UPDATE 2-Funds to bid for Citi's Bellsystem24 by Sep 1-sources

* Sale could be largest private equity deal in Japan in 2009

* Permira, KKR seen as most aggressive bidders

* Japanese and overseas banks look to offer loans

* Bellsystem24 is core investment by Citi's Japan fund arm

By Junko Fujita and George Chen

TOKYO/HONG KONG, Aug 12 (Reuters) - Buyout funds including Permira [PERM.UL] and KKR have been told to submit their first bids by Sept. 1 for Citigroup Inc's (C.N) Bellsystem24, a leading Japanese telemarketer, in what might be the largest private equity deal in Japan this year, sources familiar with the process said on Wednesday.

The transaction, expected to be worth about $1.5 billion, is part of Citigroup's global effort to unload assets to bolster its capital. Bellsystem24 is the core investment made by Nikko Principal Investments Japan, a private equity arm of Citigroup.

The sources added that Permira and Kohlberg Kravis Roberts & Co [KKR.UL] appear to be the most interested and aggressive contenders in the bidding. KKR, which opened an office in Tokyo in 2006, has not yet made a major investment in Japan.

In South Korea, KKR agreed in May to buy Oriental Brewery for $1.8 billion from Anheuser-Busch InBev INTB.BR. [ID:nHKG270104]

Permira opened an office in Tokyo in 2005 and agreed to buy agrichemical company Arysta LifeScience Corp in 2007 for $2.2 billion.

Potential investors in Bellsytem24 are working on financial due diligence this week, while international and Japanese banks are also lobbying them to team up for loan support, though no alliance between a private equity fund and a lender has been fixed.

Nikko Citigroup, the Japanese investment banking arm of Citigroup, and Goldman Sachs Group Inc (GS.N) are advising Citi on the sale and they asked potential bidders to sign a confidentiality agreement last week. [ID:nT182490]

Bellsystem, which operates call centres, competes against Moshi Moshi Hotline Inc (4708.T) and Transcosmos Inc (9715.T). (Additional reporting by Wakako Sato in Tokyo, Stephen Aldred in Hong Kong; Editing by Joseph Radford)