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Report Date : |
07.02.2014 |
IDENTIFICATION DETAILS
|
Name : |
PENFORD (ISRAEL)
LTD. |
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|
|
|
Registered Office : |
P.O. Box 3008, Ramat
Gan (5213001) 21 Tuval Street Diamond Exchange, Yahalom Bldg. Ramat Gan
5252236 |
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|
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Country : |
Israel |
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Date of Incorporation : |
02.07.1980 |
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|
|
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Com. Reg. No.: |
51-085590-1 |
|
|
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Legal Form : |
Private Limited
Company |
|
|
|
|
Line of Business : |
Traders,
importers, exporters and marketers of rough diamonds. |
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|
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No. of Employees : |
15 |
RATING & COMMENTS
|
MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
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 – december 01, 2013
|
Country Name |
Previous Rating (30.09.2013) |
Current Rating (01.12.2013) |
|
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
PENFORD (ISRAEL)
LTD.
Telephone 972
3 575 01 74
Fax 972
3 575 29 56
P.O. Box 3008, Ramat
Gan (5213001) 21 Tuval Street Diamond Exchange, Yahalom Bldg. RAMAT GAN 5252236
ISRAEL
A private limited
company, incorporated as per file No. 51-085590-1 on the 02.07.1980, as part of
the global Steinmetz Family diamond businesses founded in 1949.
* Note: Registered
Latin name is "PANFORD (ISRAEL) LTD.", although subject's
officials confirmed correct spelling is "PENFORD".
Authorized share
capital NIS 200,000.00, divided into -
200,000 ordinary
shares of NIS 1.00 each,
of which 171,550
shares amounting to NIS 171,550.00 were issued.
PENFORD (LONDON) LIMITED., registered in Isle of Man, known
to be owned by Benny Steinmetz, Daniel Steinmetz and Steinmetz family, 84%,
Daniel Steinmetz, 16%.
Daniel Steinmetz
David (Dudi) Shiama
(also manages Group's diamond operations in Israel).
Traders, importers, exporters
and marketers of rough diamonds.
The main company
handling STEINMETZ Family diamond business in Israel.
Operating from office
premises, owned by Steinmetz Family, on a large area of several hundreds sq.
meters, in 21 Tuval Street (also referred to as 54 Bezalel Street), Yahalom
Building (28th Floor), Diamond Exchange, Ramat Gan (shares premises
with sister companies of the Group).
We were informed that
few years ago the Group sold the 500 sq. meters on the 17th Floor
and purchased new offices, on an area of 1,000 sq. meters on the 28th
Floor.
STEINMETZ Group is operating from headquarters in Geneva,
Switzerland, and subsidiaries in many countries, including 6 diamond factories
in Africa and South and East Asia.
Having 15 employees
(same as in 2011 and 2010, had 20 employees in 2009).
Having around 1,500
employees in STEINMETZ Diamond Group worldwide.
Financial data not
forthcoming, known to be financially solid.
STEINMETZ Group has been a DCT Sightholder for many years (currently
via sister company DIACOR INTERNATIONAL LTD.)
There are 4 charges
for unlimited amounts registered on the company's assets, in favor of The
First International Bank of Israel Ltd. and Bank Leumi Le’Israel Ltd. (charges were placed during 2003 – 2005).
Sales figures not
forthcoming, known to be in scales of over hundred US$ million and much more.
STEINMETZ Diamond Group includes:
STEINMETZ-ASCOT LTD.,
processors and polishers, traders, importers, exporters and marketers of cut
diamonds. Operate on relatively very low level.
DIACOR INTERNATIONAL LTD., Switzerland
STEINMETZ-ASCOT DIAMONDS N.V., Belgium
STEINMETZ GROUP OF COMPANIES LIMITED
ASCOT DIAMONDS (PTY) LTD.
ABT DIAMONDS CUTTING WORKS (PTY) LTD.
R. STEINMETZ & SONS (INDIA) PRIVATE LIMITED
NAMCOT DIAMONDS (PROPRIETARY) LTD
R. STEINMETZ & SONS N.V.
ST DIAMONDS
STEINMETZ-ASCOT USA LIMITED
SDG MARKETING INC.
STEINMETZ DIAMONDS (BOTSWANA) (PTY) LIMITED
Steinmetz family has
numerous other holdings in other fields (see more below), including BSG
RESOURCES Concern (controls also local BATEMAN Group) .
The First International Bank of Israel Ltd., Diamond Exchange Branch (No. 026), Ramat Gan.
Bank Leumi Le’Israel Ltd., Diamond Exchange Branch (No. 629), Ramat Gan.
Nothing unfavorable
learned.
The CFO of STEINMETZ Group said subject is operating on very high volumes, but refused to disclose financial information.
STEINMETZ Diamond Group is a multinational group, one of the world’s largest diamond miners, with wide operations in South Africa, Sierra Leone, and other African countries. The Group has also large manufacturing and retail operations, specializing in large, fancy coloured and rare stones.
It was known that the Group suffered from the global economic crisis that adversely hurt the global diamond industry, and as such, subject’s Group was also harmed, though financial data is unavailable.
Mr. Benny Steinmetz, born 1956, is an international wealthy
businessman and entrepreneur. Bloomberg Magazine evaluated his capital at US$
8.1 billion in end of 2012, making him the richest Israeli in the world
(although he resides in abroad). The origin of the wealth comes from the
worldwide family diamond business. BSG RESOURCES (BSGR) is the mining arm of
Steinmetz conglomerate, based in London, with several holdings in public
(traded in London Stock Exchange) and many private companies in natural resources (including gold, copper,
cobalt, steel, etc.), finance, real estate and energy, in volume of US$
billions. Among companies are
KATANGA MINING, NIKANOR, CUNICO, KOIDU, ODIMO, BAKU STEEL, OCTÉA DIAMOND GROUP,
etc.
During the period prior to the global crisis BSGR and BATEMAN
Groups, as well as SCORPIO (Steinmetz real estate investment arm) raised many
hundreds of millions of US$ from the public (in London and Tel Aviv) to finance
their expansion, and when the crisis occurred, they were highly leveraged, with
clear problem to finance future obligations. These companies were obliged to
seek arrangements with their bonds holders and bankers to prevent collapse. In
Israel, the companies have NIS hundreds million debts to the banks and bonds
holders. During 2010 debts the sides reached debts arrangements (re-scheduling
debts), however the affairs has their
negative impact on Mr. Steinmetz reputation in these respect. It should be
emphasized that the above mentioned public affairs do not have
any impact on subject.
In May 2010, as part
of becoming more liquidate, Steinmetz sold 51% of BSGR GUINEA with steel lead
mining to VALE of Brazil for US$ 2.5 billion.
In August 2013 Swiss police searched the Geneva residence of Benny Steinmetz last month as part of an investigation into mining rights in Guinea. The West African country has accused BSGR of paying bribes to obtain its concessions under a previous government. It is reviewing BSGR's right to mine half of Simandou, one of the world's largest untapped iron ore deposits.
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 2012, a 20% decrease from 2011.
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%.
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 refusal to disclose financial data,
considered good for trade engagements.
DIAMOND INDUSTRY – INDIA
-
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.
-
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.
-
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.
-
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.
-
Excerpts from Times of India dated 30th October 2010 is as
under –
-
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.
-
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.62.50 |
|
|
1 |
Rs.101.92 |
|
Euro |
1 |
Rs.84.50 |
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 |
|
-- |
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.