|
|
|
MIRA INFORM REPORT
|
Report No. : |
504518 |
|
Report Date : |
19.04.2018 |
IDENTIFICATION DETAILS
|
Name : |
|
|
|
|
|
Formerly Known As : |
UNITED STEEL
COMPANY BSC (SULB) |
|
|
|
|
Registered Office : |
Hidd Industrial Area, Building 277, Road 17, Block 117, P O Box: 50177, Hidd |
|
|
|
|
Country : |
Bahrain |
|
|
|
|
Financials (as on) : |
31.12.2017 |
|
|
|
|
Date of Incorporation : |
12.02.2009
(Production Began on 01.08.2013) |
|
|
|
|
Com. Reg. No.: |
71012-1, Manama |
|
|
|
|
Legal Form : |
Bahraini
Shareholding Company Closed - BSCC |
|
|
|
|
Line of Business : |
Manufacture of
steel and steel products, including H beams, angles, sections for high rise
buildings, bridges and other structural steel uses. |
|
|
|
|
No. of Employees : |
150 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
|
MIRA’s Rating : |
A+ |
|
Credit Rating |
Explanation |
Rating Comments |
|
A+ |
Low Risk |
Business dealings permissible with low
risk of default |
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
No Complaints |
|
|
|
|
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
|
Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
|
Bahrain |
A2 |
A2 |
|
Risk Category |
ECGC Classification |
|
Insignificant |
A1 |
|
Low Risk |
A2 |
|
Moderately Low Risk |
B1 |
|
Moderate Risk |
B2 |
|
Moderately High Risk |
C1 |
|
High Risk |
C2 |
|
Very High Risk |
D |
BAHRAIN - ECONOMIC OVERVIEW
Low oil prices have generated a budget deficit of at least a $4 billion deficit in 2016, nearly 14% of GDP. Bahrain has few options for covering this deficit, with meager foreign assets and fewer oil resources compared to its GCC neighbors. In 2016 the three major US credit agencies downgraded Bahrain’s sovereign debt rating to “junk” status, citing persistently low oil prices and the government’s inability to more effectively cut spending. Nevertheless, Bahrain in 2017 was able to raise about $3 billion by issuing international debt.
Oil comprises 86% of Bahraini budget revenues, despite past efforts to diversify its economy and to build communication and transport facilities for multinational firms with business in the Gulf. As part of its diversification plans, Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006, the first FTA between the US and a Gulf state.
Other major economic activities are production of aluminum - Bahrain's second biggest export after oil - finance, and construction. Bahrain continues to seek new natural gas supplies as feedstock to support its expanding petrochemical and aluminum industries.
In 2011, Bahrain experienced economic setbacks as a result of domestic unrest driven by the majority Shia population; however, the economy recovered in 2012-15, partly as a result of improved tourism. In addition to addressing its current fiscal woes, Bahraini authorities face the long-term challenge of boosting Bahrain’s regional competitiveness — especially regarding industry, finance, and tourism — and reconciling revenue constraints with popular pressure to maintain generous state subsidies and a large public sector. Since 2015, the government lifted subsidies on meat, diesel, kerosene, and gasoline and announced new higher prices for electricity and water, although it plans to roll these increases out more gradually than previous subsidy cuts.
|
Source
: CIA |
SUMMARY
Company Name : SULB
COMPANY BSC CLOSED
Previously Known As : UNITED STEEL
COMPANY BSC (SULB)
Country of Origin : Bahrain
Legal Form :
Bahraini Shareholding Company Closed - BSCC
Registration Date : 12th
February 2009
Commercial
Registration Number : 71012-1,
Manama
Issued Capital : US$
705,000,000
Paid up Capital : US$
705,000,000
Total Workforce : 150
Activities :
Manufacturers of steel and steel products
Financial Condition : Good
Payments :
No Complaints
COMPANY
NAME
SULB COMPANY BSC
CLOSED
ADDRESS
Registered & Physical
Address
Location : Hidd Industrial Area, Building 277, Road 17,
Block 117
PO Box : 50177
Town : Hidd
Country : Bahrain
Telephone : (973-17) 359331 / 359359 /
464380 / 464307 / 464222 / 464138 / 352402 / 464233
Facsimile : (973-17) 359331 / 673364
Mobile : (973-39) 992556 / 074859 /
161610
Email : delip.geoege@foulath.com.bh
/ info@sulb.com
Premises
Subject operates
from a large suite of offices and a factory that are rented and located in the
Industrial Area of Hidd.
KEY
PRINCIPALS
Name Nationality Position
·
Faisal
H Y H Al Roomi Kuwaiti Chairman
·
Khaled Salem A S Alsabah Kuwaiti Director
·
Kazuhiro
Tsukamoto Japanese Director
· Mikio Kobayashi Japanese Director
· Takafumi
Yoshida Japanese Director
· Yousef Abdulla
A Q Al Emadi Qatari Director
· Nasser Al Muktash - General
Manager
·
Vani Marlerati - Project
Manager
·
Mohamed Siddiqi - Production
Manager
·
Roddy
Clayton - Marketing
Manager
·
Delip George - Finance
Manager
·
Abisheikh Bhandari - Financial
Controller
·
Katsumasa Kohata - Chief
Technical Officer
·
Nasri Al Muktash - Deputy
Chief Technical Officer
·
Ian David Evans - Operations
Manager
·
Gabe Kobayashi - Sales
Manager
·
Gottfried Fuerthner - Logistics
Manager
LEGAL
FORM & OWNERS
Date of Establishment : 12th
February 2009 (Production began on 1st August 2013)
History : Subject was originally established in 2009 under
the name of “United Steel Company BSC (SULB)”. However, on 9th May
2013 the company re-registered under the current style of “Sulb Company BSC Closed”
Legal Form :
Bahraini Shareholding
Company Closed - BSCC
Commercial Reg. No. : 71012-1,
Manama
Issued Capital : US$ 705,000,000
Paid up Capital : US$ 705,000,000
Name of Shareholder (s) Percentage
·
Foulath
Holding Bsc Closed 51%
Bahrain
·
Yamato
Kogyo Ltd 49%
Japan
Notes
to the legal Form
A BSC
(Closed), commonly known as a closed joint stock company, consists of a minimum
of two shareholders who subscribe
to it by way of negotiable shares that are not offered to the public for
subscription. Shareholders are liable for
the company's debts and obligations only to the extent of the value of their
shares. The minimum share capital required
is BD 250,000. There must be a minimum of three directors. A closed joint stock
company can be 100% foreign owned. There is no requirement of local sponsorship.
However, depending on the business activity, there may be a requirement of
minimum Bahraini ownership.
OPERATIONS
Activities: Engaged in the manufacture of steel and
steel products, including H beams, angles, sections for high rise buildings,
bridges and other structural steel uses. Full production was reached during
2012.
In May 2012, United
Steel Company (Sulb) signed a US $ 373 million loan agreement with BNP Paribas
and Societe Generale (SGCIB). The loan will help Sulb complete its facilities including
a direct reduction iron plant with a nameplate capacity of 1.5 million tonnes
per year (tpy), a melt shop with a capacity of 1 million tpy and two rolling
mills with a total capacity of 1.2 million tpy and capability to manufacture
light, medium and heavy sections and beams.
Import
Countries: Europe and the
Far East.
Subject has a
workforce of 150 employees.
FINANCIAL
DATA
Financial
highlights provided by local sources are given below:
Currency: United
States Dollars (US$)
Year Sales
Year Ending
31/12/16: US$
685,000,000
Year Ending
31/12/17: US$
702,000,000
Local sources
consider subject’s financial condition to be Good.
Note:
According
to Bahraini Commercial Law, only Bahraini Shareholding Companies BSC (Listed on
the Bahraini Stock Market) are required to publish their financial information.
Financial information on other legal forms can only be obtained from the
companies / businesses directly
BANKERS
·
BNP
Paribas
Government Avenue
PO Box: 5241
Manama
Tel: (973-17) 253119
Fax: (973-17) 242077
PAYMENT
HISTORY
No complaints
regarding subject’s payments have been reported.
SANCTION
LIST CHECKS
The subject and its
shareholders have been checked in the following sanctions list databases:
Sanctions list Results
United Nations Sanctions No
matches
Australian Sanctions No
matches
Bureau of Industry and Security (US) No
matches
EU Financial Sanctions No
matches
Office of the Superintendent of Financial Institutions (Canada) No matches
OFAC - Specially Designated Nationals (SDN) No matches
UK Financial Sanctions (HMT) No
matches
US Consolidated Sanctions No matches
GENERAL
COMMENTS
During the course
of this investigation the following sources were consulted:
- Internal database
- Journals, directories, media & web
searches
- Local Registry office
During the course
of this investigation nothing detrimental was uncovered regarding subject’s operating
history or the manner in which payments are fulfilled. As such the company is
considered to be a fair trade risk.
COUNTRY
OUTLOOK
Recent
Developments
Cheap oil continues to test Bahrain’s economic resilience. Bahrain
maintained an expansionary fiscal stance since 2009 resulting in general
government deficits. The situation worsened in 2015 with a decline in oil
revenues by about 10 percent of GDP and a general fiscal deficit estimated at
12.8 percent of GDP (from 3.4 percent in 2014). The deficit spending helped
maintain economic growth at 2.9 percent, but brought reserves down to a low
level at 2.6 months of imports and increased public debt to 62 percent of GDP.
Bahrain has introduced some initiatives for fiscal consolidation. Revenue
enhancing measures such as higher tobacco and alcohol taxes and government
services
fees were introduced over the past year. A cost-cutting program entailed
the raising of petrol prices by up to 60 percent in January 2016(likely to
create savings worth US$148.4 million), the gradual phasing-in of price
increases for electricity, water, diesel, and kerosene by 2019, an increase and
unification of natural gas prices for industrial users, and the removal of meat
subsidies. Inflation has gradually picked up in 2016 mainly as a result of the
subsidy reform: the headline CPI rose by 3 percent, but it will remain subdued
in 2017 as one-off measures affect the current year
only. 2016 outcomes demonstrate, however, that the authorities’ emphasis
on growth comes at the expense of fiscal deterioration.
The Bahraini economy grew by an estimated 3.4 percent in 2016. While the
hydrocarbon sector grew by an estimated 2 percent, the non-hydrocarbon sectors
grew by an average estimated rate of 3.7 percent, a figure that reflects the
continued emphasis on public investments, some of which were funded by the GCC.
The downside of this approach, however, has been manifested in persistently
high fiscal deficits, estimated at 12.6 percent of GDP in 2016. A large portion
of the 2016 deficit was covered by debt issuances, despite the sovereign
downgrade reflecting increasing pressures on government finances. Bahrain
issued a US$600 million bond just before the downgrade and the authorities
raised the public debt ceiling to BD 10 billion (around 80 percent of GDP) to
enable additional borrowing. Bahrain’s external position faces growing
vulnerabilities. The current account surplus of the past 12 years turned into a
deficit in 2015, following the drop in oil prices and further deteriorated in 2016
to 4.6 percent of GDP. Reserve adjustments reflect the growing external
imbalances. The exchange rate peg has come under significant pressure: external
imbalances were reflected in a decline in reserves to 2.6 months of imports in
the same time
frame. The real effective exchange rate has also appreciated by 17
percent since mid-2014, complicating adjustments to the adverse terms of trade
shock that Bahrain is facing.
Little comprehensive welfare analysis is available due to restricted
access to household survey data, limited capacity, and the sensitivities
involved. Among Bahraini nationals’, labour force participation is low, and
people work predominantly in the public sector, where wages are high and
productivity low. Immigrant workers constitute about a half of the resident
population and command much lower incomes. Key elements of the social contract
- public employment and subsidies - are becoming less affordable in the context
of subdued oil prices. Bahrain aims to gain from upgrading its capacity for
welfare measurement that would support the design of policies aimed at
mitigating the impact of the necessary adjustment. Results from a new household
survey in 2015 have not yet been published.
Outlook
Economic growth is expected to decline in the forecast period. Real GDP
growth projections have been revised downwards to 1.9 percent in 2017 and 2018,
as continuing low oil prices depress private and government consumption. Some
infrastructure investments are also likely to be put on hold. In the absence of
significant upfront
fiscal adjustments, Bahrain will remain vulnerable to fiscal risks.
Average inflation is expected to decrease to 2.1 percent in 2017 reflecting the
cooling off in economic activity and phasing out of temporary price-boosting effects
of subsidy reforms. The current account deficit will partially narrow to 3.8
percent of GDP in 2017 and remain about there for the years to come, with the
exception of small adjustments. International reserves are expected to follow a
declining trend, and reach 1.5 months of imports in 2018. Public debt is
projected to exceed 90 percent of GDP in 2017, and reach about 100 percent in
2018.
Risks and
Challenges
Ensuring fiscal sustainability while preserving a healthy growth rate
has become an important challenge in Bahrain. Real GDP growth is expected to
slow and fiscal and external balances are expected to remain under pressure in
2017 due to oil prices remaining well below fiscal break-even levels. Despite
efforts to diversify and boost non-oil fiscal revenues, hydrocarbons account
for about 80 percent of government revenues in Bahrain. In addition, subsidies
still absorb more than 20 percent of the fiscal budget. The fiscal break-even
price for Bahrain was estimated at US$110 per barrel in 2016, the highest
amongst the GCC. Thus, Bahrain is expected to continue to run significant
general fiscal deficits in the forecast period - 9.8 percent of GDP in 2017.
Delays in implementing fiscal consolidation or a
further decline in oil prices could trigger additional sovereign rating
downgrades making access to external financing harder, and intensifying
pressure on reserves and the peg. Fiscal solvency and liquidity risks are high,
and outcomes remain vulnerable to shocks to growth, commodity prices, and interest
rates.
Key Economic
Indicators 2014 2015 2016* 2017* 2018* 2019*
Real GDP Growth (%) 4.4
2.9 3.4
1.9 1.9 2.3
Inflation Rate (%)
2.7 1.8 3.0
2.1 2.0 2.0
Current Account
Balance (% of GDP) 4.6
-2.4 -4.6 -3.8 -3.5
3.5
Fiscal Balance (%
of GDP) -3.4 -12.8 -12.6 -9.8 -8.9 -7.6
*
forecast
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
INR 65.68 |
|
|
1 |
INR 93.98 |
|
Euro |
1 |
INR 81.30 |
|
BHD |
1 |
INR 174.47 |
Note:
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
|
Analysis Done by
: |
DIV |
|
|
|
|
Report Prepared
by : |
NIT |
RATING EXPLANATIONS
|
Credit Rating |
Explanation |
Rating Comments |
|
A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
|
A+ |
Low Risk |
Business dealings permissible with low
risk of default |
|
A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
|
B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
|
C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
|
D |
High Risk |
Business dealing not recommended or on
secured terms only |
|
NB |
New Business |
No recommendation can be done due to
business in infancy stage |
|
NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.