Ocean Pacific Negotiating Sale to Investment Group : Acquisition: Surf-wear licenser is reportedly close to signing a letter of intent with Berkeley International Capital Corp.

Ocean Pacific Sunwear is negotiating its sale to a San Francisco investment group, OP executives said Monday, and an agreement could come soon.

The surf-wear licenser, once the giant of the industry, is involved in “substantial negotiation” with Berkeley International Capital Corp., said Michael Balmages, OP’s senior executive vice president. “We are extraordinarily close to (signing) a letter of intent with them.”

No Berkeley representative could be reached for comment.

Berkeley is one of several groups that have expressed an interest in buying OP, which is trying to reorganize after a bankruptcy filing and to settle a lawsuit by its majority owner against others with a stake in the privately held company.

Berkeley came forward with an offer last spring, about the time that OP, based in Irvine, filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The group’s initial offer, Balmages said Monday, was to pay nearly $7 million to settle secured debts owed by OP to Wells Fargo Bank and Republic Factors Corp. in Los Angeles; about $6 million to pay almost all of the company’s unsecured debt; and $5 million that would be divided among the owners.

That $18-million offer has been modified since then as negotiations have proceeded, Balmages said. He would not be more specific.

Several offers have been made for OP in the past few years. All except the most recent one, in February, would have paid the partners $10 million or more. The February bid, from Sequoia Associates Ltd. in Menlo Park, would have paid $3 million to $5 million in cash, $15 in notes and the assumption of liabilities. OP Chairman Jim Jenks and other company officials have said that lack of financing was the major stumbling block to previous proposals.

But Elaine Ornitz, who became the OP owner with the largest stake in 1988 upon the death of her husband, OP President Larry Ornitz, has alleged in a lawsuit that the sales were blocked by Jenks.

Jenks denies the allegations. He said Monday that the Berkeley plan has the financing that the previous plans lacked and therefore would be good for the company.