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Report No. : |
341631 |
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Report Date : |
24.09.2015 |
IDENTIFICATION DETAILS
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Name : |
CARMEL HOLDINGS (I.L) LTD. |
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Registered Office : |
2 Haetzel Street, New Industrial Zone, Rishon Le-Zion 7570604 |
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Country : |
Israel |
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Financials (as on) : |
31.12.2014 |
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Date of Incorporation : |
01.01.1991 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Subject operates as manufacturers,
importers, marketers and retailers of furniture, lighting elements, home
textile and household goods. Also manufacturers, marketers and exporters carpets, rugs and parquets. |
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No. of Employees : |
621 |
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) |
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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 |
CARMEL HOLDINGS
(I.L) LTD.
(Also known as: BETILI)
Telephone 972 3 908 19 00
Fax
972 3 936 50 05
2 Haetzel Street
New Industrial
Zone
Rishon Le-Zion 7570604 Israel
Originally
established as a private limited company, incorporated as per
No. 51-153506-4 on
the 01.01.1991.
Company took over
the business activities of HAIM EITANI CARMEL CARPET, established in 1960.
In 1994 subject
purchased the assets of CARMEL CARPETS.
Converted into a
public limited company and registered as such as per file No. 52-004319-1 on
the 19.05.1997. In June 1997 published a prospectus offering shares to the
public in the Tel Aviv Stock Exchange (TASE).
On the 22.01.2014
subject's shares were delisted from trade on the Tel Aviv Stock Exchange due to
not meeting preservation rules of the stock exchange statute (yet still a
public company, as the public still holds shares).
On the 29.06.2015,
following the completion of the acquisition of all shares held by the public,
converted into a private limited company (keeping same registration No.).
On the 30.06.2015
subject completed the redemption of all bonds.
Originally
registered under the name BETILI LTD., which changed to the present name on the
01.07.2004.
Authorized share
capital NIS 100,000,000.00, divided into -
100,000,000
ordinary shares of NIS 1.00 each,
of which
13,103,843 shares amounting to NIS 13,103,843.00 were issued.
Subject is fully
controlled by Eitani Family, namely Aviv Eitani, Ofer Eitani and Haim Eitani.
Subject was
publicly traded, and following the successful tender offer for its shares held
by the public (as above) and the purchase of the shares (14.6%) in February
2015 held by NORSTAR HOLDINGS INC. for NIS 7 million (held shares in subject
since 2005), Eitani family practically reached full control (we estimate close
to 100%, perhaps entirely 100%).
1. Haim Eitani, Chairman,
2. Ofer Eitani, General Manager,
3. Aviv Eitani,
4. Shlomo Perets.
Known also as BETILI Group, directly and
through its subsidiaries, operate as manufacturers, importers, marketers and retailers
of furniture, lighting elements, home textile and household goods. Also
manufacturers, marketers and exporters carpets, rugs and
parquets.
Sales of floor coverings carried out via “Carmel Carpets & parquets” chain store of 18 branches (4 operated directly and rest
via concessionaires), as well as floor covering departments inside retail
chains Home Center (12 points), Betili (9), IDdesign (3) and "Carmel Home
Design" store in Sgula Industrial Zone, Petach Tikva.
33% of Group's
Floor Covering segment sales are export, mainly to the USA and Europe.
Import and sales of furniture and allied
goods (including floor coverings) are via 50.5% owned E.F. DESIGN LP retail
chains: "Betili" (14 stores), "IDdesign" (4 stores),
"Rich and Taylor" (2 stores). In addition, also operate "My Home
Page" (16 stores and via the Internet, focusing on young audience), and
run a store under the name “Hazorea Furniture Center”. Marketing is also via
other channels, including to hotels, contractors, workers' unions, etc.
Among local
suppliers: SHAUL SCHECHTER UPHOLSTERY, NIRLAT.
Operating from main offices in rented
premises, on an area of 1,200 sq. meters in 2, Haetzel Street, New Industrial
Zone, Rishon Le-Zion, and from:
1. A plant, on an area of 8,500
sq. meters, in Shaked Industrial Zone (or Shahak Industrial Park), owned by the
shareholders,
2. Logistic
center in Western Ariel Industrial Zone, Ariel, on total area of 30,000 sq.
meters, half owned half rented,
3. Main “Carmel Carpets” store, on an owned area of 300 sq. meters, in Bnei Brak, owned by the
shareholders,
4. Retail
stores countrywide, all rented.
Having 621
employees serving subject's Group, of which 247 employees in the floor covering
branches, rest in the furniture sector.
Consolidated B/S shows (last obtainable):
NIS
(thousands)
31.12.2014 31.03.2015
ASSETS
Current assets
Cash
and cash equivalents 4,778 7,478
Customers 79,307 73,208
Other accounts receivable 8,955 16,078
Stock 84,071 83,405
177,111 180,169
Non-current assets
Fixed assets (net) 36,593 35,463
Other non-current assets 17,306 17,164
53,899 52,627
231,010 232,796
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LIABILITIES
Current liabilities 135,298 136,827
Non-current
liabilities 23,660 28,557
Equity 72,052
67,412
231,010 232,796
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In December 2005, subject completed a NIS 50 million capital raise in a
public offering of convertible bonds.
During
2007 – 2009 subject experienced financial distress due to the entanglement of
its Turkish subsidiary (see more CHARACTER).
There are 13
charges for unlimited amounts registered on the company's assets (financial
assets, equipment and vehicles), in favor of Bank Leumi Le’Israel Ltd., Bank
Hapoalim Ltd., Mercantile Discount Bank Ltd and companies (last charge placed
February 2015, prior charge placed 2003).
Consolidated
Statement of Income
NIS
(thousands)
Year
ended on the 31.12
2012 2013 2014
Revenues 132,260 235,692 326,054
Gross profit 47,585 97,100 147,412
Operating income 7,335 9,937 11,961
Income before
income taxes 7,762 6,772 10,083
Net profit 3,837 7,808 10,001
======= ======= =======
The rise in 2013 and 2014 sales is due to
the inclusion of the results of subject, after purchasing 1% in 2013 from its partner
(see CHARACTER).
CARMEL HOLDINGS (I.L) LTD. consolidated revenues
for the first 3 months of 2015 were NIS 88,046,000 (3% increase compared to the
parallel period in 2014), making a gross profit of NIS 39,316,000, an operating
income of NIS 4,600,000, and a net income of NIS 4,250,000.
IKOO DESIGNS LTD.,
100%, furniture manufacturing, holds 50.5% of E.F. DESIGN LP (EFD), operates
Group's furniture chains stores. Also importers and marketers of furniture,
household products, lighting elements, home textile goods, etc. and E.F. HOME DESIGNS LTD., 50%, management
company for the Group's chains.
CAESAREA CARPETS
(97) LTD. (known as CARMEL CARPETS), 100%, manufacturers,
importers, marketers and exporters of woven and wall-to-wall carpets,
concentrates Group's institutional sales activities in the floor covering
field to retail chains, owns SHAKED CARPETS LTD., 50%, floor covering importers
and marketers, mainly parquets, HIGH SYSTEM OFFICE
FURNITURE LTD., 100%, marketing office furniture for the institutional market,
and CARMEL
SPORT PLATFORMS LTD., 75%, marketers of sport activity platforms.
CARMEL FLOOR
DESIGN LTD., in charge of the sales of floor covering to the domestic market.
ZIEGLER
INVESTMENTS LTD., 100%, investments and real estate, holds 50% of ZIEGLER VILAR
ARIEL WEST PARTNERSHIP, holds real estate in Ariel.
Eitani family also
owns, among other companies:
HAIM EITANI
HOLDINGS LTD.
PACIFLORA HOLDINGS LTD., owned by Ofer Eitani, holds 33.33% of UNITED
SEATS LTD., garden furniture manufacturers and marketers.
NATZRANIT HOLDINGS LTD., fully owned by Aviv
Eitani, owns 33.33% of EAGLE FORKLIFTS AND LOGISTICS LTD., (additional 33.33%
owned by PACIFLORA HOLDINGS), importers and
marketers of forklifts. Also have holdings in real estate ventures.
Bank Leumi Le’Israel Ltd., Rishon Le-Zion Business Branch (No. 671),
Rishon Le-Zion, account No. 35000/16.
A check with the Central Banks' database did
not reveal anything detrimental on subject’s a/m account.
Mercantile
Discount Bank Ltd., Main Business Branch (No. 720), Tel Aviv.
Nothing
unfavorable learnt.
It should be mentioned that during 2007 – 2009 subject went through a financial
crisis mainly due to the Turkish subsidiary GAYA affair. In May 2006
subject acquired 50.1% of the veteran and large carpet plant ATLAS in Turkey
and formed GAYA INTERNATIONAL. Subject signed the deal with the Turkish family
Cetinkaya, owners of ATLAS that will market the new plant products. During 2007
the venture encountered heavy financial difficulties, due to market conditions
and an internal fraud (reached accumulated deficit of over NIS 20 million, and
irregularities committed by the Turkish senior managers in volume of NIS 8.5
million). GAYA shut down its offices and manufacturing lines by November 2007,
and dismissed all workers. In April 2009 the Court in Turkey declared as GAYA
insolvent and currently GAYA is under receivership.
In the financial statements for the 2nd
& 3rd quarters of 2008 subject had a “going concern” warning in
its accountants financial statements, due to the affair.
Following
the financial distress subject announced it had no available means to pay its
bonds holders. In December 2008 subject reached a settlement agreement with its
bonds holders, to redeem the debts paying a discount of just more than a half
of the actual value (some NIS 56 million), converting some of the bonds into
shares and postponement of payments.
According
to the arrangement, controlling shareholders fueled NIS 8 million (Eitani
family and NORSTAR) and subject was given NIS 5 million bank loan. The
settlement was approved by Court on 12.03.2009 and came into force. In
practice, the settlement allowed subject to continue normal operation.
Since the bonds holders settlement agreement in March 2009 condition
improved significantly.
In April 2009 subject made a partial bonds redemption of NIS 14 million
and further redemption on 31.12.2009. Subject also made self purchase of bonds.
Due to not meeting
the Stock Exchange tradability rules, in February 2009 subject’s shares moved
to be traded on the low-tradability list and in February 2010 moved to the
preservation list. In January 2011 shares were re-transferred to the main list
(yet in the low-tradability list), and in January 2012 shares were
re-transferred to the preservation list. On the 22.01.2014 subject's shares
were delisted from trade due to not meeting preservation rules of the stock
exchange statute.
On the 14.01.2015
the Tel Aviv District Court approved an arrangement in which subject will
acquire all shares held by the public, and on the 29.06.2015 the acquisition of
shares from the public was completed, subject ceasing to be a public company.
Subject is a
leading company in their fields. Both “Betili” and “Carmel Carpets” chains are
leading and well-familiar brands in their fields. CARMEL HOLDINGS estimates its
market in the floor covering branch share at 20%."Carmel Carpets"
logo is the most recognized carpets brand in the local market.
Subject estimates
its market share of the home furniture sector at circa 7%. The whole market
comprises of 15 large chain stores and hundreds of retail stores.
As part of a restructure in the subject’s Group, on the 01.01.2011 CARMEL FLOOR
DESIGN assumed all of the sales of floor covering to the domestic market, from
subject and CAESAREA CARPETS (97) LTD. (which is in charge of the
Group's floor covering sales for the institutional market).
In 2001 CARMEL CARPETS acquired SHOMRON CARPETS, for a sum of
US$ 800,000 after SHOMRON CARPETS stumbled over financial difficulties.
In 2003 Eitani
family, founders of "Betili" chain, joined forces with Eliezer
Fishman Group, founders of "IDesign" Chain, establishing a new
partnership – E.F. DESIGN, equally owned, becoming jointly the largest
furniture chain in Israel.
In October 2006,
CARMEL CARPETS, opened 12 points of sale ("store within store") in
FISHMAN Group's HOME CENTER branches, local largest DIY chain spread
countrywide, replacing a previous franchise.
Subject acquired in
In December 2008, it was reported that subject and subsidiary CARMEL,
received the exclusivity for German parquet manufacturer EGGER for marketing it
in Israel. Subject is also investing in penetration the local wallpaper niche.
In February 2009, BETILI Group opened 3 new retail stores as part of a
new furniture chain targeted at the young audience and “low budget”, called “My
Home Page”. Initial investment was NIS 1 million.
In May 2009 it was
reported that CARMEL CARPETS entered the artificial grass niche with a new
retail store in Ilanot Junction, with an investment of NIS 500,000. The
artificial grass market is estimated at NIS 10 million per year.
In February 2012
it was reported that CARMEL CARPETS closed export orders in value of NIS 40
million in the Domotex Exhibition in Germany.
In December 2012
it was reported that subject received the exclusive representation of ASHLEY, a
USA bed mattress manufacturer, and enter this field, via sales under its 'Rich
& Taylor' brand.
The local
mattresses and youth couches market is valued at NIS 0.5 billion per annum and
is characterized by fierce competition. Some 50% of the mattresses are branded.
During 2013 3rdQ,
CARMEL HOLDINGS acquired an additional 1% of E.F. DESIGNS L.P, which operates
Group's furniture chains stores, from FISHMAN Group (till then equally held the
partnership), reaching a 50.5% holding. As a result, E.F. DESIGN's financial
data is included in subject's consolidated data.
In February 2014
subject reported it meets the qualification of 'small corporation' status
according to the Securities regulations, giving subject relieves in its
quarterly financial statements (concise executive declarations, consolidation
of companies from 40% and up, and other certain exemptions). Subject will
implement these relieves as of 2013 annual report.
The local floor covers market (carpets, rugs, wall-to-wall carpets,
parquets floor) is estimated well over at US$ 100 million per annum.
Based on media
reports, turnover of the local furniture and allied accessories was valued in
2012 at NIS 9 billion.
In another later
market survey, the estimated revenues of the furniture branch in 2013 reached
NIS 6.6 billion, 3% rise from 2012 (it is possible that the recent survey did
not include allied accessories, hence the gap in data). Revenues were divided
to NIS 1.6 billion of furniture from import and NIS 5 billion is from local
manufacturing. Main countries from which import is made are China and Italy.
In Israel there
are some 2,300 furniture retail stores. According to a survey in 2011,
customers prefer mostly carpenters and small shops (65%), and large retail
chains (35%, over 8% of which by DIY chain IKEA).
The local furniture
branch is
considered to be in relatively high risk branch.
The Wood &
Furniture Manufacturing and Wholesale branches suffer from relatively poor
payment schedule and delays.
Import of Wood and its Products raw
materials in 2014 summed up to NIS 2,160 million, representing 1% increase from
2013 (2% rise in $ terms) and continuing the positive trend from 2013, when
import climbed 8.8% from 2012 (was higher in terms), according to the Central
Bureau of Statistics (CBS). That is after in 2012 import level remained
stagnant from 2011, reflecting the weakness of the local and international
markets had its impact on the local wood industry (furniture, construction and
others). The upward trend in import continued into the first 5 months of 2015
with 2.5% rise, compared to the parallel period in 2014.
Export of furniture (excl. plastic
furniture) summed up to US$ 18 million.
According to CBS
data, investments by the Wood & Furniture manufacturing industries in
imported machinery & equipment in 2014 reached NIS 169.6 million, which
represents 24.5% increase from 2013 (in 2013 a 10% increase was noted, after
22.4% decrease in 2012).
According to Central Bureau
of Statistics (CBS), import of consumer goods in 2014 marked 8% increase (in NIS
terms), compared to 2.2% increase in 2013, and by 2% in 2012. A breakdown shows
a 9.8% rise in 2014 in durable goods, while import in non-durable goods rose by
6.8%.
In the first 7 months of 2015 import of
consumer goods rose by 6% compared to the parallel period in 2014 (rose 6% in
durable goods, rose 5.6% in non-durable goods).
Import of Furniture and Electrical Equipment
totaled NIS 10,946 million in 2014, marking a modest 1.2% increase (in NIS
terms, rose by 2.2% in $ terms), though better than the 3.6% decrease in 2013
from 2012. In the first 7 months of 2015 import rate showed a 12% increase
compared to the parallel period in 2014.
According to the Tax Authority data, in 2014
there was generally a decrease in the import of domestic electrical appliances
(after mixed trend in 2013).
From the CBS
National Accounts for 2014 on private consumption expenditure, it turns that
the current local households' expenditure (in fixed prices) grew by 4% from
2013, after rising by 3.3% in 2013 and by 3.1% in 2012. Per-capita expenditure
in 2014 rose by 2% (after rise of 1.4% in 2013 and 1.2% in 2012).
Consumption
expenditure by households on durable goods rose by 12.3% from 2013 (after 3.8%
rise in 2013). A breakdown shows that expenditure on furniture and jewelry rose by 7.3% (3.5% in 2013), whereas in
electric appliances and other equipment the increase was lower – by 4.2%
(though fell 0.6% in 2013).
Per-capita
expenditure on durable goods in 2014 showed 10.2% (1.9% in 2013), in which
purchase of electrical appliances (refrigerators, air-conditioners, washing
machines, etc.) rose by 2.3%, and furniture & jewelry purchase rose by 5.3%
per capita.
Good for trade engagements.
Maximum unsecured credit recommended US$ 500,000.
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).
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
|
US Dollar |
1 |
Rs.65.97 |
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|
1 |
Rs.101.19 |
|
Euro |
1 |
Rs.73.37 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared
by : |
TPT |
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.