Shamrock May Sell Its Stake in Enterra Corp.

Shamrock Holdings Inc. is poised to cash in on another of the investment plays it made in distressed companies in the 1980s.

Shamrock, a Burbank-based investment firm, is mulling the sale of its remaining 11.8% stake in Enterra Corp., an oil-services concern based in Houston that was in dire shape when Shamrock bought into the company in 1986.

Now, however, Enterra is performing nicely and, with its stock sharply higher, Shamrock is ready to close another apparently profitable chapter in its investment record. An earlier chapter was Central Soya Co., which Shamrock bought in 1985 for $350 million. It sold the Indiana food-processing company two years later for a $150-million profit.

In a filing late last week with the Securities and Exchange Commission, Shamrock said it still owns 1.9 million Enterra shares and “is considering the sale of all or a significant portion of the shares.” Shamrock, which is controlled by Roy E. Disney--the late Walt Disney’s nephew--said it hadn’t yet decided when or how to divest the stock.

Enterra’s stock closed Monday at $23.625 a share in New York Stock Exchange composite trading; at that price Shamrock’s stake is worth $44.9 million. Shamrock originally accumulated a 23.5% interest in Enterra in 1986 at prices ranging from $7 to $12, and has since periodically sold parts of it to reduce the stake to 11.8%.

When Shamrock bought into Enterra, Shamrock President Stanley P. Gold also became Enterra’s chairman. A Shamrock spokesman said the firm was not commenting on whether, if its remaining Enterra shares are sold, Gold would retain that post and on any other aspects of Enterra, including how much profit Shamrock stands to earn on the investment.

As is common with Shamrock’s investments, Shamrock took an active role in Enterra’s management. After the firm purchased its stake, Gold immediately took charge in 1986 and brought in a new management team, which quickly divested the company’s non-energy businesses.

Since early 1988, Enterra’s revenues, profits and stock price have been on the rise. Last year, the company earned $18.2 million on revenue of $144.5 million, and it has no long-term debt.

Moreover, Enterra’s services and equipment have enjoyed strong demand in Kuwait, where there’s a massive effort to repair that nation’s oil production facilities after the Persian Gulf War.

But as Kuwait’s production facilities are repaired, Enterra could face a slowdown in its growth, which might be one reason why Shamrock is now prepared to “switch to something else” and away from energy, suggested John Herrlin Jr., who follows Enterra for Smith Barney, Harris Upham & Co. in New York.

Besides its Enterra stock, Shamrock owns the Music Plus and Sound Warehouse Inc. record-store chains, three television stations and 15 radio stations. Trefoil Capital Investors L.P., a separate fund controlled by Shamrock’s principals, recently bought a 34% stake in the sneaker maker L.A. Gear Inc.