MIRA INFORM REPORT
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Report Date : |
25.01.2014 |
IDENTIFICATION DETAILS
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Name : |
E.F. DESIGNS LIMITED PARTNERSHIP |
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Registered Office : |
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Country : |
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Financials (as on) : |
30.09.2013 |
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Date of Incorporation : |
28.08.2003 |
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Legal Form : |
Limited Partnership |
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Line of Business : |
Importers and marketers of furniture, household products, lighting elements,
home textile goods |
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No. of Employees : |
371 |
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 – September 30, 2013
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Country Name |
Previous Rating (30.06.2013) |
Current Rating (30.09.2013) |
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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.
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Source
: CIA |
E.F. DESIGNS LIMITED PARTNERSHIP
(Also known under trade name BETILI; or in short as EFD)
Telephone 972 3 953 64 00
Fax 972 3 961 17
89
2 Haetzel Street
New Industrial Zone
RISHON LE-ZION 7570604 ISRAEL
A limited partnership, registered as per file No. 55-021484-5 on
28.08.2003.
Subject was incorporated in order to merge all retail activities of the
BEITILI and I.D. DESIGN retail marketing chains, which were transferred to
subject on 01.09.2003.
1.IKOO DESIGNS LTD., 50.5%, limited partner, a fully owned subsidiary of
CARMEL HOLDINGS (I.L) LTD., a public limited liability
company, whose shares are traded on the Tel Aviv Stock Exchange (TASE) (on the
preservation list), controlled by Eitani Family (79.7%) and NORSTAR HOLDINGS
INC. (14.8%, publicly traded on TASE), controlled by Haim
Katzman,
2.F.C.P. DESIGN LTD. (trading as I.D.DESIGN), 48.5%, limited partner,
owned by Eliezer Fishman & family,
3.E.F. HOME DESIGNS LTD., 1%, equally controlled by the 2 above
mentioned partners, being the general partner.
During 2013 3rdQ, CARMEL HOLDINGS acquired an additional 1% of subject
from FISHMAN Group (till then equally held subject), reaching a 51% holding in
subject.
Aviv Eitani.
Importers and marketers of furniture, household products, lighting
elements, home textile goods, operating retail chains of 23 retail stores,
under the brand names "Betili" (17 stores), "IDdesign" (3
stores), "Rich and Taylor" (3 stores). In addition, also operate
"My Home Page" (13 stores and via the Internet, focusing on young
audience), and run a store under the name “Hazorea Furniture Center”.
Marketing is also via other channels, including hotels, contractors,
workers' unions
Some 60% of purchase is import. Among foreign suppliers: REDA, WOODFAP,
IMPERIORS, R.R. INDUSTRIES, all from India.
Among local suppliers: IKOO DESIGNS (affiliate), SHIR FURNITURE, etc.
Operating from rented offices in CARMEL HOLDINGS headquarters premises (total
area spans over 1,200 sq. meters which partly serve subject), in 2 Haetzel
Street, New Industrial Zone, Rishon Le-Zion, and from 23 retail stores
nationwide. Group operated from logistics center in Western Ariel Industrial
Zone, Ariel, and from warehoused in Barkan and Kibbutz Hazorea.
Having 371 employees in the Furniture Segment of CARMEL HOLDINGS (mostly
in subject) as of March 2013.
Financial data is included (relatively) in the consolidated B/S of
parent company, CARMEL HOLDINGS (I.L) LTD. LTD., which shows:
NIS (thousands)
31.12.2012 30.09.2013
ASSETS
Current assets
Cash
and cash equivalents 4,419 4,765
Customers 54,631 73,225
Other accounts receivable 9,828 11,474
Stock 63,210 89,281
132,088 178,745
Non-current
assets
Fixed assets (net) 34,281 40,010
Other non-current assets 16,570 9,865
50,851 49,875
182,939 228,620
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LIABILITIES
Current liabilities 95,662 141,284
Non-current
liabilities 32,559 30,012
Equity 54,718 57,324
182,939 228,620
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CARMEL HOLDINGS current market value US$ 10.2 million.
Assets attributed to the Furniture Segment in CARMEL HOLDINGS financial statements (mainly attributed to subject) as of
31.12.2012 (in brackets 31.12.2011): NIS 71,057,000 (NIS 85,856,000).
Liabilities: NIS 53,008,000 (NIS 61,427,000).
According to CARMEL HOLDINGS financial statements, the
Furniture Segment sales (in essence represents subject’s sales, proportionally
to CARMEL’s (then 50% in subject):
2009 in were NIS 101,586,000 (6.5% lower than 2008),
making an operating loss of NIS 24,000,ending with a net loss of
NIS 1,225,000.
2010 sales were NIS 105,632,000, making an operating
profit of NIS 950,000, ending with a net loss of NIS 757,000.
2011 sales were NIS 116,878,000, making an operating
profit of NIS 2,500,000, and a profit of NIS 1,345,000.
2012 sales were NIS 102,185,000, making an operating loss
of NIS 924,000.
The decrease in sales from 2011 was due to closing of
branches and a deacrease in activity volume.
Sales for the first 9 months of 2013 were NIS
103,600,000, making an operating profit of NIS 3,656,000.
Consolidated
Statement of Income
NIS
(thousands)
Year
ended on the 31.12
2010 2011 2012
Revenues 223,701 243,602 231,497
Gross profit 94,388 106,862 97,414
Operating income 12,203 11,228 6,435
Income before
income taxes 7,912 8,294 4,104
Net profit 5,541 7,942 3,617
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CARMEL HOLDINGS (I.L) LTD. LTD. consolidated first
9 months of 2013 sales were NIS 200,735,000, making a gross profit of NIS
83,068,000, an operating income of NIS 7,004,000 and a net income of NIS
2,606,000.
OTHER COMPANIES
CARMEL HOLDINGS (I.L) LTD., parent company, via subsidiaries dealing as
manufacturers, importers, marketers and retailers of:
1.Furniture (subject's segment), household goods
2.Floor Covering, carpets and parquet floors; sold via “Carmel Carpets & parquets” chain store of 18 branches (4
operated directly and rest via concessionaires), as well as floor covering
departments inside retail chains Home Center (12 points), Betili (12), IDdesign
(3) and "Floor" store in Tel Aviv Port
Also controls:
CAESAREA CARPETS (97) LTD. (known as CARMEL CARPETS), 100%, manufacturers, importers, marketers and exporters of woven and wall-to-wall
carpets, concentrates Group's institutional sales activities in the floor covering
field to retail chains, owns SHAKED CARPETS LTD., 50%, floor covering importers
and marketers, mainly parquets, and HIGH SYSTEM OFFICE
FURNITURE LTD., 51%, marketing office furniture for the institutional market.
IKOO DESIGNS LTD., 100%, furniture manufacturing,
E.F. DESIGN LP (EFD), 50%,
E.F. HOME DESIGNS LTD., 50%, management company for the above chains.
CARMEL FLOOR DESIGN LTD., in charge of the sales of floor covering to
the domestic market.
ZIEGLER INVESTMENTS LTD., 100%, investments and real estate.
Eitani family also owns, among other companies:
HAIM EITANI HOLDINGS LTD.
CLASSIGAN LTD., 33%, garden furniture manufacturers and marketers.
NATZRANIT HOLDINGS LTD., fully owned by Aviv Eitani, owns EAGLE
FORKLIFTS AND LOGISTICS LTD., 100%, importers and marketers of forklifts. Also
have holdings in real estate ventures.
NORSTAR HOLDINGS INC., a foreign publicly traded
company, current market value US$ 694.3 million, part of GAZIT GLOBE Group, operating in the real estate investment fields, in
acquisition, development and management of yielding properties in Israel, North
America, Northern Europe. Holds 50.6% in GAZIT GLOBE LTD., publicly traded on
TASE, current market value US$ 2,268.2 million.
F.C.P. DESIGN LTD., parent holding company, part of FISHMAN Group.
FISHMAN CHAINS LTD.,
a roof company for FISHMAN Group’s retail businesses, operating retail chain
stores, managed by Eyal Fishman:
HOME CENTER (DIY) LTD., local largest DIY and household goods, indoor
and outdoor furniture, electrical and building materials and appliances, etc
(48 branches nationwide). Annual consolidated sales were around NIS 1 billion.
HYPERTOY LTD., importers and
marketers of toys (including children and youth bicycles), games (including
multimedia) and accessories, operating 2 retail chains: Toys’R’Us - 20 branches
and The Red Pirate" – 20 branches.
FISHMAN CELLULAR DIVISION GENERAL PARTNERSHIP,
importers and distributors of cellular phones
ZER. 4. U (2000) LTD., a retail flower chain, operating some 30 stores
nationwide (mostly by concessionaires).
BEST BUY MARKETING CHAINS LTD., 50%, domestic electrical &
electronics appliances retail chain stores “Best Buy” (some 15 branches) and
“Big Box” (19 branches) , also operate e-shopping website PI-1000. Estimated
annual sales of NIS 200 million.
CELIO CLOTHING AND FOOTWEAR LTD., men’s fashion
wear chain (some 20 branches).
TELEPHARMA THE FIRST DIRECT PHARMACY (1999) LTD., Israel’s first direct
marketing pharmacy
TEN - PETROLEUM COMPANY LTD., operates 35 petrol stations.
GLOBRANDS AGENCIES 2007 LTD., 40%, importers and marketers of tobacco
products of BRITISH AMERICAN TOBACCO (BAT), of the U.K.
As well as the ACCESSORIZE franchise for fashion accessories.
Eliezer Fishman and family own, control and
manage companies in major important sectors in Israel (finance, industry,
energy, hi-tech, media), real estate assets as well as numerous foreign
companies. Main publicly traded companies controlled by FISHMAN Group are real estate holdings companies JERUSALEM ECONOMY LTD. (JEC), one of the
largest in Israel, and its subsidiary INDUSTRIAL
BUILDINGS CORPORATION LTD., both publicly traded on the Tel Aviv Stock Exchange
(TASE), as well as DARBAN INVESTMENTS LTD. and MIRLAND
DEVELOPMENT CORPORATION PLC.
Bank Leumi Le’Israel Ltd., Tel Aviv Central Branch (No. 800), Tel Aviv,
account No. 785500/68.
A check with the Central Bank's database did not reveal anything
detrimental on subject’s a/m account.
Mercantile Discount Bank Ltd., Tel Aviv Main Branch (No. 654), Tel Aviv.
Nothing unfavorable learned on subject.
Despite our efforts, we were unable to speak with subject's officials,
as they were always unavailable. We left messages which so far remain
unanswered.
Subject's chain stores, especially the “Betili” brand, are well-known
locally, among the leading in their fields.
Subject estimates its market share of the home furniture sector at circa
7%. The whole market comprises of 15 large chain stores and hundreds of retail
stores.
Subject was established in view of joining forces of two local leading
players in the furniture arena, Eitani family/ CARMEL HOLDINGS Betili retail
chain on one hand, and Fishman Group's IDdesign Chain. In mid 2003, both sides
signed an agreement to merge the retail activities -administrative and
logistic, establishing subject's partnership, though both chains keep their
commercial logos.
FISHMAN GROUP is controlled by Eliezer Fishman,
a leading local businessman and entrepreneur, one of the most influential
figures in the local business and commercial community.
NORSTAR HOLDINGS INC., which invested in parent CARMEL HOLDINGS, is a public foreign company, whose shares are traded on the Tel Aviv Stock
Exchange, part of the leading GAZIT GLOBE Group, operates in the
real estate investment fields.
GAZIT GLOBE is a well-known leading real estate investment company traded
in the Tel Aviv stock exchange as part of the Tel Aviv 25 Index (symbol: GLOB).
In the financial statements for the 2nd & 3rd
quarters of 2008 parent company CARMEL HOLDINGS accountants tagged a “going
concern” notice in their financial statements reviews, due to the events
described below.
In May 2006 CARMEL HOLDINGS acquired 50.1% of the veteran and large
carpet plant ATLAS in Turkey and formed GAYA INTERNATIONAL. CARMEL HOLDINGS
signed the deal with the Turkish family Cetinkaya, owners of ATLAS that will
market the new plant products. During 2007 the venture encountered heavy
financial difficulties, due to market conditions and an internal fraud (reached
accumulated deficit of over NIS 20 million, and irregularities committed by the
Turkish senior managers in volume of NIS 8.5 million).
GAYA shut down its offices and manufacturing lines by November 2007, and
dismissed all workers. In April 2009 the Court in Turkey declared as GAYA
insolvent and the intention to nominate a receiver.
In December 2005, CARMEL HOLDINGS completed a NIS 50 million capital
raise in a public offering of convertible bonds. Following their financial
distress CARMEL HOLDINGS announced they had no available means to pay its bonds
holders. By December 2008 CARMEL HOLDINGS reached a settlement agreement with
its bonds holders, mostly institutional holders, to redeem the debts paying a
discount of just more than a half of the actual value (some NIS 56 million),
converting some of the bonds into shares and postponement of payments.
According to the arrangement, controlling shareholders fuel NIS 8
million (Eitani family and GAZIT) and CARMEL HOLDINGS was given NIS 5 million
bank loan. In order to meet its obligations, CARMEL HOLDINGS put their owned
real estate properties as collateral. In addition, in case CARMEL HOLDINGS will
see money from the investment in Turkey, it will go for settling the debts. The
settlement agreement was approved by Court in March 2009 and came into force.
In practice, the settlement allowed CARMEL HOLDINGS to continue normal
operation. As result of the settlement, equity climbed back to current levels
and financial condition improved.
In April 2009 CARMEL HOLDINGS made a partial bonds redemption of NIS 14
million and further redemption on 31.12.2009.
In February 2008, subject launched a new sub chain that specializes in
leather furniture called "Leatherland" in Rishon Le-Zion. Subject was
planning to open 4 stores within the next 2 years, with initial investment of
NIS 10 million and even to target overseas markets.
In February 2009, BEITILI Group opened 3 new retail stores as part of a
new furniture chain targeted at the young audience and “low budget”, called “My
Home Page”. Initial investment was NIS 1 million.
In April 2012 subject closed its store in Gaash.
From the Central Bureau of Statistics
(CBS) National Accounts for 2012, it turns that in 2012 expenditure by local
households on private consumption grew by 2.7% from 2011, after rising by 3.8%
in 2011. Expenditure on durable goods decreased by 4% (after 10.5% rise in 2011
and 12% rise in 2010), although a breakdown shows that expenditure on furniture
rose by 3%. Expenditure on private consumption continued to grow in 2013: it
rose by 5.6% in 3rdQ 2013, after a 6.2% increase in the 2ndQ 2013.
Per-capita expenditure increased in 2012 by 0.9% (1.9% rise in 2011).
According to Central Bureau of Statistics (CBS), import of
consumer goods in 2013 marked a 2.2% increase continuing the rise of 1.9% in
2012 and 9.8% in 2011. Most of the rise was in durable goods (4.1%), which
comprising some 40% of the import volume, while import in durable goods rose by
mere 0.9% from 2012. Main rise derived from import of Household Utensils in
2013 which rose by 2.5% from 2012, summing up to NIS 2,546 million (in NIS terms,
9.5% in $ terms), after 1.7% in 2012. In contrast, in the import of Furniture
and Domestic Electrical Equipment a3.6% decrease was marked in 2013 comparing
to 2012.
Import of furniture (excluding plastic furniture) in 2010 totaled US$
227 million, of which 25% was from China, 19% from Italy.
Export of furniture (excl. plastic furniture) summed up to US$ 18
million.
Local furniture and allied accessories is valued at NIS 9 billion per
annum (2012).
According to a survey in 2011, customers prefer mostly carpenters and
small shops (65%), and large retail chains (35%, over 8% of which by DIY chain
IKEA).
The local furniture branch is considered to
be in relatively high risk branch.
According to a survey published in January 2012 by
credit analysis firm for 2011, it turns that Wood & Furniture Manufacturing
and Wholesale branch worst in the credit days outstanding in the various
industrial branches (some 124 days credit days). The average credit days
outstanding in practice (meaning credit days agreed plus unplanned delay) for
Israeli suppliers in the first half of 2011 reached 96 days, making it well
higher than average credit days outstanding in the developed world (around 50
days).
Good for trade engagements.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.62.18 |
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1 |
Rs.103.38 |
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Euro |
1 |
Rs.85.09 |
INFORMATION DETAILS
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Report Prepared
by : |
NNA |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>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 |
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<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.