HOW A NEBRASKA BOY BUILT AN ISLAND EMPIRE WITH OTHER PEOPLE'S MONEY-JEFFREY PROSSER
Jeffrey Prosser grew up in Falls City, Nebr. (pop. 5,000). He drove a bulldozer and spliced cable for the telephone company where his father worked. He got an accounting degree at the University of Nebraska. He went to the Caribbean at age 25 on behalf of some Nebraska investors interested in buying an alumina plant in St. Thomas. The purchase didn’t go through, but he stayed. When ITT offered its Virgin Islands telephone business, Vitelco, for sale, he made an $87 million bid. Vitelco ignored the offer then, but six months later, it reconsidered. Prosser obtained 105% debt financing from E.F. Hutton & Co. Vitelco had no competition in the Virgin Islands and the Virgin Islands Public Service Commission guaranteed him an 11.5% return on his investment. Mr. Prosser refinanced in just one year, replacing the Wall Street loan with a $104 million loan from the Rural Telecommunications Finance Cooperative at a below-market rate. Mr. Prosser then purchased 80% of Guyana Telephone & Telegraph for $25 million. Eleven months later, he took Vitelco public by offering 4.4 million shares, 40% of the total shares, at $19 per share. That made Mr. Prosser's stake worth $63 million. Mr. Prosser kept buying. He used his company “Innovative” to buy four Caribbean cable-TV companies and Gannett's Virgin Islands Daily News. He then consolidated his businesses, by having Innovative buy out Emerging Communications. He got rid of the minority shareholders in the process. Mr. Prosser still kept on buying. The government of Belize gave Innovative permission to buy all the stock of Belize Telecommunications Ltd., from Lord Michael Ashcroft and Carlisle Holdings, for $105 million. For that deal, Mr. Prosser needed to pay Belize Telecommunications' debts to the Belize government, in cash. Vitelco sold 85,000 shares of preferred stock to investors for $82 million to...
Please join StudyMode to read the full document