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Report No. : |
324287 |
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Report Date : |
26.05.2015 |
IDENTIFICATION DETAILS
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Name : |
SALANT GROUP 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 : |
08.05.1986 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Importers, traders of rough diamonds, polishers, exporters, marketers and
international dealers in diamonds. |
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No. of Employees : |
45 employees |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Unknown |
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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) |
|
Israel |
A2 |
A2 |
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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 |
SALANT GROUP LTD.
Telephone 972 3 575 01 29
Fax 972 3 613 89 42
21 Tuval Street
Diamond Exchange, Yahalom Bldg.
RAMAT GAN 5252236 ISRAEL
A private limited company,
incorporated as per file No. 51-112105-5 on the 08.05.1986, as a joint venture
between 2 veteran diamond dealers:
1. Salant family business for
diamond polishing and trade, originally founded by the late Moshe Salant in
1952.
2. ALPHA, diamond purchasing
wholesaler founded by the late Zvi Rimer (who worked jointly with U.S. diamond
company FABRIKANT).
Originally
registered under the name FABSAL DIAM
Following the
departure of the FABRIKANT Group name was changed to the present one on the
08.11.2006.
Authorized share
capital NIS 2,000.00, divided into:
1,950 ordinary shares
(1,620 shares issued),
50 deferred shares
(issued), all of NIS 1.00 each, of which shares amounting to NIS 1,670.00 were
issued.
1. Avner Salant, 50% of ordinary shares,
2. Igal Salant, 50% of ordinary shares,
3. SALANT DIAM
Subject itself is
also registered as a shareholder.
In October 2006
the Salant Brothers (Igal and Avner) acquired all of the FABRIKANT Group shares
in subject (after the FABRIKANT Group of the USA encountered financial
difficulties).
1. Igal Salant, co-Chairman,
2. Avner Salant, co-Chairman.
Tamir Osif.
Importers, traders of rough diamonds, polishers, exporters, marketers and international
dealers in diamonds.
Over 80% of sales are for export.
Among suppliers: STEINMETZ Group.
Operating from
rented offices premises, in 21 Tuval Street (formerly 54 Bezalel Street),
Diamond Exchange, Yahalom Building (5th floor), Ramat Gan. Also
operating from polishing plants in USA, China, India, Thailand and South
Africa.
Having 45 employees of which 15 in Israel (had 105 employees, of which 30
in Israel in mid 2013).
Subject's General Manager informed us that employee decrease is due to decreasing
activities, being more cautious in business relations.
Financial data not forthcoming, however known to be financially solid.
Subject has been a Sightholder from DCT since 1990.
There are 4 charges for unlimited amounts registered on the company’s
assets (financial assets abnd fixed assets), in favor of Israel Discount
Bank Ltd. and Mizrahi Tefahot Bank Ltd. (last 2 charges placed January 2014,
prior charges placed 2000 and 1998).
2006 sales were US$ 180,000,000, almost 100% for export almost 100% for
export, of which net exported polished diamonds were U$ 95,000,000.
2007 sales were US$ 150,000,000, almost 100% for export.
2008 sales were US$ 100,000,000, almost 100% for export.
Later sales
figures not forthcoming.
OVERSEAS DIRECT
INC., 100%, USA subsidiary.
During 2012 Salant
family sold its holdings (51%) in MASINGITA LTD., diamond dealers.
Subject's
shareholders, Salant brothers, have other holdings.
Israel Discount
Bank Ltd., Diamond Exchange Branch (No. 080), Ramat Gan.
Nothing unfavorable learned.
Subject's General Manager refused to disclose financial data.
Subject is well known, among the leading Israeli diamond companies. Salant
Brothers enjoy very good reputation.
In October 1998,
it was reported that subject won an “exceptional exporter” award for 1997.
According to the
report published by the Israel Supervisor on Diamonds in the Ministry of
Industry and Trade, subject was ranked 9th in the 2006 list of Israel's largest
polished diamonds exporters. 2005 ranking as 4th largest, was while
still partnered with FABRIKANT. It should be noted that subject refrains from
being reported in the Israel Supervisor on Diamonds top exporters list (which
is its prerogative).
In June 2006 it
was reported that subject's former shareholder, FABRIKANT Group, which was
considered as one of the world's largest diamonds and jewelries companies, is
on the verge of a collapse, mainly due to the crisis in the diamonds branch in
the world at that time.
Subject's owner
and joint General Manager, Mr. Avner Salant, was quoted to say that subject is
financially solid, with an independent cash flow in Israel, enjoying good
reputation with no debts in the local market, meeting all its obligations
properly and paying almost on everything in cash.
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 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
refusal to disclose financial data, considered good for trade engagements.
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
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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.63.62 |
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|
1 |
Rs.96.51 |
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Euro |
1 |
Rs.69.93 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared by
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ANK |
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.