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Hong Kong Firm Raises Stake in Smith

December 02, 1987|LESLIE BERKMAN | Times Staff Writer

Industrial Equity (Pacific) Ltd., a Hong Kong-based investment firm, has increased its stake in Smith International Inc., the Newport Beach oil tool company that emerged last month from a federal bankruptcy proceeding, to 19.9% from 18.7%.

Industrial, the international investment arm of the Australian and New Zealand investment corporations Brierley Investments Ltd. and Industrial Equity Ltd., has been buying the common stock of Smith International since October, 1986.

It is Smith's largest shareholder. As of the Smith reorganization last month, Industrial has placed two of its officers on Smith's eight-member board of directors.

In a document filed with the Securities and Exchange Commission, the investment firm said it had bought 292,200 shares of Smith common stock from Nov. 2 to Nov. 24, at prices ranging from $6.56 to $7.50 per share, and now owns 4.56 million shares.

Bill Ganelin, an Industrial Equity investment analyst in La Jolla, refused to comment on the latest Smith stock purchase.

Return to Profitability

Loren Carroll, Smith's chief financial officer, said: "I think it shows they are pretty confident in the company's long-term earning power."

He said he expects Smith to reap the benefits of firmer product pricing and staff cutbacks and return to profitability "by latter 1988."

Robert E. Torray & Co., a pension fund industrial investor in Bethesda, Md., is Smith's second-largest shareholder. It has been selling its Smith shares and owns an 8.4% stake in the company, down from 10.1% a year ago.

As a result of Smith's reorganization, Frank A. Benevento II, executive vice president of Robert E. Torray, was elected to the Smith board of directors last month.

Additionally, Industrial Equity (Pacific) obtained a second representative on Smith's board when its executive vice president, Robert Sutherland, was elected last month. Robert Langley, president of Industrial Equity (Pacific), is also a Smith director.

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