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Report No. : |
309458 |
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Report Date : |
27.02.2015 |
IDENTIFICATION DETAILS
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Name : |
LLD DIAM |
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Registered Office : |
23 Tuval Street Diamond Exchange, Noam Bldg. Ramat Gan 5252238 |
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Country : |
Israel |
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Date of Incorporation : |
12.10.1997 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Miners, international manufacturers and traders in diamonds, dealing as cutters,
polishers, importers, exporters and marketers of all sorts of diamonds for
fine jewellery. |
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No. of Employee : |
90 (2014) |
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 – December 31, 2014
|
Country Name |
Previous Rating (30.09.2014) |
Current Rating (31.12.2014) |
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Israel |
A2 |
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 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 |
LLD DIAM
Telephone 972 3 755 11 11
Fax 972 3 612 27 15
Email: dan@lld-diamonds.co.il
23 Tuval Street
Diamond Exchange, Noam Bldg.
RAMAT GAN 5252238 ISRAEL
A private limited company, incorporated as per file No. 51-254128-5 on the
12.10.1997, continuing activities which began in the mid 1970's by Lev Leviev.
Authorized share capital NIS 34,300.00, divided into -
34,300 ordinary shares
of NIS 1.00 each,
of which 104 shares amounting to NIS 104.00 were issued.
Subject is fully owned by Lev Leviev.
(Note: According to the Registrar of Companies, Moshe Leviev holds 1 single
share).
Zevulun Leviev.
Miners, international manufacturers and traders in diamonds, dealing as cutters,
polishers, importers, exporters and marketers of all sorts of diamonds for fine
jewellery.
LEVIEV Group operates in all stages of the diamonds chain – from mining and
production to sales and marketing. Dealing in cut and rough diamonds.
LEVIEV Group controls its own diamond mines, some of which are located in
Namibia and Angola. Most manufacturing and processing is abroad, imported to
Israel either as rough for sale to other dealers or as cut diamonds for sale
and export.
Diamonds and jewelry are sold also via the Group’s chain of fancy stores
around the world.
Operating from premises owned by shareholders, on a total area of 1,200 sq.
meters, in 23 Tuval Street (also referred to as 52 Bezalel Street), Noam
Building (11th & 9th floors – subject’s shareholders
own and occupies the entire floors), Diamond Exchange, Ramat Gan. Group also
operating from mines, plants and offices in South Africa, Namibia (see below)
and Angola, polishing plants in India and Far East and branches in Antwerp, New
York, London, Moscow, Rome, China/ Hong Kong, India and Dubai/ UAE.
Having around 90 employees in Israel as of mid 2014 (similar to 2013 and
end of 2012, had 100 employees in early 2012, same as in 2011), as well as
hundreds of employees serving LLD Group worldwide (couple of hundreds in
Israel).
Financial data not forthcoming, however subject is known to be financially
strong and solid.
Subject was hit by the severe depression in the diamond industry which
erupted in the last third of 2008 and lasted throughout 2009. Like the diamond
industry, the situation improved in 2010 (see also CHARACTER). According to
media reports, following the crisis subject’s bankers asked in the beginning of
2009 from subject to lower its credit exposure and Mr. Leviev fueled NIS 400
million and subject was left with US$ 800 million debt to its banks.
Sources in the branch estimated in 2009 Lebiev’s diamond business at US$ 2
– 4 billion.
There are 4 charges for unlimited amounts registered on the company's assets,
in favor of Union Bank of Israel Ltd. and Israel Discount
Bank Ltd. (last charge placed September 2008, prior
charges placed 1997).
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 were US$ 553 million.
2007 sales were US$ 522 million.
2008 sales were US$ 417 million.
2009 sales were US$ 241 million.
2010 sales were US$ 366 million.
Later data not published.
LEVIEV Group whole diamond and jewelry business estimated at US$ 3 billion
per year.
AFRICA ISRAEL INVESTMENTS
LTD., Leviev holds 48.1%, a large holding company with many holdings in Israel
and overseas in various fields (see more CHARACTER). Current market value US$
218.9 million (see more below).
MEMORAND HOLDINGS & INVESTMENTS LTD., holding company via which Lev
Leviev holds AFRICA ISRAEL Group.
AURAMINE, owns and develops gold mines in Russia (extracted 2 million tons
of gold in 2008).
SAMICOR, diamond extracting from the Angola’s Sea.
DIOMONTE FINANCING, 18%, Angola, worlds 4th largest diamond mine
(“Katoka”).
NAMCO, diamond mines in Namibia and South Africa.
MIUZ, Russia, design, manufacture and sale of jewelries, operating via 160
chain stores, mainly in Russia, CIS and Eastern Europe countries, estimated
annual sales US$ 150 million.
OPEN JOINT STOCK COMPANY MOSCOW JEWELRY FACTORY, Russia.
S.H.G., LEVIEV Group is a partner in gold and metals mining in Kyrgyzstan.
Main branch:
Union Bank of Israel Ltd., Ramat Gan Branch (062), Ramat Gan.
Nothing unfavorable learned on subject.
In June 2012 it
was reported that Namibian Diamond Trading Company (NDCT), owned by Namibian
Governmental and DE-BEERS, announced it will cease the supply of rough diamonds
to LLD Group. LLD had a 5-years agreement with the Government, who announced
the license (Sight) is not being renewed due to "not meeting the
requirements". The Namibian polishing and cutting plant, opened in 2004,
known as the largest of its kind in African continent. Consequently, LLD Group
fired all its 150 employees in Namibia and suspended the work in its plant.
Currently, there is a dispute between Lev Leviev and his brother
Moshe Leviev (who served as subject's General Manager until several years ago).
Subject's officials refused to update data.
Lev Leviev is a
well-known veteran diamond dealer and is considered the world’s largest private
diamond dealer with worldwide reputation. According to 'Forbes' World's richest
persons, he is ranked 974th with personal wealth estimated at US$
1.5 billion, making him the 12th in Israel.
In Israel, Leviev
has been one of the leading business figures, via his AFRICA ISRAEL Group,
though his influence fell in the last couple of years – the hit in the real
estate and diamond businesses due to the severe crisis (see below). Yet, thanks
to its reputation and the fact it deals in all the diamond sector chain, LEVIEV
Group managed to cross over the crisis (according to sources in the diamond
branch subject met all liabilities promptly, enjoying the fact that both
customers and suppliers want to work with subject), and the Group’s financial
standing improved also.
In the past Leviev
was a DE BEERS sightholder in South Africa, however following continuous
conflicts he departed and became the largest independent cutter and processor
of diamonds in the world, and the main source of rough diamonds, challenging
the long standing hegemony of DE BEERS and revolutionized the sector. Mr.
Leviev controls many other international companies in the diamond sector, among
them are ASCORP, RUIS DIAM
During 2004 and
2005 Leviev opened, jointly with the local authorities, 2 major plants for
diamonds polishing and cutting in Namibia and in Angola.
Born in Tashkent,
Uzbekistan, Leviev is also strongly involved in the Russian diamond industry
and trade.
Subject has been
the leading largest diamond company in Israel, most of the years by far largest
than others. In the lists of Israel's largest polished diamonds exporters
(published by the Israel Supervisor on Diamonds in the Ministry of Industry and
Trade) until 2010 subject was ranked 1st as Israel's largest
polished diamonds exporter. Since 2011 LLD Group chose to refrain from being
reported in the list (which is the company's own choice).
In 1996 Lev Leviev
took over control in AFRICA ISRAEL INVESTMENTS LTD., publicly traded on the Tel
Aviv Stock Exchange, land developers, building contractors, and also managing
and dealing, through subsidiaries, yielding properties, hotels and resorts,
industries, commerce and agencies. AFRICA ISRAEL Group (AFI) has been one of
the largest concerns in Israel. Other public companies in the AFI Group are
also traded on stock exchanges in Israel and abroad.
AFI was adversely hit by the crisis in world financial and real estate markets,
mainly due to its real estate holdings in Russia and the USA, accumulating huge
losses –with debt in total of NIS 8 billion to the bonds holders and banks.
AFI announced in August 2009 on uncertainty in their ability to meet all
its future obligations, seeking an arrangement with its bonds holders (and
Institutional Investors who hold most of the bonds), which was completed in May
2010 in volume of NIS 7.45 billion (part of the debt erased, a re-schedule for
payments set, and Leviev fueled his own capital (NIS 750 million) though
remained in control). AFI's financial standing improved significantly thanks to
the debt arrangement, as well as recovery in global markets, including the real
estate market in Russia.
In March 2014 it was reported that Leviev purchased the Dutch SIEBEL
Jewelry chain in a sum estimated at several tens NIS millions.
Israel's diamond
industry continued the growth trend in all trade parameters in 2014, after the
impressive growth in 2013 in most parameters, based on the data by Israel's
Diamond Administration (IDA) at the Ministry of Economics: Net export of
polished diamonds rose by 0.6% from 2013, reaching US$6.269 billion (after
rising 11.6% in 2013), and net rough diamond exports totaled US$3.061 billion
in 2014, up 4.2% from 2013 (after a mere rise in 2013). The market has been
volatile over the last years after experiencing its worst depression due to the
global economic crisis, then recovered in 2010 but fell again in 2012. The
recovery in 2013 and 2014 is positive news for the local branch (still away
from its peak on the eve of the crisis with export of polished diamonds of US$
7 billion), however it is reported that profit margins have been decreasing due
to smaller gaps between rough and polished diamond prices (leading the diamond
dealers to search for new rough sources in hope to decrease costs). Overall,
IDA reports that 2014 was tough year for the diamond industry in Israel and
globally.
Net imports of
polished diamonds in 2014 totaled US$4.514 billion, and net import of rough
diamonds totaled US$ 4.022 billion, marking 4.8% and 0.8% increase from 2013,
respectively (in 2013 import was in similar levels to 2012).
The United States
continued to be Israel’s major market for polished diamonds, accounting for
30.8% of the market in 2014 (37% in 2013). Hong Kong is the next largest market
with 29.7% of exports (27% in 2013), with Belgium 8.5%, Switzerland 6.5%, and
U.K. accounting for 3.7% 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 stood on US$ 1.5 billion, down from US$ 2.4 billion in the eve of the
global crisis.
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 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 said 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.
In July 2014 3
indictments were filed to the Tel Aviv District Court against central
defendants in the affair, who provided foreign currency services to the
"underground bank" (not against diamond dealers at this stage), for
felonies of money laundering and tax evasion in volumes of US$ millions.
Good for trade
engagements.
As we wrote in caption, David Leviev
is a salaried employee in subject, and is not involved in any other business.
As to the address, he, as part of subject, operate only from the caption
address in Noam Bldg., 23 Tuval St., and has no connection to Maccabi Bldg., 3
Jabotinski St. (the address you provided).
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.61.94 |
|
|
1 |
Rs.96.24 |
|
Euro |
1 |
Rs.70.39 |
INFORMATION DETAILS
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Analysis Done by
: |
SUB |
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Report Prepared
by : |
ANK |
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.