SECURITIES AND EXCHANGE COMMISSION

                           WASHINGTON D.C. 20549

                             ----------------

                                  FORM 8-K
                               CURRENT REPORT

                   PURSUANT TO SECTION 13 OR 15(D) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

     Date of Report (Date of earliest event reported): JULY 19, 1995

                      PEOPLES TELEPHONE COMPANY, INC.
         (Exact name of registrant as specified in its charter)

         NEW YORK                  0-16479                  13-2626435
(State or other jurisdiction   (Commission File   (IRS Employer Identification
    of incorporation)              Number)                    Number)

         2300 N.W. 89TH PLACE, MIAMI, FLORIDA                    33172
       (Address of principal executive offices)               (Zip Code)

      Registrant's telephone number, including area code: (305) 593-9667

<PAGE>

Item 5.   Other Events.

     REFINANCING

     In order to extend its debt maturities and to provide increased operational
and financial flexibility to take advantage of growth opportunities in its core
public pay telephone business, the Company refinanced its indebtedness
(approximately $95.5 million) under the Third Amended and Restated Loan
Agreement by and among the Company, Creditanstalt-Bankverein ("Creditanstalt")
and other financial institutions, dated February 17, 1994 (the "Prior Credit
Agreement") and repaid a note payable issued in connection with the settlement
of certain litigation described below and the mortgage note payable on the
Company's headquarters facility (approximately $7.7 million in the aggregate)
with proceeds from the sale of the Senior Notes (as defined below) and the
Preferred Stock (as defined below) (collectively, the "Refinancing").

     The Refinancing, which was consummated on July 19, 1995,  included the
following elements:

     Senior Notes

     The Company sold $100,000,000 aggregate principal amount of its 12-1/4%
Senior Notes due 2002 (the "Senior Notes") in a private placement pursuant to
Rule 144A under the Securities Act of 1933, as amended ("the Securities Act").
The indenture governing the Senior Notes (the "Indenture") contains certain
covenants, including, but not limited to, covenants with respect to the
following matters: limitations on additional indebtedness, limitations on
restricted payments, including the payment of dividends on the Company's Common
Stock, par value $.01 per share ("Common Stock"), limitations on the incurrence
of liens, limitations on transactions with affiliates, the application of the
proceeds of certain asset sales, restrictions on the issuance of preferred stock
of certain subsidiaries, limitations on the creation of restrictions on the
ability of certain subsidiaries to make certain distributions and payments to
the Company and other subsidiaries, and limitations on the merger, consolidation
or transfer of all or substantially all of the assets of the Company and certain
subsidiaries with or to another person.  Holders of Senior Notes will also have
the right to require the Company to repurchase  Senior Notes in the event of
certain changes in control.  The Senior Notes are senior unsecured obligations
of the Company and rank pari passu in right of payment with other senior
indebtedness of the Company.

     Preferred Stock

     The Company issued 150,000 shares of its Series C Cumulative Convertible
Preferred Stock (the "Preferred Stock") to UBS Partners, Inc. ("UBS"), a
wholly-owned subsidiary of Union Bank of Switzerland, for gross proceeds of
$15.0 million.  The Preferred Stock cumulates dividends at an annual rate of
7%, subject to increase up to 11% under certain circumstances, including
accelerations of indebtedness of the Company and material breaches of
representations, warranties and covenants, which are payable in cash or, at the
Company's option

                                     2

<PAGE>

during the first three years after issuance, will continue to
cumulate.  The Preferred Stock is immediately convertible, at the option of the
holders, into approximately 2,857,143 shares of Common Stock (or approximately
15.1% of the outstanding Common Stock as of June 30, 1995 determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) at a conversion price of $5.25 per share, subject to
reduction pursuant to anti-dilution adjustments in connection with, among other
things, certain issuances of shares of, or rights to acquire, Common Stock at
less than the conversion price of the Preferred Stock.  The Preferred Stock is
subject to (i) mandatory redemption by the Company 10 years after issuance or,
subject to the prior payment in full of the Company's indebtedness under the New
Credit Agreement (as defined below) and the Senior Notes, in the event of
certain bankruptcy or related events relating to the Company, (ii) redemption at
the Company's option, resulting in the exercisability of the contingent warrant
described below, and (iii) upon the occurrence of a change of control (as
defined in the Indenture), redemption, at the option of the holders thereof, in
all cases at its liquidation preference ($15.0 million in the aggregate) plus
accrued and unpaid dividends.

     The holders of the Preferred Stock are  entitled to elect two members of
the six member Board of Directors of the Company.  The two directors initially
will be Charles J. Delaney, President of UBS Capital Corporation ("UBS
Capital"), also a wholly-owned subsidiary of Union Bank of Switzerland, and
Jeffrey Keenan, a Managing Director of UBS Capital and a Vice President and a
Director of UBS.  Mr. Delaney was elected on July 19, 1995 to fill the vacancy
created by the resignation of Ronald Gelber and UBS has advised the Company that
it will elect Mr. Keenan at or about the time of  the Company's 1995 Annual
Meeting of Shareholders.  The Preferred Stock is also entitled to vote on all
other matters submitted to the stockholders for a vote together with the holders
of the Common Stock voting as a single class with each share of Preferred Stock
entitled to one vote for each share of Common Stock issuable upon conversion.

     In connection with the Preferred Stock, the Company has agreed to certain
affirmative and negative covenants with respect to the conduct of its business,
among other matters.  For so long as 25% of the shares of Preferred Stock or the
Common Stock into which such Preferred Stock is convertible remain outstanding
and have not been sold publicly, the Company has agreed with UBS and Appian
Capital Partners, L.L.C. ("Appian") to observe certain negative covenants,
including that the Company will not:

     (a) (i)   amend its Certificate of Incorporation or bylaws in a way which
would adversely affect the rights of holders of the Preferred Stock or
underlying Common Stock or subordinate the rights of the holders of the
Preferred Stock to the rights of other holders of capital stock of the Company;
(ii) to the extent not prohibited by the Company's Amended and Restated
Certificate of Incorporation, except in an underwritten public offering, or
issuances of Common Stock pursuant to options, warrants and other rights
outstanding on the date of the Securities Purchase Agreement or employee stock
options, and issuances of Common Stock in certain permitted acquisitions, sell
capital stock of the Company unless holders of the Preferred Stock, the
underlying Common Stock or the Warrants (as hereinafter defined) are given the
right to purchase such capital stock to maintain such holders' percentage
interest in the Company's Common Stock; or (iii) effect a fundamental change,
including (a) the sale or transfer of more

                                     3

<PAGE>

than 40% of the consolidated assets of the Company and its subsidiaries and (b)
mergers and consolidations other than those in which the Preferred Stock is
unaffected and the holders of the majority of the voting power to elect the
Board of Directors continue to own such majority voting power unless such
fundamental change provides that upon the consummation thereof, the Company
shall have purchased all such shares of the Preferred Stock tendered to the
Company for purchase at a price per share equal to its liquidation preference
of $100 per share plus accrued and unpaid dividends thereon pursuant to an
offer to purchase given to the holders of the Preferred Stock not less than 15
days prior to the date such fundamental change is to be consummated; or

     (b)  Without the approval of 75% of the members of the Board of Directors:
(i) engage in transactions with stockholders, directors, officers, employees or
defined affiliates which transactions would require disclosure under Rule 404 of
Regulation S-K under the Securities Act;  (ii) issue (a) debt securities which
are convertible into the Company's Common Stock or with equity features such as
warrants unless such equity features meet certain tests or (b) capital stock or
other equity securities senior to or on a parity with the Preferred Stock or
having a voting power equivalent to or greater than one vote per share of Common
Stock; (iii) merge or consolidate or, except for certain permitted acquisitions
or dispositions, allow a subsidiary to merge or consolidate; (iv) sell, lease or
otherwise dispose of assets of the Company or its subsidiaries involving
consideration greater than $5 million; (v) liquidate, dissolve or effect a
recapitalization or reorganization; (vi) acquire an interest in or assets of any
other company involving aggregate consideration greater than $5 million; (vii)
own, manage or operate any business other than the domestic pay telephone
business; or (vii) hire, elect or replace the Company's Chief Executive Officer,
President, Chief Financial Officer or Chief Operating Officer or change the
terms of employment or compensation thereof.  Notwithstanding the foregoing, the
Company may sell certain discontinued operations and enter into and borrow under
the New Credit Agreement.  So long as any shares of the Preferred Stock remain
outstanding, without the prior consent of the holders of a majority of the then
outstanding shares of Preferred Stock, the Company is prohibited from paying or
declaring any dividend  or making any distribution on any other capital stock of
the Company (other than dividends payable solely in the securities in respect of
which such dividends are paid).

     In addition, UBS has been issued a contingent warrant, exercisable only if
the Company redeems the Preferred Stock pursuant to its optional redemption
rights.  Such warrant is exercisable initially for the same number of shares
and at the same price as provided in the conversion terms of the Preferred
Stock being redeemed, all determined as of the redemption date of such
Preferred Stock.  Such contingent warrant has anti-dilution provisions
comparable to the Preferred Stock.  UBS also has the right to have its Preferred
Stock and underlying Common Stock repurchased by the Company (at the original
purchase price thereof, plus accrued and unpaid dividends thereon), if the
Company violates certain regulations regarding an investee of a Small Business
Investment Company.

     UBS has agreed, subject to certain limitations and restrictions, that for
up to 10 years from the date of the closing of the Preferred Stock, it will not,
without the consent of the

                                     4

<PAGE>

Company's Board of Directors, acquire beneficial ownership (determined in
accordance with Rule 13d-3 under the Exchange Act) of more than 25% of the
Company's voting securities, offer or solicit any other person to acquire the
Company or conduct a proxy solicitation with respect to the Company.

     Appian, which provided financial consulting services in connection with
the Preferred Stock,  was issued warrants to purchase up to 275,000 shares of
Common Stock at an initial exercise price of $5.25 per share (the "Warrants")
and was paid a fee of $400,000.

     The Company has also agreed to register for resale under the Securities Act
the Common Stock issuable upon conversion of the Preferred Stock or upon
exercise of the Warrants.

     The New Credit Agreement

     The Company entered into an amendment and restatement of the Prior Credit
Agreement (as amended and restated, the "New Credit Agreement"), with
Creditanstalt, providing for a revolving credit facility for the benefit of the
Company in the aggregate amount of $40.0 million.  The New Credit Agreement has
a term of four years.  Creditanstalt has informed the Company that it intends to
syndicate a portion of the loan.  The following is a summary of the terms of the
New Credit Agreement.

     Borrowing Base.  The Company may use borrowings under the New Credit
Agreement for internal growth and to fund future acquisitions, although
Creditanstalt has the right to approve any acquisition for consideration in
excess of $3.0 million.  Borrowings under the New Credit Agreement may not
exceed the sum of (i) 75.0% of the Company's eligible accounts receivable plus
(ii) an amount equal to $1,200 multiplied by the number of eligible installed
pay telephones, in the aggregate up to the total limit of $40.0 million.

     Interest.  Interest on the principal balance outstanding under the New
Credit Agreement accrues at the option of the Company at the rate of (i) 1.5%
above the greater of (a) Creditanstalt's prime lending rate at its principal
office in New York, New York and (b) the federal funds rate plus 0.5% or (ii)
3.0% above the rate quoted by Creditanstalt as the average London interbank
offered rate for one, two, three and six-month Eurodollar deposits.  In the
event of a default under the New Credit Agreement, at Creditanstalt's option,
the interest rate on the borrowings under the New Credit Agreement can increase
to 2.0% per annum above the then applicable rate.

     Security.  As security for the indebtedness under the New Credit Agreement,
the Company has granted to Creditanstalt a first priority security interest in
substantially all existing and future assets of the Company, whether tangible or
intangible, including, without limitation, accounts receivable,  inventory and
equipment.

     Certain Covenants.  In addition to customary covenants, the New Credit
Agreement contains various restrictive financial and other covenants including,
without limitation, (i)

                                     5

<PAGE>

prohibitions on the incurrence of additional indebtedness, (ii) restrictions on
the creation of additional liens, (iii) certain limitations on dividends and
distributions by the Company, (iv) restrictions on mergers and sales of assets,
investments and transactions with affiliates and (v) certain financial
maintenance tests.  Such financial maintenance tests, include, among others,
(i) a minimum of earnings before interest, taxes, depreciation and amortization
("EBITDA") test of $5.0 million for the quarter ending June 30, 1995, $10.0
million for the two quarter period ending September 30, 1995 and $15.0 million
for the three quarter period ending December 31, 1995, and, thereafter, a
minimum annual EBITDA test (tested quarterly for the prior four quarters)
beginning at $19.0 million for the quarter ended March 31, 1996 and increasing
over time to $26.0 million after December 31, 1997, (ii) a minimum ratio of
annual EBITDA to interest expense (tested quarterly) beginning at 1.5 to 1 and
increasing over time to 2.5 to 1 after December 31, 1997, (iii) a minimum net
worth test beginning at $47.0 million and increasing over time to $67.0 million
after December 31, 1998, (iv) a maximum ratio of debt to net worth of 3.25 to 1
for the first two years and decreasing to 3.0 to 1 for the remaining two years,
and (v) maximum ratio of bank debt to EBITDA of 2.0 to 1 (tested quarterly using
EBITDA from the prior four quarters).  For purposes of the foregoing covenants,
EBITDA includes EBITDA from the Company's inmate telephone and cellular
telephone rental operations and net worth includes the Preferred Stock.

     Events of Default.  The events of default under the New Credit Agreement
are customary for facilities of such nature and include payment and non-payment
defaults and certain events of bankruptcy or insolvency of the Company.

     Fees.  In connection with the execution of the New Credit Agreement,
the Company agreed to pay a loan origination fee of $200,000.  The New Credit
Agreement also provides for a monthly fee based on the unused portion of the New
Credit Agreement and an annual agency fee.

CERTAIN REGULATORY DEVELOPMENTS

     Reduction in Florida Access Fees.

     The Florida Legislature, during the 1995 General Session, passed a
comprehensive rewrite of the State's telecommunications law, which was enacted
into law in June 1995.  As its cornerstone, the legislation provides for open
competition in the Florida local exchange markets, effective July 1, 1996.  As
one of the largest customers of local exchange service in the State, the Company
expects to benefit in terms of price and service quality with the advent of
local telephone service competition permitted under this new legislation.  In
addition, the new law specifically enables the Company and other independent
public pay telephone providers to obtain flat rate business line interconnection
from the LECs in lieu of the mandatory measured rate structure previously in
place.  Based upon 1994 average usage of Florida public pay telephones, the
Company estimates that, if implemented, these changes may result in an
approximate average savings of $25-$30/phone/month to the Company for its
Florida operations.

                                     6

<PAGE>

      Compensation for Access Code Calls.

     On May 23, 1995, the United States Court of Appeals for the District of
Columbia issued a decision overturning a prior Federal Communications Commission
("FCC") ruling that applicable federal law did not allow the FCC to prescribe
compensation to pay telephone providers on "subscriber 1-800 calls" or 1-800
calls where the recipient of the call selected the operator service provider
(for example, calls to 1-800-FLOWERS or 1-800-USA-RAIL).  The FCC made this
earlier finding in the context of its initial decision to prescribe compensation
to public pay telephone providers on "carrier access code calls" (including
1-800 carrier access code calls, along with "950" and "10XXX" access code calls)
under the same federal law.  The Court held that there was no legal preclusion
to the establishment of a system for compensating public pay telephone providers
on subscriber 1-800 calls initiated from independent public pay telephones.  The
Court remanded the case to the FCC for further proceedings "to consider the need
to prescribe compensation for subscriber 1-800 calls routed to providers of
operator services that are other than the prescribed provider of operator
services."  The Company will participate through the American Public
Communications Council industry trade group in an effort to have the FCC
expeditiously adopt a compensation mechanism that provides reasonable payment to
providers of pay telephone equipment used in making these 1-800 calls.  There
can be no assurance that a compensation scheme for subscriber 1-800 calls will
be adopted on a timely basis or at all.

SETTLEMENT OF CERTAIN LEGAL PROCEEDINGS

     On May 9, 1995, a complaint (as amended on May 30, 1995) was filed in the
Supreme Court of the State of New York, New York County, against the Company by
Ascom Communications, Inc. ("ACI") and ACI's sole shareholder, Ascom Holding,
Inc. ("AHI") (such litigation, the "ACI Litigation"). The complaint alleged
breach of contract by the Company for failure to make certain principal and
interest payments in respect of $6.0 million principal amount of promissory
notes which were issued by the Company to ACI (the "ACI Notes") in connection
with the November 1993 purchase by the Company of substantially all of ACI's
assets. In addition, the complaint alleged that the Company breached its
agreement with ACI to register certain shares of Common Stock of the Company
under the Securities Act within an agreed upon time frame. The Company did not
make such payments due, in part, to disputes regarding the indemnification
obligations of ACI and to conserve cash in light of the Company's working
capital requirements and amortization requirements under the Prior Credit
Agreement. The complaint also alleged that the Company failed to assume certain
obligations and pay certain amounts under an equipment lease. The Company
settled the ACI Litigation in June 1995 for approximately $5.7 million of which
$500,000 was paid on execution of the settlement and the balance was paid in
full following completion of the Refinancing.

                                     7

<PAGE>

Item 7.   Financial Statements and Exhibits

(c)  Exhibits:

Exhibit   Description

  3       Certificate of Amendment to Certificate of Incorporation filed on July
          18, 1995 authorizing the Preferred Stock

 10.1     Fourth Amended and Restated Loan and Security Agreement dated as
          of July 19, 1995 by and among the Company, the lenders named therein
          and Creditanstalt-Bankverein

 10.2     Letter Agreement, dated July 3, 1995, between the Company and
          Creditanstalt American Corporation, with respect to the amendment
          of the Second Amended and Restated Warrant Agreement dated
          February 17, 1994

 10.3     Exchange Agreement, dated as of May 3, 1995, by and between the
          Company and Creditanstalt Corporate Finance, Inc.

 10.4     Indenture, dated as of July 15, 1995, between the Company and
          First Union National Bank of North Carolina

 10.5     Registration Rights Agreement, dated July 19, 1995, between the
          Company and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
          Smith Incorporated

 10.6     Letter Agreement, dated July 18, 1995, among the Company, UBS Capital
          Corporation, UBS Partners, Inc. and Appian Capital Partners, L.L.C.,
          amending the Securities Purchase Agreement, dated as of July 3, 1995
          among the Company, UBS Capital Corporation and Appian Capital
          Partners, L.L.C.

 10.7     Form of Stock Purchase Warrant issued on July 19, 1995 to Appian
          Capital Partners, L.L.C.

 10.8     Form of Contingent Stock Purchase Warrant issued on July 19, 1995 to
          UBS Partners, Inc.

 10.9     Registration Rights Agreement dated as of July 19, 1995 between
          the Company and UBS Partners, Inc.


                                     8

<PAGE>

                                 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.

                              PEOPLES TELEPHONE COMPANY, INC.
                                  Registrant

Dated: July 21, 1995                        /s/    Bonnie S. Biumi
                              ________________________________________________

                                            Bonnie S. Biumi
                                            Chief Financial Officer

                                     9
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SECURITIES AND EXCHANGE COMMISSION

                           WASHINGTON D.C. 20549

                             ----------------

                                  FORM 8-K
                               CURRENT REPORT

                   PURSUANT TO SECTION 13 OR 15(D) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

     Date of Report (Date of earliest event reported): JULY 19, 1995

                      PEOPLES TELEPHONE COMPANY, INC.
         (Exact name of registrant as specified in its charter)

         NEW YORK                  0-16479                  13-2626435
(State or other jurisdiction   (Commission File   (IRS Employer Identification
    of incorporation)              Number)                    Number)

         2300 N.W. 89TH PLACE, MIAMI, FLORIDA                    33172
       (Address of principal executive offices)               (Zip Code)

      Registrant's telephone number, including area code: (305) 593-9667
Item 5.   Other Events.

     REFINANCING

     In order to extend its debt maturities and to provide increased operational
and financial flexibility to take advantage of growth opportunities in its core
public pay telephone business, the Company refinanced its indebtedness
(approximately $95.5 million) under the Third Amended and Restated Loan
Agreement by and among the Company, Creditanstalt-Bankverein ("Creditanstalt")
and other financial institutions, dated February 17, 1994 (the "Prior Credit
Agreement") and repaid a note payable issued in connection with the settlement
of certain litigation described below and the mortgage note payable on the
Company's headquarters facility (approximately $7.7 million in the aggregate)
with proceeds from the sale of the Senior Notes (as defined below) and the
Preferred Stock (as defined below) (collectively, the "Refinancing").

     The Refinancing, which was consummated on July 19, 1995,  included the
following elements:

     Senior Notes

     The Company sold $100,000,000 aggregate principal amount of its 12-1/4%
Senior Notes due 2002 (the "Senior Notes") in a private placement pursuant to
Rule 144A under the Securities Act of 1933, as amended ("the Securities Act").
The indenture governing the Senior Notes (the "Indenture") contains certain
covenants, including, but not limited to, covenants with respect to the
following matters: limitations on additional indebtedness, limitations on
restricted payments, including the payment of dividends on the Company's Common
Stock, par value $.01 per share ("Common Stock"), limitations on the incurrence
of liens, limitations on transactions with affiliates, the application of the
proceeds of certain asset sales, restrictions on the issuance of preferred stock
of certain subsidiaries, limitations on the creation of restrictions on the
ability of certain subsidiaries to make certain distributions and payments to
the Company and other subsidiaries, and limitations on the merger, consolidation
or transfer of all or substantially all of the assets of the Company and certain
subsidiaries with or to another person.  Holders of Senior Notes will also have
the right to require the Company to repurchase  Senior Notes in the event of
certain changes in control.  The Senior Notes are senior unsecured obligations
of the Company and rank pari passu in right of payment with other senior
indebtedness of the Company.

     Preferred Stock

     The Company issued 150,000 shares of its Series C Cumulative Convertible
Preferred Stock (the "Preferred Stock") to UBS Partners, Inc. ("UBS"), a
wholly-owned subsidiary of Union Bank of Switzerland, for gross proceeds of
$15.0 million.  The Preferred Stock cumulates dividends at an annual rate of
7%, subject to increase up to 11% under certain circumstances, including
accelerations of indebtedness of the Company and material breaches of
representations, warranties and covenants, which are payable in cash or, at the
Company's option

                                     2
during the first three years after issuance, will continue to
cumulate.  The Preferred Stock is immediately convertible, at the option of the
holders, into approximately 2,857,143 shares of Common Stock (or approximately
15.1% of the outstanding Common Stock as of June 30, 1995 determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) at a conversion price of $5.25 per share, subject to
reduction pursuant to anti-dilution adjustments in connection with, among other
things, certain issuances of shares of, or rights to acquire, Common Stock at
less than the conversion price of the Preferred Stock.  The Preferred Stock is
subject to (i) mandatory redemption by the Company 10 years after issuance or,
subject to the prior payment in full of the Company's indebtedness under the New
Credit Agreement (as defined below) and the Senior Notes, in the event of
certain bankruptcy or related events relating to the Company, (ii) redemption at
the Company's option, resulting in the exercisability of the contingent warrant
described below, and (iii) upon the occurrence of a change of control (as
defined in the Indenture), redemption, at the option of the holders thereof, in
all cases at its liquidation preference ($15.0 million in the aggregate) plus
accrued and unpaid dividends.

     The holders of the Preferred Stock are  entitled to elect two members of
the six member Board of Directors of the Company.  The two directors initially
will be Charles J. Delaney, President of UBS Capital Corporation ("UBS
Capital"), also a wholly-owned subsidiary of Union Bank of Switzerland, and
Jeffrey Keenan, a Managing Director of UBS Capital and a Vice President and a
Director of UBS.  Mr. Delaney was elected on July 19, 1995 to fill the vacancy
created by the resignation of Ronald Gelber and UBS has advised the Company that
it will elect Mr. Keenan at or about the time of  the Company's 1995 Annual
Meeting of Shareholders.  The Preferred Stock is also entitled to vote on all
other matters submitted to the stockholders for a vote together with the holders
of the Common Stock voting as a single class with each share of Preferred Stock
entitled to one vote for each share of Common Stock issuable upon conversion.

     In connection with the Preferred Stock, the Company has agreed to certain
affirmative and negative covenants with respect to the conduct of its business,
among other matters.  For so long as 25% of the shares of Preferred Stock or the
Common Stock into which such Preferred Stock is convertible remain outstanding
and have not been sold publicly, the Company has agreed with UBS and Appian
Capital Partners, L.L.C. ("Appian") to observe certain negative covenants,
including that the Company will not:

     (a) (i)   amend its Certificate of Incorporation or bylaws in a way which
would adversely affect the rights of holders of the Preferred Stock or
underlying Common Stock or subordinate the rights of the holders of the
Preferred Stock to the rights of other holders of capital stock of the Company;
(ii) to the extent not prohibited by the Company's Amended and Restated
Certificate of Incorporation, except in an underwritten public offering, or
issuances of Common Stock pursuant to options, warrants and other rights
outstanding on the date of the Securities Purchase Agreement or employee stock
options, and issuances of Common Stock in certain permitted acquisitions, sell
capital stock of the Company unless holders of the Preferred Stock, the
underlying Common Stock or the Warrants (as hereinafter defined) are given the
right to purchase such capital stock to maintain such holders' percentage
interest in the Company's Common Stock; or (iii) effect a fundamental change,
including (a) the sale or transfer of more

                                     3
than 40% of the consolidated assets of the Company and its subsidiaries and (b)
mergers and consolidations other than those in which the Preferred Stock is
unaffected and the holders of the majority of the voting power to elect the
Board of Directors continue to own such majority voting power unless such
fundamental change provides that upon the consummation thereof, the Company
shall have purchased all such shares of the Preferred Stock tendered to the
Company for purchase at a price per share equal to its liquidation preference
of $100 per share plus accrued and unpaid dividends thereon pursuant to an
offer to purchase given to the holders of the Preferred Stock not less than 15
days prior to the date such fundamental change is to be consummated; or

     (b)  Without the approval of 75% of the members of the Board of Directors:
(i) engage in transactions with stockholders, directors, officers, employees or
defined affiliates which transactions would require disclosure under Rule 404 of
Regulation S-K under the Securities Act;  (ii) issue (a) debt securities which
are convertible into the Company's Common Stock or with equity features such as
warrants unless such equity features meet certain tests or (b) capital stock or
other equity securities senior to or on a parity with the Preferred Stock or
having a voting power equivalent to or greater than one vote per share of Common
Stock; (iii) merge or consolidate or, except for certain permitted acquisitions
or dispositions, allow a subsidiary to merge or consolidate; (iv) sell, lease or
otherwise dispose of assets of the Company or its subsidiaries involving
consideration greater than $5 million; (v) liquidate, dissolve or effect a
recapitalization or reorganization; (vi) acquire an interest in or assets of any
other company involving aggregate consideration greater than $5 million; (vii)
own, manage or operate any business other than the domestic pay telephone
business; or (vii) hire, elect or replace the Company's Chief Executive Officer,
President, Chief Financial Officer or Chief Operating Officer or change the
terms of employment or compensation thereof.  Notwithstanding the foregoing, the
Company may sell certain discontinued operations and enter into and borrow under
the New Credit Agreement.  So long as any shares of the Preferred Stock remain
outstanding, without the prior consent of the holders of a majority of the then
outstanding shares of Preferred Stock, the Company is prohibited from paying or
declaring any dividend  or making any distribution on any other capital stock of
the Company (other than dividends payable solely in the securities in respect of
which such dividends are paid).

     In addition, UBS has been issued a contingent warrant, exercisable only if
the Company redeems the Preferred Stock pursuant to its optional redemption
rights.  Such warrant is exercisable initially for the same number of shares
and at the same price as provided in the conversion terms of the Preferred
Stock being redeemed, all determined as of the redemption date of such
Preferred Stock.  Such contingent warrant has anti-dilution provisions
comparable to the Preferred Stock.  UBS also has the right to have its Preferred
Stock and underlying Common Stock repurchased by the Company (at the original
purchase price thereof, plus accrued and unpaid dividends thereon), if the
Company violates certain regulations regarding an investee of a Small Business
Investment Company.

     UBS has agreed, subject to certain limitations and restrictions, that for
up to 10 years from the date of the closing of the Preferred Stock, it will not,
without the consent of the

                                     4
Company's Board of Directors, acquire beneficial ownership (determined in
accordance with Rule 13d-3 under the Exchange Act) of more than 25% of the
Company's voting securities, offer or solicit any other person to acquire the
Company or conduct a proxy solicitation with respect to the Company.

     Appian, which provided financial consulting services in connection with
the Preferred Stock,  was issued warrants to purchase up to 275,000 shares of
Common Stock at an initial exercise price of $5.25 per share (the "Warrants")
and was paid a fee of $400,000.

     The Company has also agreed to register for resale under the Securities Act
the Common Stock issuable upon conversion of the Preferred Stock or upon
exercise of the Warrants.

     The New Credit Agreement

     The Company entered into an amendment and restatement of the Prior Credit
Agreement (as amended and restated, the "New Credit Agreement"), with
Creditanstalt, providing for a revolving credit facility for the benefit of the
Company in the aggregate amount of $40.0 million.  The New Credit Agreement has
a term of four years.  Creditanstalt has informed the Company that it intends to
syndicate a portion of the loan.  The following is a summary of the terms of the
New Credit Agreement.

     Borrowing Base.  The Company may use borrowings under the New Credit
Agreement for internal growth and to fund future acquisitions, although
Creditanstalt has the right to approve any acquisition for consideration in
excess of $3.0 million.  Borrowings under the New Credit Agreement may not
exceed the sum of (i) 75.0% of the Company's eligible accounts receivable plus
(ii) an amount equal to $1,200 multiplied by the number of eligible installed
pay telephones, in the aggregate up to the total limit of $40.0 million.

     Interest.  Interest on the principal balance outstanding under the New
Credit Agreement accrues at the option of the Company at the rate of (i) 1.5%
above the greater of (a) Creditanstalt's prime lending rate at its principal
office in New York, New York and (b) the federal funds rate plus 0.5% or (ii)
3.0% above the rate quoted by Creditanstalt as the average London interbank
offered rate for one, two, three and six-month Eurodollar deposits.  In the
event of a default under the New Credit Agreement, at Creditanstalt's option,
the interest rate on the borrowings under the New Credit Agreement can increase
to 2.0% per annum above the then applicable rate.

     Security.  As security for the indebtedness under the New Credit Agreement,
the Company has granted to Creditanstalt a first priority security interest in
substantially all existing and future assets of the Company, whether tangible or
intangible, including, without limitation, accounts receivable,  inventory and
equipment.

     Certain Covenants.  In addition to customary covenants, the New Credit
Agreement contains various restrictive financial and other covenants including,
without limitation, (i)

                                     5
prohibitions on the incurrence of additional indebtedness, (ii) restrictions on
the creation of additional liens, (iii) certain limitations on dividends and
distributions by the Company, (iv) restrictions on mergers and sales of assets,
investments and transactions with affiliates and (v) certain financial
maintenance tests.  Such financial maintenance tests, include, among others,
(i) a minimum of earnings before interest, taxes, depreciation and amortization
("EBITDA") test of $5.0 million for the quarter ending June 30, 1995, $10.0
million for the two quarter period ending September 30, 1995 and $15.0 million
for the three quarter period ending December 31, 1995, and, thereafter, a
minimum annual EBITDA test (tested quarterly for the prior four quarters)
beginning at $19.0 million for the quarter ended March 31, 1996 and increasing
over time to $26.0 million after December 31, 1997, (ii) a minimum ratio of
annual EBITDA to interest expense (tested quarterly) beginning at 1.5 to 1 and
increasing over time to 2.5 to 1 after December 31, 1997, (iii) a minimum net
worth test beginning at $47.0 million and increasing over time to $67.0 million
after December 31, 1998, (iv) a maximum ratio of debt to net worth of 3.25 to 1
for the first two years and decreasing to 3.0 to 1 for the remaining two years,
and (v) maximum ratio of bank debt to EBITDA of 2.0 to 1 (tested quarterly using
EBITDA from the prior four quarters).  For purposes of the foregoing covenants,
EBITDA includes EBITDA from the Company's inmate telephone and cellular
telephone rental operations and net worth includes the Preferred Stock.

     Events of Default.  The events of default under the New Credit Agreement
are customary for facilities of such nature and include payment and non-payment
defaults and certain events of bankruptcy or insolvency of the Company.

     Fees.  In connection with the execution of the New Credit Agreement,
the Company agreed to pay a loan origination fee of $200,000.  The New Credit
Agreement also provides for a monthly fee based on the unused portion of the New
Credit Agreement and an annual agency fee.

CERTAIN REGULATORY DEVELOPMENTS

     Reduction in Florida Access Fees.

     The Florida Legislature, during the 1995 General Session, passed a
comprehensive rewrite of the State's telecommunications law, which was enacted
into law in June 1995.  As its cornerstone, the legislation provides for open
competition in the Florida local exchange markets, effective July 1, 1996.  As
one of the largest customers of local exchange service in the State, the Company
expects to benefit in terms of price and service quality with the advent of
local telephone service competition permitted under this new legislation.  In
addition, the new law specifically enables the Company and other independent
public pay telephone providers to obtain flat rate business line interconnection
from the LECs in lieu of the mandatory measured rate structure previously in
place.  Based upon 1994 average usage of Florida public pay telephones, the
Company estimates that, if implemented, these changes may result in an
approximate average savings of $25-$30/phone/month to the Company for its
Florida operations.

                                     6
Compensation for Access Code Calls.

     On May 23, 1995, the United States Court of Appeals for the District of
Columbia issued a decision overturning a prior Federal Communications Commission
("FCC") ruling that applicable federal law did not allow the FCC to prescribe
compensation to pay telephone providers on "subscriber 1-800 calls" or 1-800
calls where the recipient of the call selected the operator service provider
(for example, calls to 1-800-FLOWERS or 1-800-USA-RAIL).  The FCC made this
earlier finding in the context of its initial decision to prescribe compensation
to public pay telephone providers on "carrier access code calls" (including
1-800 carrier access code calls, along with "950" and "10XXX" access code calls)
under the same federal law.  The Court held that there was no legal preclusion
to the establishment of a system for compensating public pay telephone providers
on subscriber 1-800 calls initiated from independent public pay telephones.  The
Court remanded the case to the FCC for further proceedings "to consider the need
to prescribe compensation for subscriber 1-800 calls routed to providers of
operator services that are other than the prescribed provider of operator
services."  The Company will participate through the American Public
Communications Council industry trade group in an effort to have the FCC
expeditiously adopt a compensation mechanism that provides reasonable payment to
providers of pay telephone equipment used in making these 1-800 calls.  There
can be no assurance that a compensation scheme for subscriber 1-800 calls will
be adopted on a timely basis or at all.

SETTLEMENT OF CERTAIN LEGAL PROCEEDINGS

     On May 9, 1995, a complaint (as amended on May 30, 1995) was filed in the
Supreme Court of the State of New York, New York County, against the Company by
Ascom Communications, Inc. ("ACI") and ACI's sole shareholder, Ascom Holding,
Inc. ("AHI") (such litigation, the "ACI Litigation"). The complaint alleged
breach of contract by the Company for failure to make certain principal and
interest payments in respect of $6.0 million principal amount of promissory
notes which were issued by the Company to ACI (the "ACI Notes") in connection
with the November 1993 purchase by the Company of substantially all of ACI's
assets. In addition, the complaint alleged that the Company breached its
agreement with ACI to register certain shares of Common Stock of the Company
under the Securities Act within an agreed upon time frame. The Company did not
make such payments due, in part, to disputes regarding the indemnification
obligations of ACI and to conserve cash in light of the Company's working
capital requirements and amortization requirements under the Prior Credit
Agreement. The complaint also alleged that the Company failed to assume certain
obligations and pay certain amounts under an equipment lease. The Company
settled the ACI Litigation in June 1995 for approximately $5.7 million of which
$500,000 was paid on execution of the settlement and the balance was paid in
full following completion of the Refinancing.

                                     7
Item 7.   Financial Statements and Exhibits

(c)  Exhibits:

Exhibit   Description

  3       Certificate of Amendment to Certificate of Incorporation filed on July
          18, 1995 authorizing the Preferred Stock

 10.1     Fourth Amended and Restated Loan and Security Agreement dated as
          of July 19, 1995 by and among the Company, the lenders named therein
          and Creditanstalt-Bankverein

 10.2     Letter Agreement, dated July 3, 1995, between the Company and
          Creditanstalt American Corporation, with respect to the amendment
          of the Second Amended and Restated Warrant Agreement dated
          February 17, 1994

 10.3     Exchange Agreement, dated as of May 3, 1995, by and between the
          Company and Creditanstalt Corporate Finance, Inc.

 10.4     Indenture, dated as of July 15, 1995, between the Company and
          First Union National Bank of North Carolina

 10.5     Registration Rights Agreement, dated July 19, 1995, between the
          Company and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
          Smith Incorporated

 10.6     Letter Agreement, dated July 18, 1995, among the Company, UBS Capital
          Corporation, UBS Partners, Inc. and Appian Capital Partners, L.L.C.,
          amending the Securities Purchase Agreement, dated as of July 3, 1995
          among the Company, UBS Capital Corporation and Appian Capital
          Partners, L.L.C.

 10.7     Form of Stock Purchase Warrant issued on July 19, 1995 to Appian
          Capital Partners, L.L.C.

 10.8     Form of Contingent Stock Purchase Warrant issued on July 19, 1995 to
          UBS Partners, Inc.

 10.9     Registration Rights Agreement dated as of July 19, 1995 between
          the Company and UBS Partners, Inc.

                                     8
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.

                              PEOPLES TELEPHONE COMPANY, INC.
                                  Registrant

Dated: July 21, 1995                        /s/    Bonnie S. Biumi
                              ________________________________________________

                                            Bonnie S. Biumi
                                            Chief Financial Officer

                                     9