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MIRA INFORM REPORT
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Report No. : |
495921 |
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Report Date : |
05.03.2018 |
IDENTIFICATION DETAILS
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Name : |
PENFORD (ISRAEL) LTD. |
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Registered Office : |
P.O. Box 3008 (5213001)
21 Tuval Street Diamond Exchange, Yahalom Bldg. Ramat Gan 5252236 |
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Country : |
Israel |
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Date of Incorporation : |
02.07.1980 |
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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 : |
12 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but Correct |
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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
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Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
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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 Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
ISRAEL - ECONOMIC OVERVIEW
Israel has a technologically advanced free market economy. Cut diamonds, high-technology equipment, and pharmaceuticals are among its leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are offset 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 weathered the 2011 Arab Spring because strong trade ties outside the Middle East insulated the economy from spillover effects.
Slowing domestic and international demand and decreased investment resulting from Israel’s uncertain security situation reduced GDP growth to an average of roughly 2.6% per year during the period 2014-16. 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 in the last decade. Political and regulatory issues have delayed the development of the massive Leviathan field, but production from Tamar provided a 0.8% boost to Israel's GDP in 2013 and a 0.3% boost in 2014. One of the most carbon intense OECD countries, Israel generates about 57% of its power from coal and only 2.6% from renewable sources.
Income inequality and high housing and commodity prices continue to be a concern for many Israelis. 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. Government officials have called for reforms to boost the housing supply and to increase competition in the banking sector to address these public grievances. Despite calls for reforms, the restricted housing supply continues to impact the well-being of younger Israelis seeking to purchase homes. Tariffs and non-tariff barriers, coupled with guaranteed prices and customs tariffs for farmers kept food prices high in 2016. Private consumption is expected to drive growth through 2017 with consumers benefitting from low inflation and a strong currency.
In the long term, Israel faces structural issues, including low labor participation rates for its fastest growing social segments - the ultraorthodox and Arab-Israeli communities. Also, Israel's progressive, globally competitive, knowledge-based technology sector employs only about 8% of the workforce, with the rest mostly employed in manufacturing and services - sectors which face downward wage pressures from global competition. Expenditures on educational institutions remain low compared to most other OECD countries with similar GDP per capita.
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Source
: CIA |
Company
name and address
PENFORD (ISRAEL) LTD.
Telephone 972
3 575 01 74
Fax 972
3 575 29 56
P.O. Box 3008 (5213001)
21 Tuval Street
Diamond Exchange, Yahalom Bldg.
RAMAT GAN 5252236
ISRAEL
HISTORY & LEGAL FORMATION
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".
SHARE CAPITAL
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.
SHAREHOLDERS
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 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. In
Mid 2014 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.
SOLE
DIRECTOR
Daniel
(Danny) Steinmetz
GENERAL MANAGER
David (Dudi) Shiama (also manages Group's diamond
operations in Israel).
BUSINESS
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 previously referred to as 54
Bezalel Street), Yahalom Building (28th Floor), Diamond Exchange,
Ramat Gan (shares premises with sister companies of the Group).
In mid-2014 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, USA.
Having 12 employees (same as in 2016, had 14 employees
in 2014, same as in the last previous years).
Estimated to be having around 500 employees in DIACOR
Group worldwide.
MEANS
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).
REVENUES
Subject's sales figures not forthcoming.
According to a media report from 2016 the turnover of
DIACOR Group estimated to be between US$ 500 million to US$ 700 million.
OTHER COMPANIES
DIACORE
Group includes:
PENFORD
(L
DIACOR
INTERNATIONAL LTD., Switzerland,
ASCOT DIAMONDS (ISRAEL) LTD., 100% owned by subject,
processors and polishers, traders, importers, exporters and marketers of cut
diamonds. 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.
BANKERS
The First
International Bank of Israel Ltd., Diamond Exchange Branch (No. 26), Ramat Gan.
CHARACTER AND REPUTATION
Nothing unfavorable learned.
We were unable to speak with subject's CFO, as she was out
of office.
In the last interviews, she refused
to disclose financial data, as well as data on the Group.
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.
It was
reported in 2015, that The Israel Diamond Exchange (IDE) has set up a new
project to give 40 young diamantaires the opportunity to buy rough diamonds
every month from De Beers through subject. Nonsightholder businesses have been
able to purchase De Beers rough diamonds since August 2014, but this is the
first time that a special allocation has been offered to a group selected by
the IDE Industry Committee and subject's General Manager Dudi Shiama. The
monthly allocation will be worth up to US$200,000 and subject will be giving
the young diamantaires 60 days credit, with the understanding that the diamonds
will be cut in Israel.
Export
(net) of polished diamonds from Israel in the first 9 months of 2017 totaled
US$ 3,383 million, which represents 11.8% decrease compared to the parallel
period in 2016, while export of net rough diamonds fell 10.4% in this period,
reaching US$ 1,796 million. That is in contrast to the figures in 2016, which
showed signs of recovery for the Israeli diamond trade, coming after the export
of diamonds from Israel experienced a drastic fall by 20% in 2015 from 2014
(down 40% from 2011).
Net
export of polished diamonds in 2016 decreased by 6.4% from 2015, reaching US$
4,675 compared to US$ 4,993 million in 2014 (after 0.6% rise in 2014 and 11.6%
in 2013), however net rough diamonds exports jumped 23.1% to US$2,702 million
(in 2015 fell 28.3% from 2014, after 4.2% rise in 2014, and a mere rise in
2013). Yet the figures are well away from its peak on the eve of the crisis
with export of polished diamonds of US$ 7 billion.
The
market has been volatile over the last years after experiencing its worst
depression due to the global economic crisis. According to Israel's Diamond
Administration (IDA) at the Ministry of Economics, profit margins have been
decreasing due to smaller gaps between rough (increasing) and polished
(decreasing) diamond prices.
In
addition, the local diamond sector has been negatively affected by other
significant factors: the production of counterfeit diamonds, whose quality
keeps improving (harming the raw diamonds market), the entrance of new rules by
the local Tax Authorities on the Diamond Exchange for enforcing money
laundering, and the "underground bank" affair – as below.
As a
result, local diamond dealers report on difficulties in executing transactions
and bad atmosphere in the branch. The first signs of recovery appeared towards
the last quarter of 2016 – mainly due to the growing stability of the market
and the industry’s agreement with the Israel Tax Authority in December.
Net
imports of polished diamonds totaled US$ 3,282 million in 2016, 5.7% decrease
from 2015, while net import of rough diamonds reached US$ 3,246 million, up
16.7% from 2015.
Net
imports of polished diamonds decrease by 15.1% in the first 9 months of 2017
and totaled US$ 2,015 million, compared to the parallel period in 2016, whereas
net import of rough diamonds reached US$ 2,089 million, down 11.6% from 2016.
The
United States continued to be Israel’s major market for polished diamonds,
accounting for 39% of the market in 2016 (was 40% in 2015). Hong Kong is 2nd
largest market with 26% of exports (27% in 2015), followed by Belgium 8% (9%),
Switzerland 7% (7%), U.K. 4% (was 3% in 2015), and the rest of the world
account for the remaining 16% of Israel's polished diamond export.
In
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" (known as the "Check List"
Affair) 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, and for a while to paralysis
(especially in raw diamonds purchase) due to uncertainty among local and
foreign dealers. Later in 2012 the Police decided to lower the profile of the
investigation for a while (pressure from the diamond branch due to the
continuing damage inflicted and the Government (losing US$ hundred millions
from decrease in tax collection), but resumed investigation in 2013.
In
mid-2014, based on the Police and Tax Authorities recommendations, the State Attorney
started the process of filing indictments against central defendants in the
affair, initially against dealers who provided foreign currency services to the
"bank" (in June 2015 the court made the first conviction in the
affair, sending a foreign currency dealer who pretended also to be a diamond
dealer, for 4 years prison, a fine and confiscation of assets in volume of NIS
millions, part of a plea bargain). Since late 2015 indictments for severe
charges pressed against 11 diamond dealers and their firms for tax felonies
committed and issuing fictitious invoices in volumes of millions US$ (latest
indictments filed by the Tel Aviv District Attorney in August 2016).
SUMMARY
Notwithstanding
the refusal to disclose financial data, considered good for trade
engagements.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 65.22 |
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1 |
INR 89.71 |
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Euro |
1 |
INR 79.50 |
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ILS |
1 |
INR 18.86 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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PRI |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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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.