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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to _____________________
COMMISSION FILE NUMBER: 0-20444
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PLD TELEKOM INC.
(Exact name of registrant as specified in its charter)
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DELAWARE APPLIED FOR
(State or other jurisdiction of incorporation of organization) (I.R.S. Employer Identification No.)
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1270 AVENUE OF THE AMERICAS, SUITE 2218, NEW YORK, NEW YORK 10020
(Address of principal executive offices and Zip Code)
(212) 218-1230
(Registrant's telephone number, including area code)
C/O PLD MANAGEMENT SERVICES LIMITED, 43 DOVER STREET, LONDON, ENGLAND W1X 3RE
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(Former name, former address and former fiscal year, if changed since last
report)
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 12 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 90 days. YES [ X ] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
COMMON STOCK, $.01 PAR VALUE - 31,731,034 SHARES (APRIL 28, 1997)
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PLD TELEKOM INC.
INDEX
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Page
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Part I Financial Information
Item 1. Financial Statements
Consolidated Condensed Statements of Operations (Unaudited) for the three months ended
March 31, 1997 and 1996 .................................................................... 1
Consolidated Condensed Balance Sheets (Unaudited) as at March 31, 1997 and
December 31, 1996 ......................................................................... 2
Consolidated Condensed Statements of Cash Flows (Unaudited) for the three months ended
March 31, 1997 and 1996 .................................................................... 3
Notes to Consolidated Condensed Financial Statements ....................................... 4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations .... 5
Part II Other Information .......................................................................... 11
Item 2. Changes in Securities .................................................................... 11
Item 4. Submission of Matters to a Vote of Security Holders ...................................... 17
Item 6. Exhibits and Reports on Form 8-K ......................................................... 17
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PLD TELEKOM INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31
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1997 1996
(Thousands of U.S. Dollars)
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REVENUES:
Telecommunications $ 23,380 $ 10,073
Finance lease income 511 111
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23,891 10,184
Direct costs (8,521) (3,096)
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Gross profit 15,370 7,088
OPERATING EXPENSES:
General and administrative 7,248 5,295
Depreciation 2,325 1,202
Amortization of telecommunications licenses and goodwill 2,028 1,183
Other taxes 1,288 395
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12,889 8,075
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Operating income/(loss) 2,481 (987)
Share of income /(loss) from equity investments (278) (379)
Interest and other income 1,142 855
Interest on bank indebtedness (299) (296)
Interest on long-term debt (3,970) --
Amortization of deferred financing costs (288) --
Loss on disposal of fixed assets (251) --
Foreign exchange gain /(loss) (39) 109
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Loss before income taxes and minority interest (1,502) (698)
Income taxes 1,074 828
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Loss before minority interest (2,576) (1,526)
Minority interest 1,766 97
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Net loss $ (4,342) $ (1,623)
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Net loss per common share $ (0.14) $ (0.05)
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</TABLE>
See accompanying notes to consolidated condensed financial statements.
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PLD TELEKOM INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
AS AT MARCH 31, 1997 AND DECEMBER 31, 1996
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<CAPTION>
March 31, December 31,
1997 1996
(Thousands of U.S. Dollars)
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 36,127 $ 40,674
Short-term investments 1,627 --
Trade receivables, net of allowances 12,589 10,528
Other receivables and prepaids 2,673 3,522
Inventory 1,681 1,840
Due from related parties 5,978 4,408
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60,675 60,972
Escrow funds 41,519 40,984
Property and equipment 104,260 93,039
Telecommunications licenses 70,333 72,310
Other investments 24,274 24,094
Other assets 14,721 14,958
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$ 315,782 $ 306,357
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank indebtedness $ 21,000 $ 15,829
Accounts payable and accrued liabilities 27,517 25,792
Due to related parties 5,405 4,039
Deferred revenue 1,348 1,078
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55,270 46,738
Long-term debt 111,328 107,954
Minority interest 15,477 13,711
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Shareholders' equity:
Capital stock:
Preferred shares 31 31
Common shares 180,973 180,878
Warrants 13,592 13,592
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194,596 194,501
Deficit (60,889) (56,547)
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133,707 137,954
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 315,782 $ 306,357
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</TABLE>
See accompanying notes to consolidated condensed financial statements.
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PLD TELEKOM INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31
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(Thousands of U.S. Dollars) 1997 1996
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Cash Provided by/(Used in):
Operations:
Net loss $ (4,342) $ (1,623)
Non cash items
Depreciation and amortization 4,641 2,385
Share of loss of equity investments 278 379
Non-cash interest on long-term debt 3,375 --
Minority interest 1,766 97
Other 251 --
Deferred revenue 270 94
Changes in non-cash working capital 470 (2,249)
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6,709 (917)
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FINANCING:
Change in bank indebtedness 5,171 9,134
Short-term investments (1,627) --
Issue of common shares 95 --
Loans from shareholders -- (324)
Related company advances -- 762
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3,639 9,572
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INVESTMENTS:
Property and equipment (13,902) (4,344)
Escrow funds (535) --
Other investments (458) --
Investment in Teleport -- 333
Reduction of lease receivable -- 1,135
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(14,895) (2,876)
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Increase / (decrease) in cash and cash equivalents (4,547) 5,779
Cash and cash equivalents, beginning of period 40,674 15,676
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Cash and cash equivalents, end of period $ 36,127 $ 21,455
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</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
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PLD TELEKOM INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(1) BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements are
unaudited and have been prepared by PLD Telekom Inc. (the "Company") pursuant to
the rules and regulations of the Securities and Exchange Commission (the "SEC").
In the opinion of management, the financial statements include all adjustments
(consisting primarily of normal recurring accruals) necessary to present fairly
the results of operations, financial position and cash flows of the Company as
at March 31,1997 and for the three months ended March 31, 1997 and 1996.
Certain information and footnote disclosures generally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such SEC rules and
regulations. Results for the interim period are not necessarily indicative of
the results for a full year.
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996.
(2) CONTINUANCE OF THE COMPANY IN DELAWARE
On February 27, 1997, the shareholders of the Company at a special
meeting of shareholders approved a resolution authorizing the Company to
continue as a Delaware corporation under the Delaware General Corporation Law
and simultaneously discontinue the Company's existence in Ontario under the
Business Corporations Act (Ontario). The continuance was effective as of
February 28, 1997. The Company's reasons for the continuance to Delaware
included: (a) the Company's principal sources of capital are located outside
Canada and primarily in the U.S.; (b) a substantial majority of its
shareholders are not Canadian residents; (c) Canadian residency requirements
for a majority of a corporation's directors under Ontario law that inhibited
the Company's ability to diversify the composition of its board of directors;
(d) the Company's belief that being incorporated in the U.S. will facilitate
access to the U.S. capital markets and U.S. government financing programs
administered by U.S. government agencies for the benefit of U.S. companies; and
(e) tax advantages to U.S. shareholders by the Company ceasing to be classified
as a "passive foreign investment company" under the Internal Revenue Code of
1986, as amended.
Following the continuance, the Company's financial statements are now
prepared in accordance with accounting principles generally accepted in the
United States (U.S. GAAP). The comparative figures for the three month period
ended March 31, 1996 were previously prepared in accordance with accounting
principles generally accepted in Canada (Canadian GAAP). As a consequence of
the continuance to Delaware, the comparative figures have been restated in
accordance with U.S. GAAP.
(3) FUTURE ACTIVITIES
The Company's telecommunications businesses are developing rapidly in
an emerging economy which, by its nature, has an uncertain economic, political
and regulatory environment. The general risks of operating businesses in the
former Soviet Union include the possibility for rapid change in government
policies, economic conditions, the tax regime and foreign currency regulations.
In addition, Teleport-TP's satellite-based long distance network is at an early
stage of its development and operation.
Ultimate recoverability of the Company's investments in its operating
subsidiaries, PeterStar Company Limited ("PeterStar"), Baltic Communications
Limited ("BCL"), BECET International ("BECET"), and Teleport-TP ("Teleport") is
dependent upon each of these subsidiaries achieving and maintaining
profitability, which is dependent to a certain extent on the stabilization of
the economies of the former Soviet Union, the ability to maintain the necessary
telecommunications licenses and the ability to obtain adequate financing to meet
capital commitments.
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(4) RESTRICTED CASH
Cash and cash equivalents includes cash on deposit of approximately
$24.8 million which secures demand bank indebtedness in the amount of $21
million and to secure overdraft balances and accounts payable of Technocom
Limited ("Technocom"). Technocom has demand bank loans of $21 million which are
secured by term deposits in the same amount held at the same bank.
(5) CONTINGENCIES
(a) The Company has paid certain costs on behalf of, and made certain loans to,
PeterStar, resulting in an intercompany balance of approximately $26.2 million
at March 31, 1997. The Company is negotiating with the minority shareholders of
PeterStar to determine the manner in which the Company will be reimbursed for
these costs. To date, agreement has been reached with the minority shareholders
to recapitalize PeterStar in an amount of $14.5 million, such funds to be used
to repay an equal amount of the advances. A further $4.2 balance is covered by
short-term loan agreements, and negotiations continue as to the mechanism of
repayment of the remaining approximately $7.5 million.
(b) Under applicable Russian currency control regulations, the
Company's subsidiaries are required to have certain licenses from the Central
Bank of Russia to enable them to make payments of and accept receipts of hard
currency. While PeterStar and BCL have applied for all the necessary licenses,
some have been received and others are outstanding. Failure to receive the
necessary licenses could result in significant fines and penalties.
(c) Certain of the Company's Russian subsidiaries have accrued profits
and other taxes based on interpretations of the law which may ultimately be
disputed by the Russian taxation authorities. The exposure to additional profits
and other taxes, fines and penalties is not determinable.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This document contains certain forward-looking statements that are
subject to risks and uncertainties. Forward-looking statements include certain
information relating to political, social and economic conditions in the
countries of the former Soviet Union and the Commonwealth of Independent States,
the commencement of certain programs and the proposed offering of certain
services by the Company's operating subsidiaries, proposed changes in the
Company's corporate structure and centers of operations and interpretations and
actions of certain regulatory authorities, including in the United States,
Canada, Russia and Kazakstan, as well as information contained elsewhere in this
Report where statements are preceded by, followed by or include the words
"believes," "expects," "anticipates," and similar expressions. For such
statements the Company claims the protection of the safe harbor for
forward-looking statements contained in the private Securities Litigation Reform
Act of 1995. Actual events or results may differ materially from those discussed
in forward-looking statements as a result of various factors, including without
limitation, those discussed elsewhere in this Report.
Except as otherwise indicated, all references to 1996 and 1997 refer to
the quarter ended on March 31 of those years respectively.
BASIS OF PRESENTATION
The Company's key interests at March 31, 1997 include a 60% equity
interest in PeterStar, which provides telecommunication services in St.
Petersburg, Russia; a 50% equity interest in BECET, which provides
cellular services in Kazakstan; and a 51% equity interest in Technocom which,
through its 49% equity interest in Teleport, operates an international teleport
in Moscow, fiber optic networks in Moscow and its environs and a
satellite-based long distance network across
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Russia. The consolidated financial information for the first quarter of 1997
differs from the first quarter of 1996 by reflecting: (i) the Company's
acquisition of 100% of the outstanding shares of BCL in April 1996; and (ii) the
acquisition by Technocom of a controlling voting interest in Teleport effective
December 31, 1996. Teleport is now accounted for as a subsidiary rather than
using the equity method.
Effective February 28, 1997, the Company was continued as a Delaware
corporation and as a result its financial statements are now prepared in
accordance with U.S. GAAP. The interim financial statements for the three
months ended March 31, 1996 were prepared in accordance with Canadian GAAP. As
a consequence of the continuance to Delaware, the financial statements for this
comparative period have been restated in accordance with U.S. GAAP. The most
substantial difference between Canadian and U.S. GAAP in the case of the
Company is that U.S. GAAP does not permit the capitalization of pre-operating
costs of PeterStar and BECET.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 VERSUS THREE MONTHS ENDED MARCH 31, 1996
PLD TELEKOM INC. -- CONSOLIDATED
Overview. The Company reported a net loss of $4.3 million, or $0.14
per share, and operating income of $2.5 million, on total revenues of $25.0
million, for the three months ended March 31, 1997, compared with a net loss
of $1.6 million, or $0.05 per share, and an operating loss of $1.0 million, on
total revenues of $11.0 million during the same period in 1996. EBITDA
increased 295% to $6.3 million for the three months ended March 31, 1997 from
$1.6 million for the same period in 1996. The increase in net loss is due
primarily to the interest charge on long-term debt for the quarter of $4.0
million. No such cost was incurred in the same period of 1996.
Revenues. Consolidated operating revenue increased by 135% to $23.9
million forthe three months ended March 31, 1997 from $10.2 million for the
same period in 1996. This increase is attributable primarily to strong
revenue growth in PeterStar and BECET, and the consolidation of revenue from
BCL as of April 1, 1996 and from Teleport as of January 1, 1997.
Direct costs. Direct costs increased 175% to $8.5 million for the three
months ended March 31, 1997 from $3.1 million for the same period in 1996.
Direct costs as a percentage of revenue were 35.7% compared with 30.4%. This
increase in direct costs as a percentage of revenue is attributable primarily
to the inclusion of Teleport during the period, which had direct costs of $2.4
million on sales of $4.0 million (60%). Removing the impact of including
Teleport's costs, direct costs in the remaining businesses have remained
relatively constant at 30.7% of total revenue.
General and administrative costs. General and administrative costs
include the day-to-day expenses in all subsidiary operations as well as
corporate expenses. General and administrative costs increased by 36.9% to $7.2
million in the three months ended March 31, 1997 from $5.3 million in the same
period in 1996, reflecting the continued growth in the scale and extent of the
operating businesses, the acquisition of BCL (which added $0.6 million) and
Technocom's acquisition of a controlling stake in Teleport (which added $0.7
million). Excluding BCL and Teleport,
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general and administrative expenses rose by 11.3 %, which reflects the growth in
the operations of the operating subsidiaries.
Depreciation. Depreciation increased 93 % to $2.3 million during the
three months ended March 31, 1997 from $1.2 million during the same period in
1996, reflecting an increase in the asset base of approximately 115% between
March 31, 1996 and March 31, 1997. The increase in asset base is due primarily
to further capital expenditure as the build out of the PeterStar and BECET
networks continues, as well as the inclusion of BCL and Teleport.
Amortization. The Company continues to amortize the difference
between the purchase price and the fair value of the net assets acquired
for its interests in PeterStar, BECET, and, as of January 1,1997, Teleport on
a straight line basis. The charge for the three months ended March 31, 1997
was $2.0 million compared to $ 1.2 million for the same period in 1996.
Amortization for Teleport of $0.5 million for the period ended March 31, 1996
was included in share of income/(loss) from equity investments, as Teleport
was accounted for by the equity method. As of January 1, 1997, the results of
Teleport are consolidated, and therefore amortization of the Teleport license
is included in amortization of telecommunications licenses and goodwill.
Interest and other income. On June 12, 1996, the Company completed a
$149.5 million private placement (the "June 1996 Placement") consisting of (i)
123,000 units consisting of $123 million aggregate principal amount at stated
maturity of 14% Senior Discount Notes due 2004 (the "Senior Notes"), together
with Warrants to purchase a total of 4,182,000 Common Shares; and (ii) $26.5
million aggregate principal amount of 9% Convertible Notes (the "Convertible
Notes"). Under the terms of the June 1996 Placement, $46 million was deposited
into an escrow account for subsequent disbursement into telecommunications
equipment or telecommunications companies in Russia and Kazakstan. All funds
yet to be disbursed continue to be invested in short-term reverse
repurchase agreements secured by U.S. treasury bonds. These investments,
together with interest earned on other cash deposits and miscellaneous other
income, produced total interest and other income for the three months ended
March 31, 1997 of $1.1 million. Interest and other income in the comparative
period in 1996 of $0.9 million was comprised mainly of other investment income.
Interest on long term debt. The debt instruments issued in the June
1996 Placement represent entirely new indebtedness of the Company and resulted
in an interest charge on long term debt of $4.0 million for the three months
ended March 31, 1997, consisting of non-cash interest accruals on the Senior
Notes of $3.4 million and accrued interest on the Convertible Notes of $0.6
million. The next interest payment on the Convertible Notes is due on June 1,
1997.
Income taxes. The income tax charge for the three months ended March
31, 1997 was $1.1 million compared with $0.8 million during the same period in
1996. The provision for income taxes relates substantially to current income
taxes in the Company's Russian and Kazak businesses and reflects the improved
profitability of these subsidiaries.
PETERSTAR
PeterStar had net income of $3.1 million and an operating profit of $3.7
million on operating revenues of $10.0 million for the three months ended March
31, 1997, compared to net income of $1.1 million and an operating profit of
$1.6 million on operating revenues of $6.1 million for the same period in 1996.
EBITDA increased 87% to $4.3 million for the three months ended March 31, 1997
from $2.3 million for the same period in 1996. The 64% increase in operating
revenues reflects a 112% increase in line penetration from approximately 29,000
at March 31, 1996 to approximately 62,000 at March 31, 1997. PeterStar's
average revenue per line has decreased as its customer base is shifting from
the high margin niche market of international joint ventures to a lower margin
predominantly Russian business market. General and administrative costs in
PeterStar remained constant at $1.6 million.
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31, 1997, compared to the first quarter of 1996.
TECHNOCOM
Technocom had a net loss of $0.6 million and an operating loss of
$0.2 million on operating revenues of $6.1 million for the three months ended
March 31, 1997, compared to net income of $0.1 million and an operating loss of
$0.2 million on operating revenues of $0.2 million for the same period in
1996.The increase in operating revenues was derived primarily from the
consolidation of Teleport in the financial statments of Technocom.
Teleport had a net loss and operting loss $ 0.3 million on operating
revenues of $5.1 million for the three months ended March 31, 1997. EBITDA was
$0.1 million for the same period. Teleport financial results were not
consolidated during the same period in 1996.
BECET
BECET had net income of $1.4 million and an operating profit of $1.5
million on operating revenues of $6.1 million for the three months ended March
31, 1997, compared to net income of $0.1 million and an operating profit of
$0.3 million on operating revenues of $3.8 million for the same period in 1996.
EBITDA increased to $2.4 million for the three months ended March 31, 1997 from
$1.0 million for the same period in 1996. The 61% increase in operating
revenues is attributable to an increase in the number of BECET's subscribers
from 2,882 at March 31, 1996 to 7,620 at March 31, 1997. As with PeterStar, the
average revenue per line has decreased as BECET's customer base increasingly
consists of Kazak businesses and individuals rather than foreign joint
ventures. General and administrative expenses remained constant in the three
months ended March 31,1997 at $1.8 million compared to the same period in 1996.
During April 1997, it was reported that the Daewoo Corporation
("Daewoo") of South Korea had won through a tender process a 40% stake in
Kazaktelekom, the state owned entity which operates the national public
telephone network in Kazakstan. The Company and Kazaktelekom each own 50% of
BECET. The Company is not yet in a position to assess the impact of this sale
on its business, but a significant change in the government's attitude toward
BECET or the management direction of Kazaktelekom could have a material adverse
effect on the Company
BCL
BCL had net income of $0.5 million and an operating profit of $0.3
million on operating revenues of $1.8 million for the three months ended March
31, 1997. EBITDA was $0.9 million for the same period. BCL was not owned by
the Comapny during the same period in 1996.
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LIQUIDITY AND CAPITAL RESOURCES
The Company continues to focus on the emerging telecommunications
markets in the Russian Federation and Kazakstan. Investment in
telecommunications assets, property and equipment has continued during the first
three months of 1997. Capital expenditures during the quarter ended March 31,
1997 can be summarized as follows:
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CAPITAL EXPENDITURE
COMPANY IN PERIOD EXPLANATION
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PeterStar $3.9 million New switching equipment and transmission capacity
BECET $0.6 million Investment in cellular telecommunications network and
related support infrastructure.
Technocom $9.1 million Expenditures on Teleport expansion
</TABLE>
Capital expenditures are financed through a combination of cash balances
existing at the beginning of 1997, each subsidiary's own internally generated
cash flow, bank or supplier financing, equipment leasing arrangements between
the Company and the subsidiary, intercompany debt arrangements, and by the
escrow funds from the June 1996 Placement.
Effective February 28, 1997, the Company continued from Ontario into
Delaware and, in connection therewith, is in the process of moving its executive
offices to the United States. The benefits of the continuance are anticipated to
include improved access to the U.S. capital markets, reduced costs of financing
and streamlining of management and operations. The costs of the continuance,
including the costs of changing the jurisdiction of incorporation of the Company
and those involved in setting up executive offices in the United States, are not
expected to exceed $1 million. In addition, upon the change of jurisdiction, the
Company became potentially subject to two distinct tax charges as a consequence
of ceasing to be an Ontario corporation: (i) it will be deemed to have disposed
of all of its assets at their fair market value as of the date of continuance
and the Canadian federal tax authorities will assess tax on any income and net
taxable capital gains arising thereby; and (ii) it will be subject to an
additional tax on the amount by which the fair market value of the Company's
assets, net of liabilities, exceeds the paid-up capital of the Company's issued
and outstanding shares at a rate (based on certain factual assumptions) of 5%.
Based on management's analysis and advice received to date, the Company believes
that no tax will be due. However, there can be no assurance that the Canadian
federal tax authorities will conclude that no Canadian federal taxes are due as
a result of the continuance or that the amount of Canadian federal taxes claimed
or found to be due will not be significant.
The Company's consolidated balance sheet at March 31, 1997 reflects
total assets of $315.8 million, as compared to $306.4 million at December 31,
1996. Total assets at March 31, 1997 were comprised of $60.7 million in current
assets (including $36.1 million of cash and cash equivalents), $104.3 million in
property and equipment, $70.3 million in telecommunications licenses related to
PeterStar, BECET and Teleport,other assets and investments of $39.0 million and
escrow funds of $41.5 million. The escrow funds were acquired as part of the
net proceeds of the June 1996 Placement and are to be disbursed principally for
telecommunications equipment to be used in PeterStar and Technocom's operating
subsidiaries and for the development of new value added services. Total
indebtedness of $132.3 million as a percentage of total assets, was 41.9% at
March 31, 1997. The corresponding figures at December 31, 1996 were $123.8
million and 40.4%.
Shareholders equity of $133.7 million at March 31, 1997 consisted of
$181.0 million in common shares and $13.6 million ascribed to the Warrants
issued in the June 1996 Placement, offset by the Company's deficit of $60.9
million. The Company's ratio of total indebtedness to equity at March 31, 1997
was 99.0% compared with 89.7% at December 31, 1996.
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At March 31, 1997 the Company had a working capital surplus of $5.4
million reflecting the unexpended portion of the net proceeds of the June 1996
Placement which were not placed in escrow. This compares to a working capital
surplus of $14.2 million at December 31, 1996. The working capital and escrow
funds, which totaled $46.9 million (after subtracting bank indebtedness at
March 31, 1997), are to be used to implement the business plans of the operating
subsidiaries into 1998, although the Company's ability to access these funds
freely is restricted since the funds in escrow can only be accessed after
compliance with a number of conditions, including ensuring that the funds are
only used for certain designated purposes and that certain safeguards are in
place.
To the extent that: (i) actual cash flows from operations are below the
Company's estimates as a result of lower than expected revenues per line or
higher operating costs; or (ii) development costs of the build-out of the
PeterStar, BECET and Teleport networks exceed current estimates, the
Company may be required to seek additional debt or equity financing. There can
be no assurance that such financing will be available, or that it can be
obtained on equal or more favorable terms than current financing arrangements.
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PART II
OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
The continuance of the Company from Ontario and its domestication in
Delaware (the "Continuance") effected a change in the legal domicile of the
Company as of February 28, 1997 (the "Effective Date"). As of the Effective
Date, holders of Common Shares, without par value, Series II Convertible
Preferred Shares, without par value, and Series III Convertible Preferred
Shares, without par value, of the Company, then a corporation organized under
the Business Corporations Act (Ontario) (the "OBCA") continued to hold one share
of Common Stock, par value $0.01, Series II Convertible Stock, par value $0.01,
and Series III Convertible Preferred Stock, par value $0.01, of the Company, a
corporation organized under the Delaware General Corporation Law (the "DGCL")
for each share held prior to the Effective Date. The principal attributes of the
Company's capital stock immediately prior to and following the Effective Date
remained identical, other than differences in shareholders' rights under the
OBCA and DGCL. Existing share certificates were not canceled. Holders of options
to purchase the Company's Common Shares on the Effective Date continued to hold
options to purchase an identical number of shares of the Company's Common Stock
on substantially the same terms. Similarly, holders of warrants to purchase the
Company's Common Shares continued to hold warrants to purchase an identical
number of shares of the Company's Common Stock on substantially the same terms.
Upon the Effective Date, the Company became subject to the jurisdiction of
the State of Delaware and the DGCL, and simultaneously ceased to be subject to
the jurisdiction of the Province of Ontario and the OBCA. However, the Company
retained its original incorporation date under the OBCA for purposes of the
DGCL. In addition, Section 388 of the DGCL provides explicitly that the
Continuance shall not be deemed to affect any obligations or liabilities of the
Company incurred prior to the Effective Date.
The following is a summary of the material differences between the rights
of holders of the capital stock of the Company after the Effective Date and the
rights of holders of shares of the Company prior to the Effective Date. These
differences arise from differences between United States and Canadian securities
laws, between the DGCL and the OBCA, and between the Company's Articles of
Incorporation under the OBCA prior to the Effective Date (the "Articles") and
the Company's Certificate of Incorporation and By-Laws as in effect under the
DGCL as of the Effective Date. THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE OBCA, THE DGCL, THE ARTICLES OF THE COMPANY AND THE BY-LAWS OF
THE COMPANY PRIOR TO THE EFFECTIVE DATE, AND THE CURRENT CERTIFICATE OF
INCORPORATION AND THE BY-LAWS OF THE COMPANY.
VOTE REQUIRED FOR EXTRAORDINARY TRANSACTIONS
Under the OBCA, certain extraordinary corporate actions, such as certain
amalgamations, continuances, sales, leases or exchanges of all the assets of a
corporation other than in the ordinary course of business, and other
extraordinary corporate actions such as liquidations, dissolutions and (if
ordered by a court) arrangements, are required to be approved by special
resolution. A special resolution is a resolution passed by not less than
two-thirds of the votes cast by the shareholders entitled to vote on the
resolution. In certain cases, a special resolution to approve an extraordinary
corporate action is also required to be approved separately by the holders of a
class or series of shares.
The DGCL requires the affirmative vote of a majority of the outstanding
stock entitled to vote thereon to authorize any merger, consolidation,
dissolution or sale of substantially all of the assets of a corporation, except
that, unless required by its certificate of incorporation, no authorizing
stockholder vote is required of a corporation surviving a merger if: (i) such
corporation's certificate of incorporation is not amended in any respect by the
merger; (ii) each share of stock of such corporation outstanding immediately
prior to the effective date of the merger will be an identical outstanding or
treasury share of the surviving corporation after the effective date of the
merger; and (iii) either no shares
11
<PAGE> 14
of common stock, including securities convertible into common stock will be
issued in the merger or the number of shares of common stock to be issued in the
merger does not exceed 20% of such corporation's outstanding common stock
immediately prior to the effective date of the merger. The Certificate of
Incorporation does not require such a vote. Stockholder approval is also not
required under the DGCL for mergers or consolidations in which a parent
corporation merges or consolidates with a subsidiary of which it owns at least
90% of the outstanding shares of each class of stock. Finally, unless required
by its certificate of incorporation, stockholder approval is not required under
the DGCL for a corporation to merge with or into a direct or indirect
wholly-owned subsidiary of a holding company (as defined in the DGCL) in certain
circumstances. The Certificate of Incorporation does not require such a vote.
The Company currently does not have a shareholders' rights plan.
Shareholders' rights plans, in a variety of forms, are common to many
corporations incorporated in the United States and serve to afford a
corporation's board of directors the opportunity to withstand an unsolicited
takeover attempt while providing the board of directors sufficient time to
evaluate the offer and its adequacy and to consider alternative measures or
transactions that may be appropriate in responding to the offer. The DGCL
permits shareholders' rights plans in general and permits the adoption of
shareholders' rights plans by a board of directors without shareholder approval.
AMENDMENT TO GOVERNING DOCUMENTS
Under the OBCA, any amendment to the Articles generally requires the
approval by special resolution, which is a resolution passed by a majority of
not less than two-thirds of the votes cast by shareholders entitled to vote on
the resolution. Under the OBCA, unless the articles or by-laws otherwise
provide, the directors may, by resolution, make, amend or repeal any by-law that
regulates the business or affairs of a corporation. Where the directors make,
amend or repeal a by-law, they are required under the OBCA to submit the by-law,
amendment or repeal to the shareholders at the next meeting of shareholders, and
the shareholders may confirm, reject or amend the by-law, amendment or repeal by
an ordinary resolution, which is a resolution passed by a majority of the votes
cast by shareholders present and entitled to vote on the resolution.
The DGCL requires a vote of the corporation's board of directors followed
by the affirmative vote of a majority of the outstanding stock of each class
entitled to vote for any amendment to the corporation's certificate of
incorporation, unless a greater level of approval is required by the certificate
of incorporation. The Certificate of Incorporation does not require a greater
level of approval for an amendment thereto. If an amendment alters the powers,
preferences or special rights of a particular class or series of stock so as to
affect them adversely, that class or series shall be given the power to vote as
a class notwithstanding the absence of any specifically enumerated power in the
certificate of incorporation. The DGCL also states that the power to adopt,
amend or repeal the by-laws of a corporation resides in the stockholders
entitled to vote, provided that the corporation in its certificate of
incorporation may confer such power on the board of directors in addition to the
stockholders. The Certificate of Incorporation expressly authorizes the board of
directors to adopt, amend or repeal PLD Delaware's By-Laws.
DISSENTERS' RIGHTS
The OBCA provides that shareholders of an OBCA corporation entitled to
vote on certain matters are entitled to exercise dissent rights and to be paid
the fair value of their shares in connection therewith. The OBCA does not
distinguish for this purpose between listed and unlisted shares. Such matters
include: (i) any amalgamation with another corporation (other than with certain
affiliated corporations); (ii) an amendment to the corporation's articles to
add, change or remove any provisions restricting the issue, transfer or
ownership of shares; (iii) an amendment to the corporation's articles to add,
change or remove any restriction upon the business or businesses that the
corporation may carry on or upon the powers that the corporation may exercise;
(iv) a continuance under the laws of another jurisdiction; (v) a sale, lease or
exchange of all or substantially all the property of the corporation other than
in the ordinary course of business; (vi) a court order permitting a shareholder
to dissent in connection with an application to the court for an order approving
an arrangement proposed by the corporation; or (vii) certain amendments to the
articles of a corporation which require a separate class or series vote,
provided that a shareholder is not entitled to dissent if an amendment to the
articles is effected by a court order approving a reorganization or by a court
order made in connection with an action
12
<PAGE> 15
for an oppression remedy. Under the OBCA, a shareholder may, in addition to
exercising dissent rights, seek an oppression remedy for any act or omission of
a corporation which is oppressive or unfairly prejudicial to or that unfairly
disregards a shareholder's interest.
Under the DGCL, holders of shares of any class or series have the right,
in certain circumstances, to dissent from a merger or consolidation by demanding
payment in cash for their shares equal to the fair value (excluding any
appreciation or depreciation as a consequence, or in expectation, of the
transaction) of such shares, as determined by agreement with the corporation or
by an independent appraiser appointed by a court in an action timely brought by
the corporation or the dissenters. The DGCL grants dissenters' appraisal rights
only in the case of mergers or consolidations and not in the case of a sale or
transfer of assets or a purchase of assets for stock regardless of the number of
shares being issued. Further, no appraisal rights are available for shares of
any class or series listed on a national securities exchange or designated as a
national market system security on the Nasdaq National Market or held of record
by more than 2,000 stockholders unless the agreement of merger or consolidation
converts such shares into anything other than: (i) stock of the surviving
corporation; (ii) stock of another corporation which is either listed on a
national securities exchange or designated as a national market system security
on the Nasdaq National Market or held of record by more than 2,000 stockholders;
(iii) cash in lieu of fractional shares; or (iv) any combination of (i), (ii) or
(iii) above. In addition, dissenter's rights are not available for any shares of
the surviving corporation if the merger did not require the vote of the
stockholders of the surviving corporation.
OPPRESSION REMEDY
The OBCA provides an oppression remedy that enables the court to make any
order, both interim and final, to rectify the matters complained of, if the
Director appointed under Section 278 of the OBCA or the Ontario Securities
Commission is satisfied upon application by a complainant (as defined below)
that: (i) any act or omission of the corporation or an affiliate effects or
threatens to effect a result; (ii) the business or affairs of the corporation or
an affiliate are, have been or are threatened to be carried on or conducted in a
manner; or (iii) the powers of the directors of the corporation or an affiliate
are, have been or are threatened to be exercised in a manner; that is oppressive
or unfairly prejudicial to, or that unfairly disregards the interest of, any
security holder, creditor, director or officer of the corporation. A complainant
includes: (a) a present or former registered holder or beneficial owner of
securities of a corporation or any of its affiliates; (b) a present or former
officer or director of the corporation or any of its affiliates; and (c) any
other person who in the discretion of the court is a proper person to make such
application.
Because of the breadth of the conduct which can be complained of and the
scope of the court's remedial powers, the oppression remedy is very flexible and
is frequently relied upon to safeguard the interest of shareholders and other
complainants with a substantial interest in the corporation. Under the OBCA, it
is not necessary to prove that the directors of a corporation acted in bad faith
in order to seek an oppression remedy. Furthermore, the court may order the
corporation to pay the interim expenses of a complainant seeking an oppression
remedy, but the complainant may be held accountable for such interim costs on
final disposition of the complaint (as in the case of a derivative action).
The DGCL does not provide for a similar remedy. However, the DGCL provides
a variety of legal and equitable remedies to a corporation's stockholders for
improper acts or omissions of a corporation, its officers and directors. Under
the DGCL, only stockholders can bring an action alleging a breach of fiduciary
duty by the directors of a corporation. In order to be successful, the
stockholder must overcome the "business judgment rule," which simply stated
means that absent a showing of intentional misconduct, gross negligence or a
conflict of interest, disinterested directors' decisions are presumed by the
courts to have been made in good faith and in the best interests of the
corporation.
DERIVATIVE ACTION
Under the OBCA, a complainant may apply to the court for leave to bring an
action in the name of and on behalf of a corporation or any subsidiary, or to
intervene in an existing action to which any such body corporate is a party, for
the purpose of prosecuting, defending or discontinuing the action on behalf of
the body corporate. Under the OBCA, no action may be brought and no intervention
in an action may be made unless the complainant has given 14 days'
13
<PAGE> 16
notice to the directors of the corporation or its subsidiary of the
complainant's intention to apply to the court and the court is satisfied that:
(i) the directors of the corporation or its subsidiary will not bring,
diligently prosecute or defend or discontinue the action; (ii) the complainant
is acting in good faith; and (iii) it appears to be in the interest of the
corporation or its subsidiary that the action be brought, prosecuted, defended
or discontinued. Where a complainant makes an application without having given
the required notice, the OBCA permits the court to make an interim order pending
the complainant giving the required notice, provided that the complainant can
establish that at the time of seeking the interim order it was not expedient to
give the required notice.
Under the OBCA, the court in a derivative action may make any order it
thinks fit including, without limitation: (i) an order authorizing the
complainant or any other person to control the conduct of the action; (ii) an
order giving directions for the conduct of the action; (iii) an order directing
that any amount adjudged payable by a defendant in the action shall be paid, in
whole or in part, directly to former and present security holders of the
corporation or its subsidiary instead of to the corporation or its subsidiary;
and (iv) an order requiring the corporation or its subsidiary to pay reasonable
legal fees and any other costs reasonably incurred by the complainant in
connection with the action. Additionally, under the OBCA, a court may order a
Company or its subsidiary to pay the complainant's interim costs, including
reasonable legal fees and disbursements. Although the complainant may be held
accountable for the interim costs on final disposition of the complaint, it is
not required to give security for costs in a derivative action.
A derivative action may be brought in Delaware by a stockholder on behalf
of, and for the benefit of, the corporation. The DGCL provides that a
stockholder must aver in the complaint that he or she was a stockholder of the
corporation at the time of the transaction of which he or she complains. A
stockholder may not sue derivatively unless he or she first makes demand on the
corporation that it bring suit and such demand has been refused, unless it is
shown that such demand would have been futile.
SHAREHOLDER CONSENT IN LIEU OF MEETING
Under the OBCA, shareholder action without a meeting may only be taken by
written resolution signed by all shareholders who would be entitled to vote
thereon at a meeting.
Under the DGCL, unless otherwise provided in the certificate of
incorporation, any action required to be taken or which may be taken at an
annual or special meeting of stockholders may be taken without a meeting if a
consent in writing is signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize such
action at a meeting at which all shares entitled to vote were present and voted.
The Certificate of Incorporation does not provide otherwise. The corporation is
required to give prompt notice of the taking of the corporate action to
stockholders who have not consented in writing.
DIRECTOR QUALIFICATIONS
A majority of the directors of an OBCA corporation generally must be
resident Canadians, but where a corporation has only one or two directors, that
director or one of the two directors, as the case may be, must be a resident
Canadian.
The OBCA also requires that at least one-third of the directors of a
corporation whose securities are publicly traded must not be officers or
employees of the Company or any of its affiliates.
The DGCL does not have comparable requirements.
FIDUCIARY DUTIES OF DIRECTORS
Directors of corporations incorporated or organized under the OBCA and the
DGCL have fiduciary obligations to the corporation and its shareholders.
Pursuant to these fiduciary obligations, the directors must act in accordance
with the so-called duties of "due care" and "loyalty."
14
<PAGE> 17
Pursuant to section 134 of the OBCA, the duty of loyalty requires
directors of an Ontario corporation to act honestly and in good faith with a
view to the best interests of the corporation, and the duty of care requires
that the directors exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances.
Under the DGCL, the duty of care requires that the directors act in an
informed and deliberative manner and to inform themselves, prior to making a
business decision, of all material information reasonably available to them. The
duty of loyalty may be summarized as the duty to act in good faith, not out of
self-interest, and in a manner which the directors reasonably believe to be in
the best interest of the stockholders pursuant to the "business judgment rule."
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Under the OBCA and pursuant to the Company's By-Laws, the Company may
indemnify a director or officer, a former director or officer or a person who
acts or acted at the Company's request as a director or officer of a body
corporate of which the Company is or was a shareholder or creditor, and his or
her heirs and legal representatives (an "Indemnifiable Person"), against all
costs, charges and expenses, including an amount paid to settle an action or
satisfy a judgement, reasonably incurred by him or her in respect of any civil,
criminal or administrative action or proceeding to which he or she is made a
party by reason of being or having been a director or officer of the Company or
such body corporate if: (i) he or she acted honestly and in good faith with a
view to the best interest of the Company; and (ii) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty, he
or she had reasonable grounds for believing that his or her conduct was lawful.
An Indemnifiable Person is entitled to such indemnity from the Company if he or
she was substantially successful on the merits in his or her defense of the
action or proceeding and fulfilled the conditions set out in (i) and (ii),
above. A corporation may, with the approval of a court, also indemnify an
Indemnifiable Person in respect of an action by or on behalf of the corporation
or such body corporate to procure a judgment in its favor, to which such person
is made a party by reason of being or having been a director or an officer of
the corporation or body corporate, if he or she fulfils the conditions set out
in (i) and (ii), above.
The DGCL permits a corporation to indemnify any of its directors or
officers who was or is a party, or is threatened to be made a party to any third
party proceeding by reason of the fact that such person is or was a director or
officer of the corporation, against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, if such
person acted in good faith and in a manner such person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reason to believe that such person's
conduct was unlawful. In a derivative action, i.e., one by or in the right of
the corporation, the corporation is permitted to indemnify directors and
officers against expenses (including attorneys' fees) actually and reasonably
incurred by them in connection with the defense or settlement of an action or
suit if they acted in good faith and in a manner that they reasonably believed
to be in or not opposed to the best interests of the corporation, except that no
indemnification shall be made if such person shall have been adjudged liable to
the corporation, unless and only to the extent that the court in which the
action or suit was brought shall determine upon application that the defendant
directors or officers are fairly and reasonably entitled to indemnity for such
expenses despite such adjudication of liability.
The DGCL allows for the advance payment of an indemnitee's expenses prior
to the final disposition of an action, provided that the indemnitee undertakes
to repay any such amount advanced if it is later determined that the indemnitee
is not entitled to indemnification with regard to the action for which such
expenses were advanced. The OBCA does not expressly provide for such advance
payment.
DIRECTOR LIABILITY
The DGCL provides that a corporation's certificate of incorporation may
include a provision which limits or eliminates the liability of directors to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided such liability does not arise from certain
proscribed conduct, including acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, breach of the duty
of loyalty,
15
<PAGE> 18
the payment of unlawful dividends or expenditure of funds for unlawful stock
purchases or redemptions or transactions from which such director derived an
improper personal benefit.
The Certificate of Incorporation provides that no director of the Company
shall be liable to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability: (i) for any breach
of the director's duty of loyalty to the corporation or its stockholders; (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law; (iii) under Section 174 of the DGCL; or (iv) for
any transaction from which the director derived an improper personal benefit.
The OBCA does not permit any such limitation of a director's liability.
ANTI-TAKEOVER PROVISIONS AND INTERESTED STOCKHOLDER TRANSACTIONS
The DGCL prohibits, in certain circumstances, a "business combination"
between the corporation and an "interested stockholder" within three years of
the stockholder becoming an "interested stockholder." An "interested
stockholder" is a holder who, directly or indirectly, controls 15% or more of
the outstanding voting stock or is an affiliate of the corporation and was the
owner of 15% or more of the outstanding voting stock at any time within the
prior three-year period. A "business combination" includes a merger or
consolidation, a sale or other disposition of assets having an aggregate market
value of 10% or more of the consolidated assets of the corporation or the
aggregate market value of the outstanding stock of the corporation and certain
transactions that would increase the interested stockholder's proportionate
share ownership in the corporation. This provision does not apply where: (i)
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder is approved by the corporation's
board of directors prior to the date the interested stockholder acquired such
15% interest; (ii) upon the consummation of the transaction which resulted in
the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the outstanding voting stock of the corporation excluding,
for the purpose of determining the number of shares outstanding, shares held by
persons who are directors and also officers and by employee stock plans in which
participants do not have the right to determine confidentially whether shares
held subject to the plan will be tendered; (iii) the business combination is
approved by a majority of the board of directors and the affirmative vote of
two-thirds of the outstanding votes entitled to be cast by disinterested
stockholders at an annual or special meeting, and not by written consent; (iv)
the corporation does not have a class of voting stock that is listed on a
national securities exchange, authorized for quotation on an inter-dealer
quotation system of a registered national securities association, or held of
record by more than 2,000 stockholders unless any of the foregoing results from
action taken, directly or indirectly, by an interested stockholder or from a
transaction in which a person becomes an interested stockholder or (v) the
corporation has opted out of this provision. PLD Delaware will not opt out of
this provision.
The OBCA does not contain a comparable provision with respect to "business
combinations." However, policies of certain Canadian securities regulatory
authorities, including Policy 9.1 of the Ontario Securities Commission ("Policy
9.1"), contain requirements in connection with related party transactions. A
related party transaction means, generally, any transaction by which an issuer,
directly or indirectly, acquires or transfers an asset or acquires or issues
treasury securities or assumes or transfers a liability from or to, as the case
may be, a related party by any means in any one transaction or any combination
of transactions. "Related party" is defined in Policy 9.1 and includes
directors, senior officers and holders of at least 10% of the voting securities
of the issuer.
Policy 9.1 requires more detailed disclosures in the proxy material sent
to security holders in connection with a related party transaction and, subject
to certain exemptions, the preparation of a formal valuation of the subject
matter of the related party transaction and any non-cash consideration offered
therefor and the inclusion of a summary of the valuation in the proxy material.
Policy 9.1 also requires, subject to certain exemptions, that the minority
shareholders of the issuer approve the transaction, by either a simple majority
or two-thirds of the votes cast, depending upon the circumstances.
16
<PAGE> 19
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a special meeting of shareholders held on February 27, 1997 in Toronto,
Ontario, the shareholders of the Company approved a special resolution (the
"Special Resolution") authorizing the Continuance, approving the Certificate of
Incorporation of the Company under the DGCL and approving the necessary
corporate actions and regulatory filings required to effectuate the Continuance
in Ontario and Delaware. The shareholders also authorized the directors of the
Company, in their discretion, to abandon the Continuance and any filings related
thereto without further approval of the shareholders. The votes cast at the
special meeting with respect to the Special Resolution were as follows:
<TABLE>
<S> <C>
Votes for: 11,968,480
Votes against: 679,551
Abstentions: -0-
Broker non-votes: 1,634,519
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following is a list of exhibits filed as part of this Quarterly
Report on Form 10-Q. Where so indicated by footnote, exhibits which were
previously filed are incorporated by reference. For exhibits incorporated by
reference, the location of the exhibit in the previous filing is indicated
parenthetically, together with a reference to the filing indicated by footnote.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
2* Certificate of Domestication
3.1* Certificate of Incorporation
3.2* By-Laws
10** PLD Telekom Inc. Stock Option Plan, as amended
</TABLE>
- ----------
* Incorporated by reference from the Company's Current Report on Form 8-K,
filed with the SEC on March 7, 1997.
** Incorporated by reference from the Company's Annual Report on Form 10-K,
as amended by Form 10-K/A-1, for the year ended December 31, 1996, filed
with the SEC on April 15, 1997.
(b) Reports on Form 8-K
A report on Form 8-K (Item 5 - Other Events) was filed by the Company with
the SEC on March 7, 1997 reporting the change of its corporate domicile from
Canada to the United States on February 28, 1997.
17
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PLD TELEKOM INC.
Date: May 15, 1997 By: /s/ Simon Edwards
--------------------------------
Simon Edwards
Senior Vice President,
Chief Financial Officer and
Treasurer
18
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 36,127
<SECURITIES> 0
<RECEIVABLES> 12,589
<ALLOWANCES> 0
<INVENTORY> 1,681
<CURRENT-ASSETS> 60,675
<PP&E> 104,260
<DEPRECIATION> 0
<TOTAL-ASSETS> 315,782
<CURRENT-LIABILITIES> 55,270
<BONDS> 111,328
0
31
<COMMON> 180,973
<OTHER-SE> 13,592
<TOTAL-LIABILITY-AND-EQUITY> 133,707
<SALES> 0
<TOTAL-REVENUES> 23,891
<CGS> 0
<TOTAL-COSTS> 8,521
<OTHER-EXPENSES> 12,889
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,269
<INCOME-PRETAX> (1,502)
<INCOME-TAX> 1,074
<INCOME-CONTINUING> (4,342)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,342)
<EPS-PRIMARY> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>
