REFILE-012 Smile to sell assets to help fund Bezeq buy

(Corrects to change "he" to "she" in second to last paragraph)

* Says already received offers for assets

* Plans to finance deal with debt and equity

* Expects to meet financing, closing deadlines

* Says will abide by antitrust decisions

By Steven Scheer and Tova Cohen

JERUSALEM, Oct 27 (Reuters) - Israel's 012 Smile Communications (SMLC.O) has received offers for some of its assets, which it needs to divest as a prerequisite for the purchase of a controlling stake in Bezeq Israel Telecom (BEZQ.TA).

"012 Smile has very attractive assets generating strong cashflow. We have been approached by some interested parties but at this point can't say who approached us to give offers," 012 Smile Chief Executive Stella Handler said on a conference call on Tuesday.

012 Smile, a fast growing telecoms company that offers Internet and domestic and long-distance calling services, on Sunday agreed to buy a 30.6 percent stake in Bezeq, Israel's largest telecoms group, for 6.5 billion shekels ($1.8 billion). [ID:nLP676587]

Bezeq's controlling shareholder, the Apax-Saban-Arkin group, will receive a more than 300 percent return over its purchase of the stake for 4.2 billion shekels four years ago.

012 Smile (SMLC.TA) gave few details of how it will finance the deal, in which it is buying Bezeq at 8 shekels a share, a 7 percent discount to its closing price last Thursday. "We believe we are acquiring Bezeq at an attractive price," Handler said.

Doron Ilan, 012 Smile's chief financial officer, said the company will use both equity and debt to finance the acquisition, in which funding must be secured within 120 days. He said the company was in talks with banks and institutional investors.

012 Smile's controlling shareholder, Eurocom Communications, has provided the company with an option for a loan of up to 1.2 billion shekels.

The deal also requires a host of regulatory approvals. One key question is whether the company will be allowed to keep its stake in digital satellite TV provider YES. Bezeq owns 49 percent of YES and Eurocom holds 32 percent.

When asked if 012 Smile intends to keep YES or sell it, Handler said: "We will act by the antitrust directions." She said the process will take as much as six months.

Bezeq has more than 2.5 million landline customers for a market share of around 85 percent and about 1 million broadband Internet lines. (Editing by David Holmes) ($1 = 3.71 shekels)