|
Report Date : |
14.10.2014 |
IDENTIFICATION DETAILS
|
Name : |
DAVID ARABOV &
SONS (2013) LTD. |
|
|
|
|
Registered Office : |
3 Jabotinsky Street Diamond Exchange, Shimshon Bldg. Ramat Gan 525000 |
|
|
|
|
Country : |
Israel |
|
|
|
|
Date of Incorporation : |
26.12.2013 |
|
|
|
|
Legal Form : |
Private Limited Company |
|
|
|
|
Line of Business : |
Traders, importers, exporters and marketers of polished diamonds. |
|
|
|
|
No. of Employees : |
04 |
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 |
|
Payment Behaviour : |
Unknown |
|
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 – June 1, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
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. Cut diamonds, high-technology equipment, and
pharmaceuticals are among the leading exports. Its major imports include crude
oil, grains, raw materials, and military equipment. Israel usually posts
sizable trade deficits, which are covered by tourism and other service exports,
as well as significant foreign investment inflows. Between 2004 and 2011,
growth averaged nearly 5% per year, led by exports. 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. 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. The
economy has recovered better than most advanced, comparably sized economies,
but slowing demand domestically and internationally, and a strong shekel, have
reduced forecasts for the next decade to the 3% level. Natural gas fields
discovered off Israel's coast since 2009 have brightened Israel's energy
security outlook. The Tamar and Leviathan fields were some of the world's
largest offshore natural gas finds this past decade. The massive Leviathan
field is not due to come online until 2018, but production from Tamar provided
a one percentage point boost to Israel's GDP in 2013 and is expected to
contribute 0.5% growth in 2014. In mid-2011, public protests arose around
income inequality and rising housing and commodity prices. Israel's income
inequality and poverty rates are among the highest of OECD countries and there
is a broad perception among the public that a small number of "tycoons"
have a cartel-like grip over the major parts of the economy. 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. Over the long term, Israel faces structural issues, including
low labor participation rates for its fastest growing social segments - the
ultra-orthodox and Arab-Israeli communities. Also, Israel's progressive,
globally competitive, knowledge-based technology sector employs only 9% of the
workforce, with the rest employed in manufacturing and services - sectors which
face downward wage pressures from global competition
|
Source
: CIA |
Correct Name: DAVID
ARABOV & SONS (2013) LTD.
Telephone 972 3 613 17 65
Fax 972 3 613 16 93
3 Jabotinsky Street
Diamond Exchange, Shimshon Bldg.
RAMAT GAN 5250005 ISRAEL
A private limited company, incorporated as per file No. 51-474303-8 on the 26.12.2013.
We assume that subject took over the business activities of DAVID ARABOV & SONS (1998) LTD., established 1998, as we are informed by subject's officials that this company in the process of turning inactive. In addition, subject is operating from same premises and using same phone/fax nos.
Authorized share capital NIS 2,000.00 divided into -
2,000 ordinary shares of NIS 1.00 each,
of which 200 shares amounting to NIS 200.00 were issued.
1. David Arabov, 50%,
2. Mrs. Dalia Arabov, wife of David, 50%,
David Arabov.
Traders, importers, exporters and marketers of polished diamonds.
Operating from offices premises, owned by the shareholders, on an area of 160 sq. meters, in 3 Jabotinsky Street, Diamond Exchange, Shimshon Building (10th floor, Suite No. 1001-8), Ramat Gan.
Had 4 employees in DAVID ARABOV & SONS (1998) in mid 2013. We assume subject employee no. is similar.
Financial data not forthcoming.
There are 2 charges for unlimited amounts registered on the company's assets (all assets), in favor of Union Bank of Israel Ltd. (charges placed January 2014).
Subject's sales figures not forthcoming.
DAVID ARABOV & SONS (1998) sales
2010 sales claimed to be US$ 7,897,400, of which US$ 3,117,000 were for export.
Sales for the first half of 2011 claimed to be US$ 7,000,000, of which US$ 3,400,000 for export.
Later sales figures not forthcoming.
Also owned by David Arabov & family:
DAVID ARABOV & SONS (1998) LTD., as noted ceasing activities
ARABOV INVESTMENTS LTD., real estate.
D.N. DIAMONDS (2007) LTD., incorporated in 2007, traders, importers, exporters and marketers of diamonds. 2010 sales US$ 57.5 million.
Based on the Companies' Registrar, David Arabov was registered as the 55% shareholder in D.N. DIAMONDS, and in October 2012 a change in shareholders took place, apparently his shares were transferred to Itzhak (Tzahi) Arabov. We know that David Arabov is still involved in D.N. DIAMONDS, though.
ARABOV GROUP LTD., owned by Alon and Doron Arabove, sons of David Arabov, an international diamond company with over US$500 million in annual revenues, engaged in the entire diamond branch – rough trading, polishing, polished dealing, jewelry manufacturing and retailing.
DAVID ARABOV & SONS INTERNATIONAL DIAMONDS LTD., non active.
Union Bank of Israel Ltd., Ramat Gan Branch (No. 062), Ramat Gan.
Nothing unfavorable learned on subject itself.
We were unable to speak with Mr. David Arabov. We spoke to subject's secretary, who was willing to provide general business activity, and informed on DAVID ARABOV & SONS (1998) status.
David Arabov is a veteran and known diamond dealer. He and his family are also known to have holdings in real estate properties.
ARABOV GROUP and their owners/directors Alon Arabov and Doron Arabov are among the diamond dealers involved in the recent illegal affair detailed below, were detained in January 2012 and released by Court home under restrictions.
According to one media article from that date David Arabov, who is Alon and Doron's father, is also mentions as one of the persons taken for interrogation, yet in the Tax Authorities press release he is not mentioned.
ARABOV GROUP was ranked 7th in the 2011 list of Israel's largest polished diamonds exporters with sales for export of polished diamonds of US$ 102 million. It does not appear in the 2012 List, though the reason is not known (it is possible that the company chose not to be published in the list for its own motives, which is their choice).
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 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 a/m affair, prior to filing an indictment, before the Tel Aviv District Attorney (Tax and Finance sector).
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.
Considering the above affair and the lack of data on subject, dealings are recommended on secured basis.
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).
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.
-
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.
-
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.61.24 |
|
|
1 |
Rs.98.68 |
|
Euro |
1 |
Rs.77.60 |
INFORMATION DETAILS
|
Analysis Done by
: |
RAS |
|
|
|
|
Report Prepared
by : |
NIS |
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.