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Report No. : |
351706 |
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Report Date : |
01.12.2015 |
IDENTIFICATION DETAILS
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Name : |
NETAFIM LTD. |
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Registered Office : |
10 Hashalom Rd.,
Tel Aviv 6789212 |
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Country : |
Israel |
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Date of Incorporation : |
28.12.2005 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturers, marketers and exporters of irrigation systems and solutions,
intended for open-field crops, landscape irrigation, greenhouse technology
systems and turnkey greenhouse projects, wastewater management, and advanced
crop management and monitoring systems. Products include: filters, hoses, drippers, dripper lines,
micro-sprinklers, valves, computer controlled irrigation systems. |
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No. of Employees : |
4,200 |
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, 2015
|
Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
|
Israel |
B1 |
B1 |
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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. 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 2013, 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.
Israel's economy also has weathered the Arab Spring because strong trade ties
outside the Middle East have insulated the economy from spillover effects.
Slowing demand domestically and internationally and reduced investment due to
uncertainties caused by the Gaza conflict in summer 2014 have reduced GDP
growth to about 2% during 2014. 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 expected to come online
no sooner than 2017, but production from Tamar provided a one percentage point
boost to Israel's GDP in 2013 and a 0.5% boost 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 and has started splitting up the
oligopolies to address some of the grievances but has maintained that it will
not engage in deficit spending to satisfy populist demands. 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 |
NETAFIM LTD.
Telephone 972 8
647 47 47; 647 47 00
Fax
972 8 647 39 83; 691 19 73
Email: pstmaster@netafim.com
10 Hashalom Rd.
Tel Aviv 6789212
Israel
Originally
established in 1998 as an agricultural cooperative society (ACS) and registered
as such as per file No. 57-003539-4, under the name NETAFIM COOPERATIVE SOCIETY
FOR DRIP IRRIGATION LTD. (NETAFIM ACS LTD.).
The ACS, which
began operation on the 01.01.1999, was incorporated in order to take over all
the activities of 3 “NETAFIM” plants:
1.
NETAFIM IRRIGATION EQUIPMENT AND DRIP SYSTEMS IN
KIBBUTZ HATZERIM (1973), a limited partnership, established in 1973.
2.
NETAFIM MAGAL, a limited partnership, established
in 1974.
3.
NETAFIM YIFTACH - IRRIGATION AND DRIP PROD
Converted into a private limited company,
registered as such as per file No.
51-376909-1 on 28.12.2005 (assuming all business activities of the ACS).
Authorized share capital 0.00 (no face value),
divided into:-
10 convertible type A
shares (issued),
10 redeemable B shares,
510,921 type C shares
(474,719 shares issued),
99,489,059 ordinary shares
(15,388,125 shares issued),
all of 0.00 each (no face value),
of which
15,862,854 shares were issued.
1. BLUEDRIP
Sarl. (registered in Luxembourg), 61.1% of ordinary shares and
all convertible type A shares issued, part of the German international investment fund PERMIRA (headquartered in London, U.K.),
2. NETAFIM
HATZERIM HOLDINGS (A.C.S.) LTD., 32.9% of ordinary shares, fully owned by
Kibbutz Hatzerim, a cooperative society, operating an agricultural communal
settlement,
3. MAGALRON
COOPERATIVE SOCIETY FOR IRRIGATION & DRIPPING LTD., 6% ordinary shares, fully owned by Kibbutz Magal, a cooperative society, operating an
agricultural communal settlement (part of the shares are held in trust by BANK
LEUMI LISRAEL TRUSTEE COMPANY LTD.).
4. TAMIR
FISHMAN, all type C shares, a trustee company.
In 2006 local investment funds MARKSTONE CAPITAL
PARTNERS and TENE FUND acquired 20% in subject, for a sum of US$ 40 million
from the 3 founders, Kibbutz Hatzerim, Kibbutz Magal and Kibbutz Yiftach. Later MARKSTONE and TENE Funds realized an option
and increase their holdings to some 31%.
In September 2011, after long negotiations, international investment fund
PERMIRA acquired 55% of subject (some 20% from MARKSTONE, 10% from TENE, some 17%
from Kibbutz Magal and 8% from Kibbutz Yiftach). In
November 2011 PERMIRA purchased further 6.5% from Kibbutz Hatzerim. In total, PERMIRA paid US$ 510 million for subject's shares (US$ 360
million in cash plus US$ 150 million in promissory notes, i.e. a loan from the
sellers). Additional US$ 75 million were to be paid based on 2012 results (has
been delayed since subject did not meet these results in 2012).
1. Jose G R Barella, Chairman,
2. Dr. Jorg Rockenhauser,
3. Michail Zekkos,
4. Torsten Vogt,
5. Klaus Edelmann, latter 5 are foreign nationals, of PREMIRA,
6. Ms. Einat Rot,
7. Eli Ben Simon,
8. Gilad Winkler,
9. Yosef Lavi.
Ran Meidan.
Manufacturers, marketers and exporters of irrigation systems and solutions,
intended for open-field crops, landscape irrigation, greenhouse technology systems
and turnkey greenhouse projects, wastewater management, and advanced crop
management and monitoring systems.
Products include: filters, hoses, drippers, dripper lines,
micro-sprinklers, valves, computer controlled irrigation systems.
95% of sales are for export, to some 110 countries worldwide.
Amongst local clients: AMIR MARKETING & INVESTMENT IN AGRICULTURE,
HAMASHBIR FOR AGRICULTURE, shopping organizations, etc.
Main suppliers: Valves: DOROT VALVES, BERMAD; Filters: ARKAL, AMIAD.
Among other local suppliers: INTERDAN, ASHALIM AGENCIES, DGS LASER SAFETY, POLYRAM RAM ON INDS., PLASSIM FITTINGS, KRAUSZ INDUSTRIES, I.P.E INTL.,
NAYER (2002), BERMAD, SASSON METALS, J.D POLYMERS, RIMONI PLAST,
SU-PAD, TOP SOLUTIONS, SORPOL, MAPAL, MEISAV LACOL, SYSTEMATITECH, SHOSHANI
& WEINSTEIN, CARASSO.
Operating from main rented offices, on an area of 1,200 sq. meters, in 10 Hashalom Rd.
(Derech Hashalom in Hebrew), Tel Aviv, from further 3
plants in Israel (in Kibbutz Hatzerim, Kibbutz Magal, and
in Kibbutz Yiftach) and 13 plants overseas (including USA,
Australia, Brazil, Chile, India, South Africa, Holland, Peru, Spain, Turkey).
Also operating from subsidiaries offices abroad and worldwide representatives'
offices in over 110 countries.
Having 4,200 employees serving the whole NETAFIM Group, of which 1,100
employees in Israel.
Subject's shares
acquired by PERMIRA Fund were based on a company value of US$ 850
million for subject, though also taking also subject's debt of US$ 150 million (mainly
due to the Dutch company REVAHO acquisition in 2008), which means actual
company value of US$ 1 billion. Reportedly as part of the transaction, Bank
Hapoalim led the financing of the deal, providing subject re-finance for
current operations in volume of US$ 400 million.
Reportedly,
MARKSTONE and TENE funds which acquired subject in 2006 (based on company value
of US$ 200 million) fueled US$ 70 million into subject.
Equity as of 2010
reported to be US$ 80 million, cash – US$ 40 million.
Subject’s total
debt as of 2011 - US$ 120 million (was US$ 350 million in 2008).
Stock was valued
at US$ 100 million in mid 2009.
In March 2015 subject signed a financing
agreement with several banks and financial institutes, led by BANK HAPOALIM, in
volume of US$ 500 million (of which long time loan of US$ 150 million and a
credit line of US$ 350 million) for the next 5 years.
In 2012, reportedly, subject invested US$ 40
million in fixed assets, US$ 25 million in acquisition and establishment of new
companies, and US$ 3 million in a new company in India for customers' finance.
Subject is an “Approved Enterprise” and as
such enjoys tax benefits and State incentives. In
1996/7 the Israeli Investment Center (IIC) approved an investment palns of over
US$10 million for the plants expansion and in 2001 another US$ 27 million
investment plan (expansion of the Hatzerim plant) approved.
According to a
report from June 2013, subject invested US$ 10 million in 2013 in new plants in
Valencia –Spain, in Brazil and in Peru.
In October 2014 it
was reported that subject is contemplating to recycle of its debts in volume of
US$ 230 million, issuing bonds in volume of up to US$ 250 million and a credit
line of US$ 150 million. Subject received (A-) rating for the bond issuing and
a general rating of (BB-). According to the report subject will have liquid
assets in volume of US$ 510 million by the end of 2015.
In December 2014
it was reported that the recycling will be done with the local BANK HAPOALIM,
MIZRAHI TEFAHOT BANK and HSBC BANK (and not with J P MORGAN), which will be in
volume of NIS 1.2 billion + additional credit line of NIS 1 billion.
There are 13
charges for unlimited amounts registered on the company assets, in favor of
Bank Hapoalim Ltd. and IBM ISRAEL LTD. (last 3 charges placed March 2015 in
favor of Bank Hapoalim, prior charges placed 2004-2005 on equipment in favor of
IBM).
2010 sales claimed to be over US$ 600 million, of
which over 90% were for export, with EBITDA of US$ 85 million and estimated net
profit US$ 15 million.
2011 sales were US$ 809 million, with EBITDA of US$
115 million.
2012 sales were US$ 750 million (95% for export),
with gross profit reported to be 32% of sales.
2013 sales were US$ 750 million, 95% were for export.
2014 sales were US$ 750 million. According to
reports from October 2014, estimated 2014 EBITDA is US$ 80-US$ 90 million.
2015 sales expected to exceed US$ 800 million, 95% for export.
Subject also owns
over 27 subsidiaries around the world, among them:
REVAHO B.V., 75%, of the Netherlands.
NETAFIM IRRIGATION
INC., USA
NETAFIM COOPERATIE
U.A, the Netherlands
NETASHA GROUP
B.V., the Netherlands
NETAFIM BRASIL SISTEMAS E EQUIP DE IRRIGAÇÃO LTDA, Brazil
NETAFIM SULAMA SISTEMLERI SANAYI VE TICATET LTD, Turkey
NETAFIM DRIP MANUFACTURERS, South Africa
NETAFIM AUSTRALIA
PTY LTD., Australia
NETAFIM THAILAND
CO. LTD., Thailand
NETAFIM IRRIGATION INDIA Pvt. LTD., India
NETAFIM CHILE LTDA, Chile
NETAFIM PERU S.A.C., Peru
NETAFIM DEUTSCHLAND GmbH, Germany
NETAFIM KOREA LTD., Korea
NETAFIM IRYGACJA SP. ZO.O., Poland
NETAFIM CZECH s.r.o., Czech Republic
NETAFIM MEXICO S.A. de C.V., Mexico
NETAFIM SLOVAKIA, S.R.O., Slovakia
NETAFIM CENTRAL EUROPE (1994) LTD.
Bank Hapoalim Ltd., Business Center Branch
(No. 600), Tel Aviv – main account.
Mizrahi Tefahot Bank Ltd., Main Branch (No.
461), Tel Aviv.
The First International Bank of Israel Ltd.,
Main Branch (No. 046), Tel Aviv.
Union Bank of Israel Ltd., Tel Aviv Main
Branch (No. 063), Tel Aviv.
Israel Discount Bank of Ltd., Main Branch
(No. 010), Tel Aviv.
Nothing unfavorable
learned.
Subject is the global pioneer in the drip
irrigation field and considered the largest company in the world in this area with
estimated 35% market share (although drip irrigation captures mere 5% of the
whole global irrigation market). It is one of the largest exporters in Israel,
the largest one of the Kibbutz movement. Subject is the only Israeli company to
be part of the UN Water Mandate Organization.
Israeli companies
are considered pioneers and world leaders, including subject, NAANDAN JAIN and
JOHN DEERE WATER (formerly PLASTRO).
Subject is ISO 9001:2008, ISO 14001 and ISO
18001:2007 certified.
The new investor in subject,
German PERMIRA Fund, established in 1985 and headquartered in London,
U.K,
is a global investment fund, with € 25 billion under management, with a
portfolio of some 200 companies, in the industry, retail, communication and
health service sectors.
According to the
deal subject will remain in Israel under Israeli management.
Reportedly, PERMIRA plans an IPO for subject.
Kibbutz Hatzerim (established 1946, some 450 members) and Kibbutz Magal
(established 1953, 240 members), both are cooperative societies, each also
cultivates large area of agricultural lands, including fruit plantations,
operating dairy farming, poultry, etc. Both Kibbutz's have other smaller
ventures.
In April 2007, it was reported that subject
is participating in agricultural research projects in Poland, funded by the
European Commission in volume of €3 million.
In October 2007, it was reported that RIMONI
PLAST will supply subject plastic injected products in value of US$ 7 million
in 2 years.
In early 2008 subject completed the acquisition
of control (75%) in Dutch REVAHO, considered among the largest in the world in
manufacturing and marketing greenhouses, and also distributors of irrigation
equipment (with 2007 turnover US$ 100 million) and 120 employees in their
plants in Holland and Romania. REVAHO was thus far subject's sole
representative in Holland and the U.K. The deal was estimated at US$ 70 million
for the 75% stake. In 2011 REVAHO won a large project in Russia in volume of
tens US$ million.
The global economic crisis in late 2008 – 2009 adversely affected subject,
as it did for the branch. Subject took efficiency steps, workers were
dismissed, and new investments in expansion were halted. Apparently, coupled
with the recovery in the relevant global markets, the re-organization proved
successful. Subject was also awarded Cleantech Exporter for 2011 by the
Ministry of Economy. In 2011-2 subject returned to new investment and
penetration to new markets, notably Chinese market.
In February 2008, as part of its focus in
the Indian market, where it estimates it has a 20% market share in its field
(being 2nd largest) subject reported it launched a global planning
center in India, and completing the construction of a 2nd plant in
India (having 500 employees employed in the plant in North India).
In July 2008, subject announced the
acquisition of EDEN IRRIGATION of France, established in 1989 and supplies DIY
irrigation products. The company's 2007 sales reported to be € 7 million.
In March 2009 subject reported on a huge
contract in Brazil for supply of its irrigation systems in value of US$ 150
million; Also in March subject won a tender in Peru to supply irrigation
systems in value of US$ 22 million.
In June 2012 it was reported that subject,
as part of a global agreement by 45 multinationals' commitment for non-profit
activities, will assist 50,000 farmers in India to shift to advanced irrigation
techniques, and will assist the Brazilian Government to implement irrigation
systems in remote rural areas.
In July 2013 it was reported that subject opened a plant in Valencia, Spain, following the expansion of activities in Spain, Portugal and
Africa. 2 other plants in Brazil and Peru were opened in 2013.
In August 2014 it was reported that subject
in advanced stages for a deal to supply Ethiopian governmental company with
irrigation equipment in volume of some US$ 200 million. According to the
report, financing (for the Ethiopian company) will be via an Israeli financial
consortium headed by Bank Hapoalim.
In January 2015 it was reported that subject
will participate in India's largest irrigation project to supply water to some
6,700 small farmers. Project is in volume of US$ 120 million, of which
subject's part is US$ 60 million.
In May 2015 it was reported that subject
signed a NIS 50 million deal with CSS (a sugar cane company) of Senegal.
In July 2015 subject reported it signed a
deal with VINGROUP of Vietnam in volume of NIS 65 million, to supply irrigation
equipment, as well as construct and manage a greenhouse project in Vietnam.
Good for trade
engagements.
Maximum unsecured credit recommended several
US$ millions.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.66.81 |
|
|
1 |
Rs.100.36 |
|
Euro |
1 |
Rs.70.68 |
|
ILS |
1 |
Rs.17.18 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
: |
KIN |
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Report Prepared
by : |
TPT |
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 |
|
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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 |
|
|
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 |
|
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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 |
|
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
|
-- |
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.