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Hungarian Telephone & Cable Corp · 10-Q · For 3/31/96

Filed On 5/15/96 · SEC File 1-11484 · Accession Number 889949-96-2

  As Of               Filer                 Filing     On/For/As Docs:Pgs

 5/15/96  Hungarian Telephone & Cable Corp  10-Q        3/31/96    4:77

Quarterly Report · Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                      12     60K 
 2: EX-10       Material Contract                                     53±   251K 
 3: EX-10       Material Contract                                     11±    56K 
 4: EX-27       Financial Data Schedule                                1      6K

10-Q · Quarterly Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Exhibits and Reports on Forms 8-K Management's Discussion and Analysis of Financial Condition and Results of Operations Management's Discussion and Analysis of Financial Condition and Results of Operations. (continued)
1	1st Page
9	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. (continued)
11	Item 6. Exhibits and Reports on Forms 8-K

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  HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARIES

 Consolidated Condensed Financial Statements

 For the quarterly period ended March 31, 1996

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1996   Commission file number 1-11484  
                             --------------                          -------

HUNGARIAN TELEPHONE AND CABLE CORP.     
(Exact name of registrant as specified in its charter)    

Delaware                                    13-652685 
(State or other jurisdiction of              (I.R.S.Employer Identification No.)
incorporation or organization)                                                  

    227 Rt. 206 Bldg. 1 Unit 11, Flanders, NJ  07836
    (Address of principal executive offices)
  (212) 571-7400
    Registrant's telephone number, including area code

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding  twelve months (or for such shorter period that the Registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past ninety days.                                          

                           Yes  X     No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of the lastest possible date:                                   

Common Stock, $.001 par  value                          4,268,055 Shares        
------------------------------                          ----------------        
         (Class)                                (Outstanding at April 30, 1996 )

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HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARIES

 Table of Contents

Part I. Financial Information                                                   

Consolidated Condensed Balance Sheets                            2              
Consolidated Condensed Statements of Operations                  3              
Consolidated Condensed Statements of                                            
Stockholders' Equity                                             4              
Consolidated Condensed Statements of Cash Flows                  5              
Notes to Consolidated Condensed Financial Statements             6              
Management's Discussion and Analysis of Financial                               
Condition and Results of Operatons                             9            

Part II.  Other Information                                      14             

Signature                                                        15             

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  HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARIES
     Consolidated Condensed Balance Sheets
(In thousands, except share data)   

Assets                  
                                        March 31, 1996         December 31, 1995
                                        --------------         -----------------
               (unaudited)
Current assets:                                                                 
Cash and cash equivalents         $      13,716            $     16,192 
Restricted cash                           2,242                   1,757 
Accounts receivable                       4,494                   1,399 
VAT receivable, net                       5,185                   4,432 
Prepayments and other                         4,256                   4,449     
Other current assets                      1,614                   1,598 
                                   -----------             -----------
        Total current assets            31,507                  29,827
                                   -----------             -----------
Property, plant, and equipment               57,752                  55,353     
Less accumulated depreciation                 1,621                   1,131     
                                   -----------             -----------
Net property, plant and equipment        56,131                  54,222 
                                   -----------             -----------
Goodwill and intangibles, less                                                  
accumulated amortization                 17,286                  19,768 
Other assets                                  8,277                   6,570     
                                       -------             -----------
Total Assets                         $      113,201           $     110,387     
                                 =============             ===========

        Liabilities and Stockholders' Equity
Current liabilities:                                                            
Notes payable                     $           0           $         300 
Current installments of                                                 
 long-term debt                          6,236                   9,699
Short term loans                         32,580                  33,982 
Accounts payable                          6,521                   8,835 
Due to related parties                   14,412                   3,075 
Accruals                                  3,143                   5,564 
Other current liabilities                 6,853                   1,953 
                                   -----------             -----------
        Total current liabilities       69,745                  63,408
Long-term debt, excluding current                                               
installments                              29,805                  23,467  
Advance subscriber payments, long term            0                   2,136     
                                   -----------             -----------
        Total liabilities               99,550                  89,011
                                   -----------             -----------
Commitments and contingencies                                                   
Minority interest                             3,016                   5,637     
                                   -----------             -----------
Stockholders' equity:                                                           
Common stock, $.001 par value.                                          
Authorized 10,000,000 shares;                                   
issued 4,265,039 shares                                         
in 1996 and 4,015,039 shares                                    
   in 1995                                   4                       4
Additional paid-in capital               48,577                  45,358 
Accumulated deficit                     (31,959)                (26,192)
Foreign currency translation                                            
    adjustment                           (5,046)                 (2,381)
Deferred compensation                      (941)                 (1,050)
                                    ------------            ------------
    Total stockholders' equity          10,635                  15,739
                                     -----------             -----------
Total liabilities and stockholders'                                             
equity                             $     113,201            $    110,387
                                     ===========             ===========

See accompanying notes to consolidated condensed financial statements.          

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        HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARIES
     Consolidated Condensed Statements of Operations
       For the Three Month Periods Ended March 31, 1996 and 1995
         (In thousands, except share and per share data)

                       (unaudited)

                                              1996                    1995
                                              ----                    ----
TELEPHONE SERVICES REVENUES, NET         $      5,159                     407   
Operating expenses:                                                             
 Operating and maintenance expenses          4,964                   1,031
Depreciation and amortization                   2,195                     456   
 Management fees                             1,342                     725
                                       -----------                --------
 Total operating expenses                    8,501                   2,212
                                       -----------                --------
LOSS FROM OPERATIONS                           (3,342)                 (1,805)  
Other income (expenses):                                                        
 Foreign exchange                           (1,412)                    322
  Interest expense                           (1,735)                   (245)
 Interest income                               192                     136
Other, net                                    211                       
                 -----------
LOSS BEFORE MINORITY INTEREST                  (6,086)                 (1,592)  
MINORITY INTEREST                                 318                     374   
                                         -----------                --------

NET LOSS                               $       (5,768)                 (1,218)  
                                        ============               =========

LOSS PER SHARE OF COMMON STOCK         $        (1.41)                   (.45)  
                                     ===============               =========

WEIGHTED AVERAGE NUMBER OF                                                      
COMMON SHARES OUTSTANDING                    4,080,079               2,724,431  
                                          ===========                =========

See  accompanying  notes to consolidated  condensed  financial  statements.  The
Company ceased to be a development stage company on April 1, 1995.              

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HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARIES  
Consolidated Condensed Statements of Stockholders' Equity 
(In thousands, except share data)   
(unaudited)         

                                                        · Enlarge/Download Table


                                                                                    Foreign                              
                                                             Additional             Currency                 Total       
                                                     Common   Paid-in  Accumulated Translation    Deferred Stockholders  
                                            Shares    Stock   Capital    Deficit   Adjustment   Compensation  equity     
----------------------------------------------------------------------------------------------------------------------   
                                                                                                                         
Balances at December 31, 1995              4,015,039  $   4    $ 45,358  $ (26,192) $ (2,381)     $ (1,050)  $  15,739   
Common stock issuance                        250,000              3,219                                          3,219   
Net Loss                                                                    (5,767)                             (5,767)  
Foreign currency translation adjustment                                               (2,665)                   (2,665)  
Earned compensation                                                                                    109         109   
-------------------------------------------------------------------------------------------------------------------------
Balances at March 31, 1996                 4,265,039  $     4  $ 48,577  $ (31,959) $ (5,046)   $     (941)  $  10,635   


See accompanying notes to consolidated condensed financial statements.          

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      HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARIES
       Consolidated Condensed Statements of Cash Flows
           For the Three Month Periods Ended March 31, 1996 and 1995
                                    (In thousands)
                                   (unaudited)

                                                1996                    1995

Net cash used in operating activities     $     (7,659)                 (2,053) 
                                             ---------              ----------

Cash flows from investing activities:                                           
    Acquisition of property and equipment      (5,031)                 (9,395)
Cash received from sale of                                            
     subsidiaries stock                                                1,464

   Acquisition of interests in subsidiar        (330)                    641
   Decrease in intangible assets                                          37
    Loan receivable                                                      (136)

        Net cash used in investing activities  (5,361)                 (7,389)
                                             ---------              ----------
Cash flows from financing activities:                                           
   Borrowings under long-term debt               108                   5,771
   Proceeds from short-term loans                                      1,167
   Proceeds from issuance of common stock                                105
Repayment of short-term debt               (4,865)                    
Proceeds from borrowings from related                                 
parties                                  16,430                   
                     ---------
Net cash provided by financing                                
          activities                          11,673                   7,043
                                            --------               ---------
Effect of foreign exchange rate changes on                                      
cash                                          (1,129)                    322
                                            ---------              ---------

Net decrease in cash and cash equivalents       (2,476)                 (2,077) 

Cash and cash equivalents at beginning                                          
 period                                         16,192                   6,966
                                              --------               ---------
Cash and cash equivalents at end period   $      13,716                   4,889 
                                              ========               =========

See  accompanying  notes to consolidated  condensed  financial  statements.  The
Company ceased to be a development stage company on April 1, 1995.              

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HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARIES    
Notes to Consolidated Financial Statements      
(unaudited)   

(1)    Basis of Presentation                                      

              The  accompanying   condensed  consolidated  financial  have  been
              prepared  without audit and in the opinion of  management  include
              all adjustments,  consisting  mainly of normal recurring  accruals
              necessary for fair  presentation.  Results for the interim periods
          are not necessarily indicative of the results for a full year.

(2)    Cash and Cash Equivalents and Restricted Cash              

              At March 31, 1996 cash of $2,752,000  denominated in U.S.  dollars
              was on deposit with a major money center bank and a U.S.  Treasury
money  market  fund in  the  United  States.  In    
             addition, at March 31,1996 $10,964,000 ($1,764,000 denominated in
              U.S. dollars,  the equivalent of $1,872,000  denominated in German
              Deutsche  Marks and the  equivalent of $7,328,000  denominated  in
              Hungarian Forints) was on deposit with Hungarian  government-owned
banks and a foreign bank in Hungary.                

              Approximately  $2,242,000 at March 31, 1996 of cash denominated in
              Hungarian   Forints  is  restricted  under   concession   contract
              fulfilment  guarantees  with  restrictions  to be removed upon the
        successful attainment of certain operational requirements as
prescribed  in the                                  
              concession  agreements  and other  operational  requirements.  The
              Company expects to satisfy the other  operational  requirements in
              1996 and  therefore  the  restricted  cash is  shown as a  current
asset.                                              

(3)    Related Parties                                            

              Due to  related  parties  at March 31,  1996 is  comprised  of the
              following:   $37,000   due  to   Hungarian   Teleconstruct   Corp.
              ("Teleconstruct")  for rent and  other  services,  plus  interest;
              $904,000  due to  TeleDanmark  A/S  ("TDI")  for  management  fees
              chargeable under the management agreement;  and $13,471,000 due to
              Citizens  Utilites Company  ("Citizens")  for loans,  reimbursable
              management costs,  management fees chargeable under the management
              services  agreement  and interest  charged  under the terms of the
Citizens Loan Agreement.                            

              During the three months ended March 31, 1996 and 1995, the Company
              also  paid  legal  fees  of  approximately  $21,000  and  $30,000,
respectively, to an officer.                        

           HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARIE
              Notes to Consolidated Financial Statements
             (unaudited)

              On  March  26,  1996,   the  Company   agreed  to  purchase   from
              Teleconstruct  Kft, the  Hungarian  subsidiary  of  Teleconstruct,
              premises  used as offices by the Company and its  subsidiary  HTCC
              Consulting  Rt, in  Budapest,  Hungary  for a price of $250,000 or
              such   lesser   amount  as  can  be   substantiated   as  cost  to
              Teleconstruct.  $125,000 of the purchase  price has been paid as a
              deposit,  carrying  interest  at the rate of 8% per annum.  In the
              event that the Company  does not  complete  the  purchase  for any
              reason within 60 days, the deposit paid, and all accrued interest,
is returnable by Teleconstruct to the Company.      

              Included in Long-term debt at March 31, 1996 is approximately $6.2
              million  borrowed from TDI by subsidiaries  under the subordinated
loan agreement.                                     

(4)    Credit Facility                                            

              On March 29, 1996, the Company  entered into a $75 million Secured
              Term Loan Credit Facility  ("Credit  Facility") and, together with
              HTCC  Consulting,  a related  Pledge and Security  Agreement  with
              Citicorp  North  America,  Inc.  ("Citicorp").  Advances under the
              Credit  Facility  may be requested  through  December 31, 1996 and
              will  bear  interest  rates  of  3.5%  and  6.5%  above  LIBOR  or
              Citicorp's  announced base rate. The loan is repayable by December
              31, 1996. On April 3, 1996, the Company used  $50,753,000 from the
              Credit  Facility to repay all the funds  advanced or guaranteed by
              Citizens  and  Chemical   Bank   pursuant  to  the  Citizens  Loan
              Agreement.  In April,  1996 the  Company  will  record a  non-cash
              charge of  approximately  $8 million  representing  the  remaining
              unamortized  deferred  financing costs  pertaining to the Citizens
Loan Agreement.                                     

              The  Company  has  engaged  an  investment  bank to  serve as lead
              underwriter  for the  placement of  approximately  $150 million in
              debt  securities of the Company,  which is anticipated to close in
mid-1996.                                           

    HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARIES
    Notes to Consolidated Financial Statements
(unaudited) 

(5)    Construction Commitments                                   

              In 1995 Ro ba-Com and  Kelet-NUgro  d Com entered  into  contracts
              with an unrelated  corporation  which provide for the construction
              of the local telephone exchanges in the two primary districts on a
              turnkey basis. The minimum contract price for the two districts is
              HUF  7,778  million  (approximately  $53  million)  of  which  the
              contractor will finance DM 20,000,000 (approximately $13.5 million
              at March 31, 1996)  representing  85% of the contract price of the
              equipment.   The  financing  is  for  an  eight-year  period  with
              semi-annual instalments beginning July 1, 1995, including interest
              at DM-LIBOR (Deutsche mark London interbank offered rate) plus 1%.
              The  contractor  will hold a  security  interest  in all  financed
              property  until the payment of the last  instalment.  On March 31,
            1996, HUF 983 million (approximately $6,700,000 at the March 31,
        1996 exchange rate) was owed  to the  contractor  under  the
         financing  arrangement.  The balance  sheet at March 31, 1996
         includes $4.2 million of advance payments to the  contractor.
    This advance will be applied against future  costs to be
    incurred  during  the  remaining  term of the contracts.

              On May 10,  1996  the  Company  entered  into a  contract  with an
              unrelated  corporation  which provides for the construction of the
              local  telephone  exchange in the Papo primary region on a turnkey
              basis, at a fixed price of approximately $13.2 million,  including
              $2 million for  settlement of all past  obligations.  The contract
requires full completion of construction in 1996.   

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            HUNGARIAN TELEPHONE AND CABLE CORP. AND SUBSIDIARIES

Item 2.     Management's Discussion and Analysis of Financial Condition and     
Results of Operations.                                  

         The Company earns substantially all its telecommunications revenue from
connections  fees,  monthly line rental fees,  toll usage,  public pay telephone
services and  ancillary  services  (including  charges for  additional  services
purchased at the customer's discretion).  The ability of the Company to generate
sufficient  revenues to cover cash  expenditures  and to become profitable will 
depend  upon a number of factors,  including  the  Company's  ability to attract
customers,  revenues per customer,  churn rates and  construction  costs.  These
factors are expected to be primarily  influenced by the success of the Company's
operation   and   marketing   strategies   as  well  as  market   acceptance  of
telecommunications  services in the Company's Operating Areas. In addition,  the
Company's  profitability may be affected by changes in the Company's  regulatory
environment.                                                                    

         The success of the Company's strategy is measured to some extent by its
ability to add new subscribers.  Since March 31, 1995, the Company has installed
or commenced  operating over 55,000 access lines.  During this same period,  the
Company's  churn has been  negligible.  The Company  does not believe  that such
rates of subscriber addition will be sustainable in the future, especially after
its  exclusivity  period for the provision of basic  telephone  services ends in
2002.                                                                           

Results of Operations                                                           

Revenues                                                                        

The Company commenced operations in its subsidiary's respective concession      
areas as of the following dates:                                                
                          Access lines in service at
Subsidiary       Acquisition Date    Acquisition date  March 31, 1996           
Raba-Com         January 1, 1995        2,480              7,007                
Kelet-Nograd     March 1, 1995          13,050            16,511                
Hungarotel       January 1, 1996        40,591            43,068                
Papatel          January 1, 1996         3,823             4,204                
                        59,944            70,790
                        ======           =======
The Company was in the development stage through March 31, 1995.                

Item 2.     Management's Discussion and Analysis of Financial Condition and     
Results of Operations. (continued)                      

Revenues for the three months ended March 31, 1996  increased as compared to the
three  months  ended  March  31,  1995  primarily  due  to the  acquisitions  of
additional concession areas and customer growth (see table above). This increase
resulted  principally from the connection of 4,527 and 3,461 new access lines in
the Raba-Com and KNC operating areas, respectively, and the inclusion of results
for the Papatel and  Hungarotel  operating  regions which added 3,823 and 40,591
access lines in these new areas,  respectively,  to the Company's  operations in
Papatel and Hungarotel  operating  regions.  Since  assumption of operations the
Company  has  installed  381 and 2,477 new access  lines in the  Hungarotel  and
Papatel concession areas, respectively, in the quarter ended March 31, 1996.    

For the three  months  ended March 31, 1995,  the Company  recorded  revenues of
$407,000  primarily  related to measured  services in Kelet-Nograd and Raba-Com.
For the three months ended March 31, 1996 the Company recorded  measured service
revenues of $1,083,000 for Kelet-Nograd,  $320,000 for Raba-Com,  $3,243,000 for
Hungarotel  and  $389,000 for  Papatel.  Measured  services for the three months
ended March 31, 1996 totalled $5,035,000 or approximately $74 per average access
line in operation for the period as compared to $53 per average  access line for
the three months ended March 31, 1995.                                          

The Company recorded  $1,715,000 in connection and  subscription  fees and other
revenues of $546,000,  for the three months ended March 31, 1996.  Revenues were
offset in part by net interconnect  charges of $2,137,000 and $194,000,  for the
three months ended March 31, 1996 and 1995, respectively.                       

Operating and Maintenance Expenses                                              

Operating and maintenance  expenses increased by approximately $3.9 million,  or
381%,  primarily due to the inclusion of the full three month period  results in
1996 of Kelet-Nograd, Hungarotel and Papatel. Operating and maintenance expenses
per average  access line in operation for the period  decreased from $151 in the
three  months  ended March 31, 1995 to $73 for the three  months ended March 31,
1996.  This  decrease  resulted from the  achievement  by the Company of certain
productivity  improvements,  largely  resulting  from  decreased  use of  manual
switchboards and increased use of modern digital switches.                      

Item 2.     Management's Discussion and Analysis of Financial Condition and     
Results of Operations. (continued)                      

Depreciation and Amortization Expense                                           

Depreciation  expense  increased  $1,739,000,  or  381%,  primarily  due  to the
inclusion  of the full  three  month  period  results  in 1996 of  Kelet-Nograd,
Hungarotel  and Papatel  and  increased  property,  plant and  equipment  due to
acquisitions and  construction.  As the Company continues to add network assets,
depreciation and amortization expense will increase.                            

Management Fees                                                                 

Management  fees  payable to  Citizens  and TDI,  pursuant  to their  respective
management  agreements,  increased $617,000,  or 85%. The increase in management
fees  reflects the continued  commitment  of the parties  involved to supporting
management  infrastructure  and  assistance  required  to  control  accelerating
activities  and  growth,  and an  increase  in  certain  reimbursable  costs and
financing charges as provided under specific terms of the respective  agreements
relating to the payment of such fees.                                           

Loss from Operations                                                            

Loss from operations  increased $1,537,000 or 85%. This increase was principally
due to  the  additional  expenses  incurred  by the  Company  while  it  expands
management,  project  oversight,  engineering  design,  and systems  improvement
capacities  which  will be needed to  achieve  rapid  line  growth  and  revenue
increases, and provide for the introduction and control of new services.        

Foreign Exchange Losses                                                         

The Company's foreign exchange losses were  $1,412,000 for the three months     
ended March 31, 1996 as compared to foreign  exchange  gains of $322,000 for the
three months ended March 31, 1995. This increased expense occurred as the result
of the ongoing devaluation of the Hungarian forint against the US dollar and the
German  mark as  certain  of the  Company's  obligations,  including  loans  and
outstanding  vendor  contracts,  are denominated in US dollars and German marks.
The ongoing devaluation of the forint, approximately 1.2% per month based on the
Hungarian   government's   crawling  peg  devaluation  scheme,  will  result  in
additional  foreign  exchange  expenses  for the  foreseeable  future which will
increase  as  the  Company's  non-forint  denominated  obligations  continue  to
increase.                                                                       

Item 2.     Management's Discussion and Analysis of Financial Condition and     
Results of Operations. (continued)                      

The rate of devaluation  is  expected,  however,  to be lower  than the rate of 
inflation  which  regulates the increase in tariff rates charged by the Company,
during the next two years.                                                      

Net Interest Expense                                                            

Interest income increased $56,000, or 41%, primarily due to an increase in funds
on deposit for the period.                                                      

Interest expense increased $1,490,000,  or 609%, due to the additional financing
requirements  primarily used to pay for the  concession  area  acquisitions  and
construction  expenditures.  The Company  expects  that  interest  expense  will
increase in the future to the degree it  continues  to borrow  funds in order to
implement its capital expenditure plans.                                        

Other, net                                                                      

Other  income,  net,  increased  $211,000,  primarily  due  to the  sale  of the
Company's investment in Pilistav.                                               

Minority Interests                                                              

Minority  interests  represent the pro-rata share of net losses of  subsidiaries
for the period,  attributed to the  subsidiaries'  issued share capital that the
Company does not own. The balance sheet value of minority  interests  represents
such  pro-rata  share of net  assets  at March  31,  1996.  Minorities  exist in
Raba-Com, Kelet-Nograd Com, and Papatel, ranging between 20% and 35%.           

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Item 2.     Management's Discussion and Analysis of Financial Condition and     
Results of Operations. (continued)                      

Liquidity and Capital Resources                                                 

         On March 29, 1996, the Company  entered into a $75 million Secured Term
Loan Credit facility ("Credit  Facility") and, together with HTCC Consulting,  a
related Pledge and Security Agreement with Citicorp North America, Inc. Advances
under the Credit  Facility may be requested  through  December 31, 1996 and will
bear interest  rates of 3.5% and 6.5% above LIBOR or Citicorp's  announced  base
rate.  The Loan is repayable by December 31, 1996. On April 3, 1996, the Company
used  $50,753,000  from the Credit  Facility to repay all the funds  advanced or
guaranteed  by  Citizens  and  Chemical  Bank  pursuant  to  the  Citizens  Loan
Agreement;  accordingly,  in the  second  quarter,  the  Company  will  record a
non-cash  charge  of  approximately   $8  million   representing  the  remaining
unamortized deferred financing costs pertaining to the Citizens Loan Agreement. 

         The Company borrowed approximately $10.2 million from Citizens pursuant
to the Citizens  loan  agreement  and  approximately  $6.2 million from TDI. The
proceeds  from  these  borrowings  were  used  to pay  for  construction,  repay
short-term debt and other operating expenses.                                   

         The Company  experienced an increase in its working capital deficit due
to the use of short-term borrowings to finance construction.                    

         The Company has engaged an investment bank to serve as lead underwriter
for the  placement  of  approximately  $150  million in debt  securities  of the
Company, which is anticipated to close in mid-1996.                             

Through March 31, 1996,  the Company had an  accumulated      
deficit of approximately $31,959,000. Since March 1995, the Company has provided
telecommunications  services through its majority-owned  subsidiaries,  Raba-Com
and  Kelet-Nograd.  As of January  1,  1996,  the  Company  commenced  providing
telecommunications  services in the Papatel and  Hungarotel  Concessions  Areas.
While the revenues generated by the Company's telecommunications activities have
increased in each subsequent  quarterly period since March 31, 1995, in part due
to the increased number of lines placed in service during each such period,  the
Company is still  unprofitable  and is expected to remain so while it  completes
the modernization and construction of its telecommunications networks.          

         The  development  and  installation  of  the  network  in  each  of the
Company's  Concessions Areas requires  significant capital  expenditures.  These
expenditures,  together with  associated  operating  expenses,  will continue to
result in  substantial  cash flow  requirements  at least until a customer  base
large  enough  to  provide   sufficient  revenue  and  operating  cash  flow  is
established.                                                                    

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PART II.  OTHER INFORMATION                                                     

Item 6  Exhibits and Reports on Forms 8-K                                       

  (a)  Exhibits 10.60    Secured Term Loan Credit Facility between
                            Hungarian Telephone    and    Cable    Corp.
                         and    Citicorp    North    America, Inc.
                 et al. dated as of March 29, 1996

           Exhibits 10.61    Pledge    and    Security Agreement  dated as
                      of  March  29, 1996 between  Hungarian
                            Telephone and Cable Corp.,  HTCC  Consulting
                       Rt., and Citicorp  North  America, Inc.

(b)  Reports on Forms 8-K                                   

             The Company  filed on form 8-K dated  December 30, 1995,  under
             Item 2 "Acquisition  or Disposition of Assets" the  aquisitions
             of the operating assets in the Bekescasaba and Oroshaza service
areas in the Republic of Hungary                  

              The Company filed on form 8-K dated February 26, 1996, reporting
            the Third Agreement to Amend and Restate with CU CapitialCorp.

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 SIGNATURE

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this Report to
be signed on its behalf by the  undersigned  thereunto duly  authorized,  in the
City of New York, on the 15 th day of May 1996.                                 

HUNGARIAN TELEPHONE AND CABLE CORP.   
(Registrant)    

By: /s/ Frank R. Cohen                
---------------------           
Frank R. Cohen                  
     Treasurer and Chief Financial Officer

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 10-Q Filing	Date	First	Last	Other Filings

	3/31/95	5	10
	4/1/95	5	7
	7/1/95	8
	12/30/95	11
	12/31/95	4
	1/1/96	10
	2/26/96	11
	3/26/96	8
	3/29/96	8	11
For The Period Ended	3/31/96	1	10
	4/3/96	8	10
	4/30/96	2
	5/10/96	8
Filed On / Filed As Of	5/15/96
Corrected On	5/22/96
	12/31/96	8	10	10-K405, DEF 14A

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Hungarian Telephone & Cable Corp · 10-Q · For 3/31/96

Filed On 5/15/96 · SEC File 1-11484 · Accession Number 889949-96-2

Quarterly Report · Form 10-QFiling Table of Contents

10-Q · Quarterly ReportDocument Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Quarterly Report · Form 10-Q
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