The San Juan Star / August 13, 1997
By Larry Luxner
Virgin Islands-based Atlantic Tele-Network, one of the Caribbean's most aggres-sive private telephone companies, says its board of directors has approved breaking up ATN into two separate public firms, following personal and managerial differences between the two men who founded ATN back in 1988.
One of the new companies, Emerging Communications Inc. (EmCom), will contain all of ATN's investments -- including ownership of the Virgin Islands Telephone Co. (Vitelco), and will be controlled 52% by Jeffrey J. Prosser, ATN's chairman and co-chief executive officer.
The second company, ATN, will retain its operations in the South American nation of Guyana, and will be controlled 57% by Cornelius B. Prior Jr., ATN's president and co-chief executive officer. Neither Prosser nor Prior will own stock in the other's company. After the transaction, the two companies will have separate boards of directors.
Prior said there'll be no change in ATN's ownership of 80% of Guyana Telephone & Telegraph (GT&T), though the company will also begin pursuing telecom opportunities in other Caribbean markets, especially Haiti and the Dominican Republic.
ATN, established by Prior and Prosser nearly 10 years ago, bought Vitelco from ITT Corp. in 1988 for an undisclosed price.
In 1996, ATN registered sales of approximately $200 million. According to Prior, roughly 60% of that is attributable to GT&T, where the company has 51,955 lines in service throughout Guyana. Most of the remaining 40% comes from Vitelco, which has 61,055 lines in service on St. Thomas, St. Croix and St. John.
In addition, ATN owns a 2% stake in a cellular provider on St. Maarten, and has sought investment opportunities in at least three African countries. At one time, it owned long-distance reseller Puerto Rico Telecom, but in 1992 that was sold to STSJ, which in turn has been acquired by TresCom International.
Asked why ATN had to be split up, Prior blamed it on "the years-old inability of Mr. Prosser and me to agree on strategic and specific issues."
"We had lawsuits back and forth, and we finally found that the best way to solve all the problems was to split the company in two," Prior said in a phone interview Tuesday from St. Thomas. "He's promised to stay out of my company, and I've promised to stay out of his. It's about a clean a divorce as you can imagine."
As a result of the split-up, each ATN stockholder will receive, for every share of ATN common stock, 4/10ths of a share of ATN stock and one share of EmCom stock. In addition, ATN will repurchase 765,564 shares of ATN common stock owned by Prior and a trust established by him for $17.4 million.
The transaction is conditioned, among other things, on its approval by the holders of a majority of outstanding ATN stock at a meeting later this fall; on receipt of a tax ruling from the Internal Revenue Service to the effect that the transfer of assets and liabilities to EmCom and the distribution of EmCom stock to ATN shareholders will be tax-free for U.S. federal income tax pruposes; the listing of EmCom stock and the continued listing of ATN stock on the American Stock Exchange, and "the absence of any material adverse change in the business of ATN or EmCom."