|
Report Date : |
27.06.2013 |
IDENTIFICATION DETAILS
|
Name : |
ALLIANCE TIRE COMPANY LTD. |
|
|
|
|
Formerly Known As : |
ALLIANCE TIRE COMPANY (1992) LTD. |
|
|
|
|
Registered Office : |
P.O. Box 48 (3810001) 1 Friedlander Street Industrial Zone Hadera 3850001 |
|
|
|
|
Country : |
Israel |
|
|
|
|
Financials (as on) : |
31.03.2013 |
|
|
|
|
Date of Incorporation : |
27.05.1992 |
|
|
|
|
Legal Form : |
Private Limited Company |
|
|
|
|
Line of Business : |
Developers, manufacturers, importers, marketers and exporters of Off-Highway Tires (OHT), specializing in Agricultural, Forestry, Industrial and OTR tires. |
|
|
|
|
No. of Employees : |
739 employees
serving the ALLIANCE Group in Israel |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Status : |
Satisfactory |
|
Payment Behaviour : |
Slow but correct |
|
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 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
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
ALLIANCE TIRE
COMPANY LTD.
(Also known as ATG – ALLIANCE TIRE GROUP)
Telephone 972
4 624 06 24; 624 05 00
Fax 972
4 624 05 55
P.O. Box 48
(3810001)
1 Friedlander
Street
Industrial Zone
HADERA 3850001 ISRAEL
Originally incorporated as a private limited company, registered as per
file No. 51-168849-1 on the 27.05.1992.
Originally registered under the name C.D.K. INDUSTRIES LTD., which
changed to ALLIANCE TIRE COMPANY (1992) LTD. on 05.11.1992, which changed to
the present name on 17.02.2010.
Subject was established in view of assuming the assets continuing activities
of 2 companies (ALLIANCE TIRES & RUBBER ENTERPRISES LTD. and SHIMSHON TIRES
& RUBBER CO. LTD., both now liquidated), who had been active in the tire
industry 40 years earlier.
Converted into a public limited liability company and registered as such
as per file No. 52-003873-8 on the 18.02.1993.
On the 24.05.1993, published a prospectus offering shares to the public
on the Tel Aviv Stock Exchange (TASE).
Following the
completion of subject's acquisition by new shareholders (see below), its shares
were de-listed from trade on 08.07.2007 (yet bonds are still traded by the
public via TASE). Consequently, on 02.07.2007 subject was re-converted into a
private limited company (same latest registration number).
Authorized share
capital NIS 1,000.00, divided into -
1,000 ordinary share of NIS 1.00
each,
of which 150
shares amounting to NIS 150.00 were issued.
Subject is fully
owned by WARBURG MERGERS (2007) LTD., a wholly-owned subsidiary of ALLIANCE
TIRE GROUP B.V. (hereafter ATG), a Dutch firm controlled by:
1. WP
IX HOLDINGS, 75.2% B.V., (held by the global private equity fund
WARBURG-PINCUS,
2. COHORE
INVESTMENTS LTD., 21.3%, owned by an Indian entrepreneur, Mr. Yogesh
Mahansaria.
A/m shareholders
acquired full ownership in subject from Eliezer Fishman, former controlling
shareholder (some 60%, others held some 16%), according to a company value of
US$ 48 million. Deal was completed in June 2007.
In April 2013 ATG
shareholders signed an agreement for the sale of their holdings (all of WP's
shares and part COHORE's) in ATG to KKR & Co. L.P, in which KKR may hold up
to 90% in ATG. Deal is waiting approvals.
1.
Israel (Izea) Tchetchik, Chairman,
2.
Yogesh Mahansaria,
3.
Mahadevia Vishal Kashyap,
4.
Jacob Enoch,
5.
Raviv Zoller,
6.
Ms. Tali Yaron-Eldar.
Ozcan Demirbas.
Developers, manufacturers,
importers, marketers and exporters of Off-Highway Tires (OHT), specializing in
Agricultural, Forestry, Industrial and OTR tires. As part of its service to
large local clients, subject offers tire maintenance support.
Using brand names:
Top-Star, All-Star, Everest and Alliance.
Tires from import
comprise 46.4% of Group's sales in 2012 (45.3% in 2011, 49.2% in 2010).
Note: in mid 2012
subject sold its subsidiary ALLIANCE MARKETING ISRAEL, which served as Group's
tire import arm.
94.9% of ALLIANCE
Group sales are for export (91.5% in 2011 89% in 2010), to some 96 countries.
In 2012, 62.7% of all sales were to the U.S.A, 37.7% to Europe, and 5.1% to the
local market. Rest of sales is to other countries.
All local sales
are carried out by former subsidiary ALLIANCE MARKETING ISRAEL LTD. which will
continue to sale subject's products in Israel (subject itself only sells for
export). Among Group’s local clients: Ministry of Defense, BEZEQ THE ISRAELI
TELECOMMUNICATIONS CO. and vehicle leasing companies.
Among foreign raw
materials suppliers: LANXSSES, EXXON (both for rubber).
Tires are imported
from China, Taiwan and the U.S.A.
Operating from 3
plants, on total built area of 115,000 sq. meters, (plant and headquarters), on
a plot of 220,000 sq. meters, in 1 Friedlander Street, Industrial Zone, Hadera,
and branches in the Netherlands and USA.
Subject operated
from warehouses in USA and in Italy.
Having 739
employees serving the ALLIANCE Group in Israel (had 759 employees as of end of
2011).
Consolidated B/S
shows:
US$
(thousands)
ASSETS 31.12.2012 31.03.2013
Current assets:
Cash
and cash equivalents 16,875 26,752
Other
financial assets 1,150 3,059
Customers
49,424 65,337
Other
debtors 6,646 6,255
Other
assets 4,803 3,957
Stock 86,855 90,500
165,753 195,860
Non-current assets:
Fixed
assets (net) 62,204 59,711
Intangible
assets 15,079 14,880
Other
non-current assets 3,712 4,347
80,995 78,938
246,748 274,798
======= =======
LIABILITIES
Current liabilities 117,934 141,168
Non-current liabilities 31,055 32,304
Equity 97,759 101,326
246,748 274,798
======= =======
A/m deal for the
acquisition of some 90% of ATG was according to subjects reported value of US$
500 million.
As of 31.03.2013 accrued
orders are US$ 28.9 million.
In September 2005, it was reported that subject completed a NIS 40
million capital raise in a public placement of bonds.
In August 2010
subject issued bonds via TASE, raising NIS 135 million.
Subject reported
that in 31.12.2010 it did not meet one of its financial covenants. Subject
received a waiver from the banks on that covenant.
In 2008 US$ 9
million were invested in machinery and equipment, US$ 7.7 million in 2009 and
US$ 7.1 million in 2010.
Subject is an
"Approved Enterprise", and as such entitled to tax benefits and State
incentives.
There are 18
charges for unlimited amounts registered on the company's assets, in favor of
Israel Discount Bank Ltd., Bank Hapoalim Ltd., Bank
Leumi Le’Israel Ltd., Mizrahi Tefahot Bank Ltd. and a leasing
company (last 3 charges placed March-April 2013).
Consolidated
Statements of Income
US$
(thousands)
Year
ended December 31st
2010 2011 2012
Sales 304,817 401,442 420,590
Gross profit 53,425 81,220 88,220
Operating income (loss)
(10) 36,144 33,035
Profit (loss) before income tax
(1,089) 25,361 26,894
Net income (loss)
for the period (680) 17,378 22,410
======= ======= =======
Consolidate sales for
the first 3 months of 2013 were US$ 102,005,000 (16% decrease compared to the
parallel period in 2012), making a gross profit of US$ 22,795,000, an operating income of US$
9,472,000, and a net profit of US$ 7,293,000.
ALLIANCETIRE AMERICAS.
INC. (formerly ALLIANCE TIRE CO. (1992) U.S.A. INC), 100%, marketer of
subject's products in the U.S.A. and Canada,
ALLIANCE TIRE
EUROPE B.V., 100%, the Netherlands
ALLIANCE TIRE
AFRICA (PTY)
Subject has also
non-active subsidiaries.
Israel Discount
Bank Ltd., Main Branch (No. 070), Haifa.
Bank Hapoalim Ltd., Hadera Branch (No. 620), Hadera.
Bank Leumi Le’Israel Ltd., Netanya Business Branch (No. 717), Netanya.
Nothing unfavorable learned.
ALLIANCE Group went through rough times
during several years facing the depression in global markets in their fields
due to the global economic crisis, adversely hitting the automotive market,
which lead to the fall in orders to subject from automotive manufacturers. In June
2009 it was reported that ALLIANCE TIRE Group, as part of Group's
reorganization, ceased to manufacture conventional tires, and sold this
activity and production line to ATC TIRES PVT of India, a company controlled by
subject's shareholders. The Group took streamlining measures, mainly by massive
dismissals and re-organization process. As part of the cost-saving plan in the
end of 2008 all marketing activities of ALLIANCE TIRE MARKETING SOUTH (1998)
LTD. were merged into ALLIANCE MARKETING ISRAEL. Also subject closed its
distribution centers in Beit Shemesh and Kiryat Malachi.
Group also went
through a global re-organization process, which started after the acquisition
by the new shareholders, as well as in view of the global market conditions. As
part of the process, structural changes in the global Group were made. These
changes and the recovery trend in global markets led subject’s situation to
improve.
The reorganization
continued, and in September 2012 subject completed the sale of ALLIANCE
MARKETING ISRAEL LTD. (importers, purchasers from parent company and marketers
in Israel of pneumatic tires of various sorts) to 3rd parties for
NIS 77 million.
Subject is the
largest tire manufacturer in Israel.
There are some 80 brands of tires sold by some 35 importers in the local
fiercely competitive market, and subject estimates its market share at 20%.
Subject is ISO-9001:2000 certified.
In 2004 it was reported that subject will be included in the US
Government Authorized Suppliers list.
In July 2007 a group
of the current shareholders completed the acquisition of control in subject
from FISHMAN Group, in a form of "Reverse Triangular Merger" and
subject became a subsidiary of the Israeli company WARBURG MERGERS (2007) LTD.
As part of the transaction, WARBURG-PINCUS, a global private equity fund,
struck subject from trade in the local stock exchange. It was reported that the
new shareholders planned to offer the new merged company shares to the public
in a foreign stock exchange and receive a higher price than from the local
stock exchange (so far did not materialized, presumably to unfavorable market
conditions).
In May 2009 subject’s Board approved the
sale of old machinery and equipment for the manufacturing of private cars tires
to an affiliate in India for US$ 500,000.
In December 2009 subject's USA subsidiary
completed the purchase the "Primex" and "Galaxy" tire
brands (heavy duty tires) of the GPX company which went into Chapter 11, for
the total sum of US$ 43 million in cash plus US$ 5.3 million of liabilities.
In November 2011 an explosion in a water
tank occurred, which halted Group's manufacturing activities for a month.
Subject is covered by insurance. In December 2011 production returned to
normal.
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).
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.59.70 |
|
|
1 |
Rs.92.25 |
|
Euro |
1 |
Rs.78.38 |
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.