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Report No. : |
324240 |
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Report Date : |
01.06.2015 |
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IDENTIFICATION DETAILS
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Name : |
ANDRE MESSIKA LTD. |
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Registered Office : |
21 Tuval Street Diamond Exchange,
Yahalom Bldg. Ramat Gan 5252236 |
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Country : |
Israel |
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Date of Incorporation : |
1972 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Traders, processors, importers, marketers and exporters of large
diamonds, rough and polished. |
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No. of Employee : |
15 employees |
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 |
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 |
ANDRE MESSIKA LTD.
Telephone 972 3 751 06 23;
612 88 72
Fax 972 3 612 88 22
21 Tuval Street Diamond Exchange,
Yahalom Bldg. RAMAT GAN 5252236 ISRAEL
A private limited company, incorporated as per file No. 51-345768-9 on
the 22.09.2003, continuing diamond business activities which started in 1972.
Originally registered under the name B.L.I.D. INTERNATIONAL LTD., which
changed to the present name on the 18.01.2011.
Authorized share capital of NIS 50,000.00, divided into -
50,000 ordinary shares
of NIS 1.00 each,
of which 100 shares amounting to NIS 100.00 were issued.
Subject is fully owned by ANDRECO LTD., a local private limited company,
owned by Andre Messika.
Yaacov (Kobi) Amir
Traders, processors, importers, marketers and exporters of large
diamonds, rough and polished.
77% of sales are for export (74% in 2014, 80% in 2013).
Subject is a wholesale diamond supplier to jewellery houses and a
wholesale jewellery manufacturers and retailers with outlets in Europe, such as
Gallery Lafayette.
Among local clients: M.I.D. HOUSE OF DIAM
Operating from owned office premises, on an area of 280 sq. meters, in
21 Tuval Street (also referred to as 54 Bezalel Street), Diamond Exchange,
Yahalom Building (25th floor), Ramat Gan. Also operate from offices
in Paris.
Having 15 employees (similar to the last previous years).
Owned property in Yahalom Building, Diamond Exchange (where subject is
operating from) is valued at US$ 2.3 million.
Other financial data not forthcoming.
There are 5 charges for unlimited amounts registered on the company's
assets, in favor of The First International Bank of Israel Ltd., Union Bank of
Israel Ltd. and Israel Discount Bank Ltd. Charges placed in 2003, 2004, 2011
and latest in August 2013, on all the company's assets.
2009 sales were US$ 55,000,000, of which some 50% were for export.
2010 sales were US$ 90,000,000, of which 43% were for export.
2011 sales were US$ 160,000,000, of which 50% were for export.
2012 sales were US$ 113,000,000, of which 73% were for export.
2013 sales were US$ 125,000,000, of which 80% were for export.
2014 sales were US$ 130,000,000, of which 74% were for export.
Sales for the first 4 months of 2015 were US$ 43,000,000, 77% for export.
ANDRECO LTD., a holding company.
B.L.I.D. JEWELRY LTD., non-active.
The First International Bank of Israel Ltd., Diamond Exchange Branch
(No. 026), Ramat Gan.
Israel Discount Bank Ltd., Diamond Exchange Branch (No. 080), Ramat Gan.
Nothing unfavorable learned.
Subject is a relatively large and well-known diamond company.
Andre Messika is respectful businessman, veteran diamond merchant
(operating mainly from France), also involved in other investments, including
his partnership in investment firm CORONIS PARTNERS.
According to the report published by the Israel Supervisor on Diamonds
in the Ministry of Industry and Trade, subject was ranked 5th in the
2014 list of Israel's largest polished diamonds exporters, after being ranked 6th
in 2013 list, and 8th
both in 2011 and 2012 lists.
In December 2013 subject received Israel’s ‘Outstanding Exporter’ award
for 2012 awarded by the Ministry of Economics, in an official ceremony at the
residence of the President of Israel, Shimon Peres.
In February 2010 it was reported that vertically integrated diamond
mining company NAMAKWA DIAMONDS signed a cooperation agreement with subject,
for a regular supply of diamonds from southern Africa to subject.
In the end of March 2011 it was reported that 4 diamonds in value of
several million Dollars were stolen from subject's display window while a
leading jewelry exhibition in Basel, Switzerland. The thieves stole the
diamonds while their accomplices distracted the presenters, and managed to
disappear, as the merchants realized the diamonds are gone too late.
In 2012, subject became a RJC member (Responsible Jewellery Council).
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.
The data published for the first quarter of 2015 (compared to the
parallel period in 2014) points on a negative reverse trend in all parameters:
Net export of polished diamonds plunged by close to 30% from the 1stQ
2014, reaching US$1,610 million, and net rough diamond exports decreased by
23%, totaled US$ 694 million. Net imports of polished diamonds fell by 12%,
reaching US$ 904 million, while net import of rough diamonds fell 18% totaling
US$ 827 million.
The United States continued to be Israel’s major market for polished
diamonds, accounting for 39% of the market in the 1stQ 2015 (31% in 2014). Hong
Kong is 2nd largest market with 33% of exports (30% in 2014), then
Switzerland 13%, Belgium 7%, and U.K. accounting for 2% 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.
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
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Currency |
Unit
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Indian Rupees |
|
US Dollar |
1 |
Rs.63.76 |
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|
1 |
Rs.97.80 |
|
Euro |
1 |
Rs.69.91 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared by
: |
SDA |
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.