Easco Corp., a Baltimore-based tool maker and metals producer that has sustained considerable losses this year, is planning to raise about $25 million by selling convertible bonds, most of which will be used to repay short-term bank debt.

The company filed a registration statement with the Securities and Exchange Commission last week describing the proposed offering. In a separate filing this week, two Washington investors disclosed that they have acquired 9.2 percent of the company's stock.

Easco's convertible bonds could be exchanged at a later time for common stock, subject to certain conditions, and such an exchange would increase the strength of the company's balance sheet.

"Because of their losses this year, Easco's balance sheet has more debt than the company would like," said Ernest Kiehne, senior vice president of Legg Mason Wood Walker Inc., an area securities firm. "They would both like to improve their balance sheet and set themselves up for future opportunities."

Easco made money in it's aluminum business this year, but lost money in its industrial gratings business, Kiehne said. The firm also had losses in it hand-tool business. "The massive modernization of their hand-tool plant facilities has proved to be costly and rigorous," he said.

Easco, which operates seven manufacturing plants, recently reported operating losses for the third quarter and nine months ending Sept. 30. In its third quarter, the company posted a net loss of $5.9 million (87 cents a share) on revenue of $141.4 million, compared with net income of $2.8 million (42 cents) on revenue of $132.8 million in the same period last year.

For the nine months, Easco reported a net loss of $6.1 million (90 cents) on revenue of $412.3 million compared with a net income of $7.7 million ($1.27) on revenue of $365 million in the same period last year.

Equity Group Holdings, a Washington private partnership engaged in real estate and manufacturing operations, disclosed earlier this week that it had purchased about 9.2 percent or 653,700 common shares of Easco for about $9 million. The company's sole partners are Steven M. Rales and Mitchell P. Rales.