Oak Plans to Sell KBSC to Investors for $30 Million

Oak Industries said Wednesday that it has agreed in principle to sell its Corona-based KBSC-TV to a group of investors headed by television executive Joseph Wallach for $30 million in cash.

The sale follows Oak’s decision, announced Monday, to sell its ailing ON-TV pay-television operation to rival SelecTV of America Ltd. for an undisclosed amount of cash and assumption of certain liabilities.

ON-TV is broadcast from KBSC on Channel 52. SelecTV said it has the right to discuss purchasing air time from the new owners, should the sale of KBSC be completed.

The agreement to sell KBSC is subject to development of a definitive agreement and approval of the Federal Communications Commission. That process could take six months or more, according to an Oak spokesman.

The troubled cable-TV and media company agreed to sell a Florida television station last July and completed the transaction last December. Oak’s only remaining TV station interest is a 48% stake in WSNS of Chicago, where the company also broadcasts an over-the-air pay TV operation.

The Wallach-led group has formed a privately held company, Estrela Communications Inc., for the purpose of purchasing KBSC. An Oak spokesman said the group is “very, very well capitalized.”

Wallach is the former executive director of Globo Television Network of Brazil.

“This is very good news” for Oak, Chief Financial Officer Frank Astrologes said. The company has been raising working capital through the sale of assets and postponing cash dividends and interest payments.

Last week, Oak said it would attempt to restructure $230 million in debt in an attempt to save $28 million annually in interest payments. The company has reported losses in the last nine consecutive quarters.

Oak also said it will take write-offs of $80 million in the fourth quarter of 1984, leaving it with a negative net worth of $23 million.