April 12, 2001 — During the past five years, St. Croix's Jeffrey Prosser has borrowed more than $500 million to expand his business empire, Innovative Communication Corp. But the communications and banking magnate's ability to raise money may be ebbing, according to a Source contributor, a private researcher who recently attempted to uncover the wellspring of Prosser's stream of wealth.
Proof of just a portion of ICC's recent hefty spending is evident in his high-profile projects on St. Croix, including the $6 million-plus renovation of the former Victor Borge mansion as Innovative's corporate headquarters and the expenditure of approximately $8 million to build Innovative's customer service center at Sunny Isle.
But the inner financial workings of privately held ICC and its sole owner, Prosser, remain a mystery. The same secrecy that hampers public scrutiny of ICC has fueled speculation that Prosser is nearing the end of his financial rope with his largest benefactor.
As Washington-based private researcher David North chronicles in a Source Op-ed article, that rope is attached to the National Rural Utilities Cooperative Finance Corp. (CFC), a financial institution created by the nation's rural electric and telephone co-ops to find them private money they could borrow at low-interest rates.
Through its subsidiary V.I. Telephone Corp. (Vitelco), newly renamed Innovative Telephone, ICC has borrowed an estimated $550 million and counting. As North details, that funding source could be drying up. But while the money coming into ICC from CFC may be slowing, ICC's interest payments on more than a half-billion dollars in loans will continue to come due.
Like ICC, CFC is a private company, so obtaining detailed information is difficult, if not impossible. A CFC website does offer limited information on loan terms.
Long-term loans are secured by a first mortgage lien on all assets and revenues of a borrower.
Long-term loans are generally for 15 years. At an interest rate of between 8.2 percent and 8.65 percent, ICC is paying millions of dollars annually on its half-billion dollars in loans.
That hefty expense, taken together with facts and conjecture, has fired up the territory's rumor mill.
Grist for the mill includes Prosser moving his family to West Palm Beach in Florida, a state with liberal bankruptcy laws, and establishing an ICC office there. That move has some observers speculating that Prosser has prepared a contingency plan if ICC fails.
However, others say he made the move to remove his family from beneath the high-power microscope of the Virgin Islands community.
Then there are the persistent rumors that the Prosser-owned Daily News newspaper, which is supposedly losing millions of dollars a year after being purchased in 1998 for approximately $17 million, is up for sale. ICC officials denied the sale rumor last year in an article published in The Avis, the territory's other daily print newspaper.
Finally, there are the past and current construction liens against ICC. Earlier this year, a St. Croix contractor filed a $800,000 lien against ICC for work performed on the Borge mansion. While that lien has been settled, two others for a total of approximately $90,000 remain.
Holland Redfield, ICC vice president for corporate affairs, declined to comment on a variety of questions submitted to ICC regarding the company’s finances.
"The company’s position is that it is private information," Redfield said. "It would be inappropriate to release that kind of information."
