The V.I. Public Services Commission will hold public hearings in November on whether to approve transfer of control of Vitelco phone and Innovative Cable TV from its court appointed Chapter 11 trustee to National Rural Utilities Cooperative Finance Corporation, the parent company’s biggest creditor.
The tentative hearing schedule was announced during Thursday’s PSC meeting in St. Croix’s Henry E. Rohlsen Airport conference room.
Vitelco is one of several subsidiaries of ICC, formerly the property of ex-telecoms magnate Jeffrey Prosser. ICC has been in bankruptcy since July 2006. National Rural’s affiliate, Rural Telephone Finance Cooperative is the lender to ICC and holds a $525 million judgment against it. Efforts to auction the component companies were hampered by the global financial crisis and in January, National Rural announced its intent to credit bid for the properties. A credit bid is when a creditor bids for a property at auction, offering not cash, but part or all of the value of the debt owed it.
The telephone and cable television operations are regulated by the V.I. Public Services Commission, which must approve transfers of control over utilities.
Bennett Ross, an attorney for Vitelco, asked the PSC if the hearings could be pushed up a month.
"The court has set a deadline of the end of November for the end of the bankruptcy proceedings and obviously we would have to have the turnover of control before then to meet the court deadline," said Ross.
Commission member Verne David asked what impact a delay would have on the company.
"There are costs that keep accruing as long as the bankruptcy continues," Ross said. "There are also significant delays in investments we would like to make in the telephone infrastructure because obviously the new owners are going to wait on any decisions on large capital investments until they have control of the company. The longer the delay, the longer until the capital infusion."
PSC members responded that as a part-time board, their scheduling options were not so flexible as to allow hearings to begin sooner and as the decision was one that would affect residents for many years to come, it should be approached with thoroughness. No change was made in the hearing schedule.
National Rural, the presumptive incoming owner, is a not-for-profit finance cooperative with more than $20 billion in assets that serves the nation’s rural utility systems. Its affiliate RTFC finances the rural telecommunications industry and has approximately $1.7 billion in credit outstanding. ICC alone accounts for almost a third of that. Both National Rural and RTFC are headquartered in Herndon, Virginia.
Hearings on the change of control are tentatively scheduled for Nov. 4, 5 and 6, at a location to be announced. Present were commission members Donald Cole, Verne David, M. Thomas Jackson, and Sirri Hamad. Commission members Joseph Boschulte and Elsie Thomas-Trotman were absent.
