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Report Date : |
12.05.2014 |
IDENTIFICATION DETAILS
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Name : |
LEO SCHACHTER DIAM |
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Formerly Known As : |
LEO SCHACHTER LTD |
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Registered Office : |
54 Bezalel
Street, Diamond Exchange, Yahalom Bldg. Ramat Gan 5252138 |
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Country : |
Israel |
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Date of Incorporation : |
13.07.1981 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Subject is a Diamond Cutters, Polishers, Traders, Importers, Marketers
and Exporters. |
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No. of Employees : |
Not Available |
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 – March 31, 2014
|
Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low Risk |
A2 |
|
Moderate Low Risk |
B1 |
|
Moderate Risk |
B2 |
|
Moderate High Risk |
C1 |
|
High Risk |
C2 |
|
Very High Risk |
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 since 2011 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
Tamar field started meeting all of Israel's natural gas demand in 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. In May 2013 the Israeli government, in a politically
difficult process, passed an austerity budget to reign in the deficit and
restore confidence in the government’s fiscal position.
|
Source
: CIA |
LEO SCHACHTER
DIAM
Telephone 972
3 576 62 22
Fax 972 3 613 24 89
Email: ramatgan@lsdco.com
54 Bezalel Street
Diamond Exchange, Yahalom Bldg.
RAMAT GAN 5252138
ISRAEL
A private limited
company, incorporated as per file No. 51-089213-6 on the 13.07.1981, as an
amalgamation of the diamond business activities of Late Leo Schachter founded
in the USA in 1952 and those of David Namdar in Italy.
It was originally
registered under the name SCHACHTER & NAMDAR POLISHING WORKS LTD., which
changed to LEO SCHACHTER LTD. on the 30.08.2005 and finally changed to the
present name on the 24.07.2006.
During 2004 subject's shareholders decided to split their activities, and
part of the activities were transferred to a newly established subsidiary MOSHE
NAMDAR & CO. LTD., which later in 2007 separated from subject's Group
altogether.
Authorized share
capital NIS 1,000.00, divided into –
1,000,000 ordinary
shares of NIS 0.001 each, fully issued.
1. LEO SHACHTER & CO. INC.,
of the USA, 49.5%, owned by the heirs of Leo Schachter, Tannenbaum and
Greenberg families,
2. FANCY DIAM
3. Lenard Kramer, 5.5%,
4. Moshe Namdar, 3.83%.
1. Elliot Tannenbaum, President & Co-General
Manager,
2. David Greenberg, Co-General Manager,
3. Dov Tannenbaum.
Diamond cutters,
polishers, traders, importers, marketers and exporters.
Almost all sales
are for export.
Among local
clients: B. BRIZA COLORS, MULTI-NATIONAL DIAMONDS, R.E.S. DIAMONDS, AVNER \ EIZENSTEIN
DIAMONDS.
Among local
diamond suppliers: OFER MIZRAHI DIAMONDS
Operating from
owned premises, in Yahalom Building, Diamond Exchange, 22nd Floor,
in 54 Bezalel Street (also referred to as 21 Tuval Street), Ramat Gan.
Also operating from factories in Botswana, Mumbai and Bangkok, and offices
in New York, Mumbai, Hong Kong, Toronto and Dubai.
Exact number of employees unavailable. Known to have some 1,800 employees
serving LEO SHACHTER Group worldwide, of which over 100 employees in
Israel.
Financial data not
forthcoming, but known to be financially solid.
Subject is a Diamond Trading Company (DCT) Sightholder from DE BEERS for many years. According to reports from February 2004,
they are the largest receiver from a DE BEERS Sight in volume of US$ 150-200
million per year.
There are 5 charges for unlimited amounts
registered on the company's assets, in favor of Bank Leumi Le’Israel Ltd. and
Israel Discount Bank Ltd. (last 4 charges placed January-April 2000).
According to the data published by the
Israel Supervisor on Diamonds in the Ministry of Industry & Trade, export
of polished diamonds by subject (actual overall sales presumed to be higher, as
there are local sales of polished diamonds and may have sales of rough diamonds
as well), were as follows:
2006 sales for
export (net) were US$ 460,000,000.
2007 sales for
export (net) were US$ 446,000,000.
2008 sales for
export (net) were US$ 352,000,000.
2009 sales for
export (net) were US$ 215,000,000.
2010 sales for
export (net) were US$ 359,000,000.
2011 sales for
export (net) were US$ 403,000,000.
2012 sales for
export (net) were US$ 317,000,000.
2013 sales for export (net) were US$ 328,000,000.
LEO SCHACHTER DIAM
SHACHTER AND
NAMDAR HOLDINGS LTD., a holding company.
E.M.A. DIAM
I. LESHEM DIAMONDS
LTD., 100%, traders, importers, exporters and marketers of diamonds.
KAMA-SCHACHTER
JEWELLERY, Mumbai, India.
S.N.W LTD.
And other foreign
companies/ subsidiaries.
Subject’s
shareholders also hold and involved in many other companies.
Israel Discount Bank Ltd., Diamond Exchange Branch (No. 080), Ramat Gan.
Nothing
unfavorable learned.
Similar to the
previous years, officials refused to disclose financial and other business
details, as a matter of policy.
According to the
report published by the Israel Supervisor on Diamonds in the Ministry of
Industry and Trade, subject was ranked 1st in the 2013, 2012 and the
2011 list of Israel's largest polished diamonds exporters for the first time.
In previous years (2005 till 2010) subject was ranked 2nd to LLD
DIAM
Subject enjoys
excellent reputation in Israel and world wide.
In 1995 it was
reported that subject’s shareholders acquired 2 floors (21st and 22nd
floors- total of 2,300 sq. meters) in the Yahalom Building, in consideration of
US$ 10 million. Part of the area was rented, the rest used by subject.
In July 2003, it
was reported that subject will own 49% in a new diamond processing plant in
Canada.
In February 2004,
it was reported that subject will establish a partnership with WILLIAM GOLDBERG
DIAM
In May 2005, it
was reported that the SCHACHTER & NAMDAR Group acquired a 3,000
sq. meters plot in central Tel Aviv, for a sum of US$ 15 million. The plot is
designed for 18 story building, for residential and commercial purposes.
In February 2004 subject announced a structural change in the SCHACHTER
& NAMDAR Group, initially the establishment of a subsidiary MOSHE NAMDAR
& CO. LTD., that, in order to maximize potential where each party will
focus on different markets. In the beginning of 2007 the split was completed
between the activities of the Namdar Brothers, Moshe Namdar and Abraham Namdar
and the LEO ASCHACHTAR Group.
It was also
reported that subject is operating to strengthen its global activities in
addressing the fast emerging Chinese market, and by strengthening the
"Leo" diamonds brand in the American, British and Italian markets.
In March 2007 it
was reported that subject is suing NIS 10 million from local contractor David
Appel, claiming he failed to return on time a loan given to him in
It was reported in
late 2008 that as part of the re-organization in subject’s Group designed to
save costs in view of the global economic crisis and its sever effect on the
diamond industry, subject had to dismiss several employees and closed down
local sorting activities, while polishing activities have been already carried
out by sub-contractors. The effects of the crisis can be seen in the plunge in
subject’s sales for export.
In the beginning
of 2009 subject suffered from the collapse of two main American diamond chains
(subject was mentioned as one of their suppliers/ creditors) CHRISTIAN BERNARD
and SHANE that went bankrupt.
As could be seen
in 2010 reported sales, it appears that subject has recovered from the 2009
crisis, as most of the diamond industry has in 2010.
Israel's diamond
industry remarked on impressive growth in almost all trade parameters in 2013,
from the data by Israel's Diamond Administration at the Ministry of Economics:
Net export of polished diamonds rose by 11.6% from 2012, reaching US$ 6.2
billion. The market has been volatile in recent years: the branch –in Israel as
well as globally- experienced its worst depression in the 2nd half
of 2008 and 2009 due to the global economic crisis (almost an entire freeze and
collapse in sales of about 70% in the peak of the crisis), then recovered in
2010 and mainly in and fell again in 2012 (net export fell by 23% in 2012 from
2011).
Net rough diamond
exports totaled US$2.9 billion in 2013, a mere rise from 2012.
Net imports of
polished diamonds remained in similar level as 2012 (after drop by 25% in 2012
from 2011), totaling US$4.3 billion, while net rough diamonds imports summed at
US$ 4 billion, 4% up from 2012 (when it fell 13% from 2011).
The United States
continued to be Israel’s major market for polished diamonds, accounting for 37%
of the market in 2013 (35% in 2013). Hong Kong is the next largest market with
27% of exports, with Switzerland accounting for 9.3%, Belgium 7.3%, and India
accounting for 2.3% of Israel's polished diamond export.
According to the
President of the Israeli Diamonds Association, in 2010 the trade in the local
diamond sector rolled 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
global crisis. The Ministry of Economics also assisted the local diamond
exporters by providing bank guarantees in total scope of NIS 1 billion.
In February 2009,
Israel was ranked as the world’s largest exporter of cut diamonds, followed by
India, Belgium and South Africa.
Local diamond
sector employs some 20,000 persons.
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. The Attorney General is in process of
preparing indictments.
In the end of
December 2013 it was reported that 5 diamond dealers were summoned to a hearing
(not mandatory) regarding the a/m affair, prior to filing an indictment, before
the Tel Aviv District Attorney (Tax and Finance sector).
Notwithstanding
refusal to disclose financial and other data, considered good for trade
engagements.
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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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 –
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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.
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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.60.05 |
|
|
1 |
Rs.101.65 |
|
Euro |
1 |
Rs.83.07 |
INFORMATION DETAILS
|
Analysis Done by
: |
DIV |
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Report Prepared
by : |
NIS |
RATING EXPLANATIONS
|
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 |
|
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.