PagesJaunes priority is growth, not balance sheet

BARCELONA Nov 18 (Reuters) - French yellow-pages publisher PagesJaunes (PAJ.PA) said growth was more important than balance-sheet concerns as it wanted the freedom to be part of an expected consolidation among local information providers.

Chief executive Jean-Pierre Remy told an investor conference the group had no debt due until late 2013, and headroom on its debt covenants of more than 20 percent, meaning the company's net debt of about 2 billion euros ($3 billion) was low priority.

"At the moment, it is not a priority for us to work on the balance sheet," said Remy, whose company is majority-owned by private equity firm KKR [KKR.UL] and Goldman Sachs (GS.N). "We are embarking on a very aggressive growth strategy.

"I think there will be further consolidation in our business. I don't mean the directory business, but local information," he said, adding: "We need to get more flexibility on the options we have."

Not only yellow-pages companies but also local news providers, especially newspapers, have suffered from a slump in classified advertising as small businesses, their main customers, have tightened marketing budgets.

Remy said he expected no rapid improvement on that front.

"We don't expect the advertising market to rebound in the short term or even in the mid term," he said.

PagesJaunes has been faster than peers such as Britain's Yell (YELL.L) to move its business online, helping its profit margin. Some 40 percent of its 1.2 billion euros in revenues came from online products last year, compared with Yell's 15 percent. (Reporting by Georgina Prodhan; Editing by Dan Lalor) ($1 = 0.6680 euro)