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Report Date : |
02.09.2013 |
IDENTIFICATION DETAILS
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Name : |
NIRLAT LTD. |
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Registered Office : |
Mobile Post Negev,
Nir Oz 8512200 |
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Country : |
Israel |
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Financials (as on) : |
30.06.2008 |
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Date of Incorporation : |
13.07.1980 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturers, marketers and exporters of paints, paint powders and
additives, lacquers and varnishes, insulating materials and sealants. |
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No. of Employees : |
Having some 400 employees
in NIRLAT Group, most serving subject, as of 2011/2. Current number of
employees unavailable. There are some
1,400 employees serving the INROM Group. |
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 : |
--- |
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 |
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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. 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 |
NIRLAT LTD.
Telephone 972 8 998 63 33
Fax 972 8 998 28 19
Mobile Post Negev
NIR OZ 8512200 ISRAEL
Originally established as a limited partnership, registered as per file No.
55-000510-2 on the 13.07.1980.
Converted into a private limited company and registered as such as per file
No. 51-185124-8 on the 01.09.1993.
In October 1999 NIRLAT PAINTS LTD. (formerly UNIVERCOL – HILLEL HOFFMAN
& SONS LTD.) announced it has acquired full ownership in subject from OZ
NIR and ORLITE INDUSTRIES LTD. and merge it within its activities. The 50%
acquisition from ORLITE was made for a sum of NIS 15.6 million.
The merger was approved by the Controller for Trade Restrictions in July 1999.
In January 2002, subject acquired all activities and assets of G.D. GAVISH
AGENCIES LTD., for a sum of NIS 1.4 million.
In July 2009 NIRLAT MARKETING LTD. was merged into subject.
Authorized share capital NIS 16,000,001.00, divided into –
10,500,001 ordinary
"A" shares (8,500,001 shares issued),
5,500,000 ordinary
"B" shares (issued), all of NIS 1.00 each,
of which shares amounting to NIS
14,000,001.00 were issued.
Subject is a wholly-owned subsidiary of NIRLAT
PAINTS LTD., owned by:
1. YTONG
INDUSTRIES LTD., 62.2% (via INROM INDUSTRY INVESTMENTS (H.B.) LP), a fully owned
subsidiary of INROM INDUSTRIES LTD., fully controlled by FIMI
Investment Fund, controlled by Ishay Davidi (in August 2009 Eldad Ben-Moshe
acquired 5% of INROM from FIMI),
2. OZ NIR HOLDINGS AND PROJECTS GENERAL
PARTNERSHIP, 37.8%, a general partnership controlled by KIBBUTZ NIR OZ and
KIBBUTZ NIRIM, both co-operative societies, operating communal agricultural
settlements.
1.
Oded Frenkel, Chairman and
General Manager,
2.
Haim Bergfreund, CFO of
NIRLAT PAINTS.
3. Eldad Ben-Moshe, General Manager of the INROM
Group,
4. Noam Schalke.
Manufacturers, marketers and exporters of paints, paint powders and
additives, lacquers and varnishes, insulating materials and sealants.
Some 25% of sales are for export.
Subject supplies to contractors and building companies, DIY retail chains
(including largest DIY chains ACE DIY and HOME CENTER), wholesalers and many
retailers.
Among other clients:
EPOCOL, THERMOKIR INDUSTRIES, BEER SHEVA MESH, MOR MARKETING OF BUILDING
PRODUCTS, etc.
Some 65% of raw materials purchasing are imported (mainly Western Europe),
the rest from local suppliers.
Sole local representatives and distributors for:
DOW CORNING, of Belgium, U.S.A.,
DISNEY (painted wall figures), of USA,
IMPAX, of Italy,
LAFARGE (plaster), of Ireland,
NATIONALGYPSUM CO. - multinational company.
Among local suppliers: LAGEEN, DEPOTCHEM, M. GOLD IMPORT AND
MARKETING, ALCO CHEMICALS, MYKO ENGINEERING, CANIEL PACKAGING INDUSTRIES, AKTIS
CHEMICALS, etc.
Advertising agency: GLICKMAN NETLER SAMSONOV ADVERTISING CO.
Operating from leasehold premises, on total built area of 22,000 sq. meters
(on a plot of 35,000 sq. meters), in Kibbutz Nir Oz - offices, plant and
warehouses which serve the NIRLAT Group, mainly subject.
Also operating from offices (owned by parent company), in 6 Hamelacha
Street, Industrial Zone South, Netanya, part of the premises of the NIRLAT
Group, on a plot of 5,000 sq. meters (4,000 sq. meters built).
In addition, operating from a rented 300 sq. meters branch (also showroom)
in Dan Design Center, Bnei Brak.
Having some 400 employees in NIRLAT Group, most serving subject, as of
2011/2. Current number of employees unavailable.
There are some
1,400 employees serving the INROM Group.
Financial data is included in the consolidated
B/S of parent company, NIRLAT PAINTS LTD. (last available*), which shows:
* Parent NIRLAT PAINTS published its last financial statement of the
1stH-08 as in September 2008 shares ceased to be traded publicly.
NIS
(thousands)
30.06.2008 31.12.2007
ASSETS
Current assets
Cash
and cash equivalents 3,509 1,667
Clients 132,849 125,706
Other
debtors 7,296 3,819
Stock 55,131 54,271
196,709 185,463
Non-current assets
Fixed
assets, net 48,915 46,799
Other
non-current assets 8,838 10,360
57,753 57,159
254,462 242,622
======= =======
LIABILITIES
Current liabilities 100,589 88,451
Long term liabilities 32,840 41,200
Equity 121,033 112,971
254,462 242,622
======= =======
Subject is an “Approved Enterprise” and as such enjoys tax benefits and
State incentives.
According to reports subject's 2009 advertising budget was US$ 1.7 million,
same as in 2008 and 2007.
There are 22 charges for unlimited amounts registered on the company's
assets, 3 of the charges on financial assets (charges placed between 1995-2004)
in favor of Bank Leumi Le’Israel Ltd., The First International Bank of Israel
Ltd. and Union Bank of Israel Ltd., 1 charge (placed in 1995) in favor of the
State of Israel, and remaining 19 charges (placed between 2005-2010) in favor
of a leasing company on vehicles.
In June 2012 it was reported
that NIRLAT is erecting a new plant for industrial paints with investment of
NIS 20 million, and expected to start operations by end of 2012.
In FIMI Fund’s reports for 2010, it turns that parent company INROM INDUSTRIES LTD. is valued (fair value) at a company value of US$ 169
million.
Parent NIRLAT PAINTS consolidated sales as reported while public:
2007 sales were
NIS 327,198,000, gross profit of NIS 105,703,000, operating income of NIS
28,016,000, net profit of NIS 18,082,000.
First half of 2008
sales were NIS 164,508,000, gross profit of NIS 56,216,000, operating income of
NIS 15,001,000, net profit of NIS 9,081,000.
According to reports, NIRLAT 2008 consolidated sales were NIS 350 million,
making a net profit of NIS 20 million.
NIRLAT reported in June 2013 that sales in the last year (May 2012 – May
2013) were 11% higher than the previous year. NIRLAT does not publish sales
figures, however according to the media report annual sales are NIS 400
million.
According to FIMI Fund’s reports for 2010, INROM INDUSTRIES LTD. noted an Ebitda profit of NIS 150 million, in a turnover of NIS 1,100 million.
INROM Group
consolidated sales reported to be NIS 900 - 1,000 million.
NIMNI PAINTS NORTH LTD., 100%, marketing arm to the northern region,
NADIR VEGA PROJECTS LTD., 100%, developers, manufacturers, marketers and
exporters of industrial electrostatic powder paints (powder coating).
NIRLAT PAINTS LTD., parent company, also fully owns:
UNIVERCOL PAINTS LTD., developers, manufacturers, marketers and exporters
of industrial electrostatic powder paints (powder coating) and wet solvent
paints.
LINK COLOR N.A. Inc., marketing arm in the U.S.A.,
INROM INVESTMENTS
IN INDUSTRY (H.B.) LP ("FIMI 4"), also holds:
INROM INDUSTRIES LTD., holding company, heads the Group and also holds:
CYCLE GROUP LTD., 100%,
YTONG INDUSTRIES LTD., 100%, holding company, also holds YTONG LTD., 100%,
manufacturers and marketers of concrete blocks, building material, etc.
H. ALONY ENTERPRISES LTD., 90%, fully owns ALONY MARBLE LTD., importers, manufacturers
and marketers of tiles, marble, granite, ceramics, sanitary tools, and K.E.R.
PARQUET LTD., parquet floors.
URDAN METAL & CASTING INDUSTRIES LTD., 100%, metal works,
exporters and marketers of steel elements.
CARMIT MISTER FIX
LTD., manufacturers and marketers of products and materials for the building
field.
NIRLAT PAINTS LTD., 66.5%, fully owns:
NIRLAT LTD., manufacturers, marketers and exporters of paints, paint
powders and additives, lacquers and varnishes, insulating materials and sealants,
etc.
UNIVERCOL PAINTS LTD., developers, manufacturers, marketers and exporters
of industrial electrostatic powder paints (powder coating).
ORLITE INDUSTRIES
(MILLENIUM 2000) LTD., designers, manufacturers and marketers of advanced
products made of lightweight composite materials.
FIMI Fund Group has many other holdings (see more CHARACTER).
OZ NIR HOLDINGS AND PROJECTS GENERAL PARTNERSHIP, a general partnership
controlled by KIBBUTZ NIR OZ and KIBBUTZ NIRIM, both co-operative societies,
operating communal agricultural settlements. Both have holding in other
enterprises (including cooperative societies for marketing agricultural
produce).
Bank Leumi Le’Israel Ltd., Netanya Business Branch (No. 717), Netanya.
In July 2013 it was reported that subject's distributor in Benelux
countries, SINOVA, filed a NIS 4.7 million lawsuit against subject to the Tel
Aviv District Court, due to recurring faults in subject's products, which
caused the plaintiffs hefty damages in front of their clients.
Subject argues in response that along the many years of selling their
products there has never been any such problems or complaints, while SINIVA is
a new company which encountered financial difficulties trying to avoid paying
subject.
Nothing unfavorable learned, apart from the above and several legal cases
which appear to be relatively minor and are part of the business routine.
Despite our strenuous efforts, we were unable to speak with subject's
officials, as they were always unavailable. In principle, subject's policy is
to refrain from providing data. We left messages, which remain unanswered. We
shall update you in case they return to us with fresh data.
Subject is certified with ISO 9001:2000 and other international standards.
Subject is the second largest paints manufacturer in Israel, after TAMBOUR,
and The paint and allied sealants market in Israel is estimated at NIS 1.2
billion per annum (marked 5%-6% rise in 2012), from which some two thirds are
for the home sector (49% acrylic, 11% lime and 28% for wood and metal) and the
balance for the industrial sector. NIRLAT's officials estimated their market
share at 33% (and 40% in the building paints segment).
INROM Group,
including YTONG, is a leading player in the local construction inputs market.
According to
"FIMI 4" Fund reports (which is the fund, out of FIMI's other funds,
investing in INROM) as of 2011 3rd quarter, INROM is highly
profitable.
Kibbutz Nir Oz and Kibbutz Nirim are both communal agricultural
settlements.
Nir Oz was established in 1957. It has 220 members (total population 400).
They cultivate field crops, breed livestock, etc., as well as operating the
Nir Oz feed mill and other small ventures.
Kibbutz Nirim was established in 1946. It also has 220 members (total
population 400). They cultivate field crops, grow avocado plantation, flowers
greenhouses, operate husbandry (cows, poultry), as well as other small
ventures.
In the framework of a re-organization process, in August 2008 grand-parent
company YTONG INDUSTRIES published a tender offer for the shares of parent
company NIRLAT PAINTS LTD. held by the public (10.6%), in consideration of NIS
13.8 million. Following the completion of the tender offer in the beginning of
September 2008, NIRLAT PAINTS’s shares were de-listed from trade on the Tel
Aviv Stock Exchange (TASE). In parallel, parent company YTONG INDUSTRIES shares
were also de-listed from trade on TASE.
FIMI Fund, which already purchased 50% of INROM in December 2007 for NIS
144 million, purchased the other 50% in November 2008 for NIS 105 million,
reaching full control of INROM Group.
Founded in 1997, FIMI Fund (mainly via 5
funds) is a leading local private equity investment fund (mezzanine and buy-out
fund), headed by its founder Ishay Davidi. Having a successful track record of
67 major transactions (37 cash exits) in total value of over US$ 1.7 billion.
Presently, the Fund has more than US$900 million equity available for new
investments. FIMI investors list includes leading US and Israeli institutional
investors (mainly ISRAEL DISCOUNT BANK). According to American research firm
PREQIN, based on the average annual yield to its investors, FIMI Fund was
ranked the 4th best private equity fund in the world.
In 2005, it was reported that subject received the concession for marketing
sealants of Japanese KANEKA in Israel and several Mediterranean countries.
In March 2006, it was reported that subject launched a new design center
(300 sq. meters in Bnei Brak) with an investment of US$ 1.5 million.
In June 2006, subject signed an agreement with local FRESCO PAINTS IMPORT
& MARKETING LTD., for marketing FRESCO's products.
In May 2009 it was reported that subject signed an agreement with IMPEX of
Italy to be the sole representative in Israel for the next 3 years. Deal
estimated at NIS 10 million.
In July 2009 it was reported that subject signed an agreement with DISNEY,
giving them the exclusive rights for painting Disney’s figures on children room
walls (brand name “Colors). Reported investment in the move is NIS 2.5 million.
In February 2010 it was reported that subject is launching an advertising
campaign for NIS 2.5 million (similar investment to the advertising campaign in
the parallel period of 2009). In June 2010 the Group launched a promotional
campaign with an investment of NIS 6.5 million.
In 2010 NIRLAT acquired CHEMITAL, which holds concessions of international
paint manufacturers for local marketing, for NIS 3 million.
In June 2013 it
was reported that ACE DIY chain, one of the 2 leading chains for DIY products,
chose subject as a strategic partner in order to expand their paints
activities, that on account of subject's main rival TAMBOUR. According to
estimation, ACE captures 2%-3% of paints local sales.
Private consumption expenditure by households in
2012 on Housing and on Housing Equipment grew by 3% and fell by 2.7% from 2011,
respectively, in annual calculation (grew by 2.8% and 20%, respectively, in
2011 from 2010).
Notwithstanding the lack of updated data from subject's officials,
considered good for trade engagements.
NOTES:
1.
According to the Registrar of Companies subject has
a "Warning Before Registration as a Law Violating Company" Status.
Registration as a "Law Violating Company" is done due certain
violation of the subject company for not meeting the Registrar of Companies
regulations promptly, such as not paying Registrar fees, and not submitting
annual reports on time. It should be noted that this is not necessarily
connected to the company's business activities and financial standing. Although
in many cases there is a connection to the bad financial condition of the
company, we believe it is not so in subject's case (i.e. may be a
technical/administrative procedure), though we are unable to determine that.
Once the company is declared as a "Law Violating Company", it may
lead to severe penalties against it, including penalties (could be fines up to
NIS 250,000), not allowing the company to register new charges or to make
changes in the Registrar, and more.
2. 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.66.57 |
|
UK Pound |
1 |
Rs.103.34 |
|
Euro |
1 |
Rs.88.16 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
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 |
|
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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.