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Report No. : |
326670 |
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Report Date : |
11.06.2015 |
IDENTIFICATION DETAILS
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Name : |
PENFORD (ISRAEL) LTD. |
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Registered Office : |
21 Tuval Street, Diamond Exchange, Yahalom Bldg. P.O. Box 3008 (5213001) Ramat Gan 5252236 |
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Country : |
Israel |
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Date of Incorporation : |
02.07.1980 |
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Com. Reg. No.: |
51-085590-1 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Traders, importers, exporters and marketers of diamonds (mainly rough). |
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No. of Employees : |
15 (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
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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 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
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Source
: CIA |
PENFORD (ISRAEL) LTD.
P.O. Box 3008 (5213001)
21 Tuval Street
Diamond Exchange, Yahalom Bldg.
RAMAT GAN 5252236 ISRAEL
Telephone 972 3 575 01 74
Fax 972 3 575 29 56
A private limited company, incorporated as per file No. 51-085590-1 on the
02.07.1980, as part of the global Steinmetz Family diamond businesses founded
in 1949.
* Note: Registered Latin name is "PANFORD (ISRAEL) LTD.",
although subject's officials confirmed correct spelling is "PENFORD".
Authorized share capital NIS 200,000.00, divided into -
‘200,000 ordinary shares of NIS 1.00 each, of which 171,550 shares amounting
to NIS 171,550.00 were issued.
1. PENFORD (L
2. Daniel Steinmetz, 16%.
In the past,
subject was known to be owned by part of STEINMETZ Diamond Group (hereinafter
SDG), owned by Steinmetz family, including brothers Benny Steinmetz and Daniel
Steinmetz. Based on media reports there were changes in the group's structure,
including recently where Benny Steinmetz sold his part (37.5%) in SDG to Daniel
Steinmetz who now holds 75%, and Nir Livnat holds the remaining 25% in SDG. We
were informed by subject's officials that SDG is currently in liquidation
procedures, however they refused to elaborate any further on matter. To-date,
subject is part of DIACORE Group.
Daniel Steinmetz
David (Dudi) Shiama (also manages Group's diamond operations in Israel).
Traders, importers, exporters and marketers of diamonds (mainly rough).
Operating from office
premises, owned by the shareholders, on a large area of several hundred sq.
meters, in 21 Tuval Street (also referred to as 54 Bezalel Street), Yahalom
Building (28th Floor), Diamond Exchange, Ramat Gan (shares premises
with sister companies of the Group).
We were informed that some years ago the Group sold the 500 sq. meters on
the 17th Floor and purchased new offices, area of 1,000 sq. meters
on the 28th Floor.
DIACOR Group is operating from headquarters in Geneva, Switzerland, and
subsidiaries in several countries, including manufacturing facilities in
Botswana, South Africa, Namibia and New York.
Having 15 employees, as of mid 2014 (same as in the last previous years).
Current number of employees unavailable, believed to be similar.
Having around 1,500 employees in DIACOR Group worldwide.
Financial data not forthcoming, known to be financially solid.
Affiliate DIACOR INTERNATIONAL LTD., which is part of DIACORE Group, has been a DCT Sightholder for many years.
There are 2 charges for unlimited amounts registered on the company's
assets, in favor of The First International Bank of Israel Ltd. (charges were placed in 2003 and in 2005).
Sales figures not forthcoming, known to be in scales of over hundred US$
million and much more.
DIACORE Group
includes:
PENFORD (L
DIACOR
INTERNATIONAL LTD., Switzerland,
ASCOT DIAMONDS (ISRAEL) LTD., processors and polishers, traders, importers,
exporters and marketers of cut diamonds. Operate on relatively very low level.
DIACORE BELGIUM
N.V., Belgium,
ASCOT DIAMONDS NV,
Belgium,
DIACOR MARKETING
LTD., U.K.,
DORSET DIAMONDS
INC., USA,
DIACORE BOTSWANA,
Botswana,
ASCOT DIAMONDS (PTY) LTD., South Africa,
DIACORE INDIA PVT
LTD., India,
NAMCOT DIAMONDS
(PROPRIETARY) LTD., Namibia,
EVERIDGE DMCC, Dubai U.A.E.
The First
International Bank of Israel Ltd., Diamond Exchange Branch (No. 026), Ramat
Gan.
Nothing unfavorable learned.
Despite our efforts, we were unable to speak with subject's officials,
as they were always unavailable. We left messages which so far remain
unanswered.
In the past interviews, subject's officials refused to disclose financial
data.
DIACORE Group is a
multinational group, one of the world’s largest diamond miners, with wide
operations in South Africa, Namibia, and other African countries. The Group has
also large manufacturing and retail operations, specializing in large, fancy
colored and rare stones.
Steinmetz family
is affluent, with many other holdings, including real estate.
DIACOR is reported to be purchasing diamonds from De Beers in volumes of US$
30-US$ 50 million per annum, making them one of De Beers most important and
largest clients.
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.
Notwithstanding the
lack of updated data from subject's officials, considered good for trade engagements.
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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.63.88 |
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|
1 |
Rs.98.47 |
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Euro |
1 |
Rs.72.14 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared
by : |
DPT |
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.