial
collapse in the late 10990s, subject was considered a leading Israeli diamond
company. Its 1998 sales reached to around US$ 400 million. Mr. Lorenzi was a
well-known diamond dealer.
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).
In the 1st
half of 2012, export (net) of cut diamonds was US$ 3,264 million, down 18.9%
from the 1st half of 2011, and rough diamonds export (net) reached
US$ 1,516 million, a 33% decrease. Import of rough diamonds (net) in the 1st
half of 2012 were down 19.3% to US$ 1,993 million compared with the parallel
period in 2011, while import of polished diamonds (net) saw 21.7% fall
reaching US$ 2,201 million.
In terms of target
export (polished diamonds) countries, in 2011 the USA continued to be the main
destination, with 47% of total export (39% in 2011). This comes after in early
2010, for the first time Far East markets became Israel’s diamond industry’s
main target (traditionally sales to the USA comprised some 60%-65% of total
export). Hong Kong is the 2nd largest target country, comprising 29%
of sales in 2011 (26% in 2010). Other main target countries included Belgium
(7%), Switzerland (6%), UK (2%) and the rest of the World (9%).
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.
The collapse affair
is assumed to be resolved and the fact subject recovered and has been operating
since, speaks for itself. Though it is likely that subject is suitable for
trade relations, considering the refusal to disclose financial data, we do not
know the current financial standing, and prefer to remain cautious and
recommend dealings on secured basis.
Note: The
telephone no. you provided (972 3 5767571) is disconnected, no longer belongs
to subject.
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
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.04 |
|
UK Pound |
1 |
Rs.81.80 |
|
Euro |
1 |
Rs.71.41 |
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 |
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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 |
|
<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.