KCom Group PLC (KCOM.LN) said Tuesday it is still in talks with BT Group PLC (BT.LN) over the possible sale of its U.K. network and is looking to turn supply arrangements into partnership deals.

"We haven't concluded anything yet," and the company is also working with Cable & Wireless PLC (CW.LN) and Colt Telecom Group S.A. (COLT.LN), Executive Deputy Chairman Bill Halbert told Dow Jones Newswires.

"At the moment we're focusing on our cash generation and keeping our net debt down. In terms of future growth, we're not looking in the current year for headline growth," but the company expects growth in 2010 and beyond, Halbert said.

Halbert said most of the company's growth will come from the National Managed Communications Services business, adding that the East Yorkshire business is now more focused in terms of specific customer needs and is addressing both residential and local business.

"We've got strong banking facilities to March 2012; we want to put ourselves in a position by March 2011 where we're able to get net debt down to less than two times the current ratio," he said.

For fiscal 2009, ended March 31, KCom incurred a pretax loss after restructuring costs and impairment charges of GBP111.3 million, compared with a profit of GBP4.4 million in fiscal 2008.

Company Web site: www.kcom.com

-By Elliott Ball, Dow Jones Newswires; 44-20-7842-9314; elliott.ball@dowjones.com
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