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INTERNET GOLD MOVING ON - THE BEZEQ ERA. March 2010. Forward-Looking Statement.

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March 2010

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March 2010

INTERNET GOLD

MOVING ON - THE BEZEQ ERA

March 2010


March 2010

Forward-Looking Statement

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that are not historical facts and may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Those factors include the factors indicated in our filings with the Securities and Exchange Commission (SEC). For more details, refer to our SEC filings and the amendments thereto, including our Annual Report on Form 20-F and Current Reports on Form 6-K. We undertake no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in our expectations, except as may be required by law.


March 2010

Traded on TASE

Traded on NASDAQ

Eurocom Group overview

  • Founded in 1979

  • One of Israel’s largest privately owned holding companies with a strong presence in Israel and a growing presence internationally

  • Owned by Shaul Elovitch, Chairman of the Board of Directors and CEO (80% ownership) and Yosef Elovitch, Director (20% ownership)

  • Solid financial base coupled with strategic partnerships to ensure the strong backing necessary to accelerate growth

  • Diversified portfolio with investments in telecommunications, media, real estate, consumer electronics and financial services

Communication

Service providers

Telecom & Electronic products

Media

Investments

Real Estate

Eurocom Cellular Communications (NOKIA)

Smile Media

Internet Gold

Eurocom Capital

Finance

Eurocom Real

Estate

Radius Broadcasting

012 Golden Lines

Eurocom Capital

Underwriting

Eurocom Global

Real Estate

Eurocom Digital Communications (Panasonic)

Radio Hashfela

YES–Satellite Service

Sahar Investments

Space Communication

Pilat Media Global

D.M Engineering

Satlink Communication

Pointer

Satcom System (Gilat Satcom)

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March 2010

The IGLD / Eurocom Group:Experienced, Disciplined Leadership

SHAUL ELOVITCH Founder & Chairman 30 yrs track record of building leading communications and other businesses

PROVEN CAPABILITIES IN:

  • Strategy creation & strategic planning

  • Marketing & brand development

  • Operational & financial management

  • Management of mergers & acquisitions

  • Creation of partnerships

  • Capital raising: 4major transactions closed in last 3 years`

ELI HOLTZMAN Co-Founder and CEO since 1992

30 yrs of operational & marketing experience

DORON TURGEMANCFO since 2001 15 yrs experience in financial management; 13 years experience in communications

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March 2010

Acquisition of the controlling interest of approximately 30.7% of share capital in Bezeq

All-cash consideration of NIS 8.00 per Bezeq share, representing ~ 20% discount to Bezeq's closing price of NIS 9.72 as of February 15, 2010

012 Smile will be entitled to interim dividends thus reducing the effective final purchase price

Aggregate transaction value of NIS 6,513 million / US$1,763 million (pre Bezeq’s dividend)

Overview of Bezeq’s Transaction

Key terms

  • Funds from the sale of 012 Smile.Communications assets and current cash reserves of the Smile Group

  • Proposed capital raise

  • Assumed dividend from Bezeq (H2 2009 profits)

  • Additional long-term loan (to be completed)

  • Long-term loan from consortium of lenders, led by Bank Hapoalim

Financing

Required approvals

  • Ministry of Communications and Antitrust Commissioner

  • Prime Minister and the Minister of Communications of the State of Israel

  • All closing conditions must be satisfied within six months from signing

  • 012 Smile designees will be appointed to Bezeq’s board at the Closing

Closing

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1 Note: FX rate: US$ 1 = NIS 3.695 as of October 22, 2009


March 2010

Group’s Structure (Pre/Post transaction)

Pre Transaction

Post Transaction

Eurocom Group*

Eurocom Group

~74%

~74%

Internet Gold- Golden Lines

Free float

Smile.Media

~26%

100%

~26%

100%

Internet Gold- Golden Lines

Free float

Smile.Media

~75%

Free float

~25%

012** Smile.Communications

***

~31%

~75%

Free float

~69%

012 Smile.Communications

~25%

Free Float

Fixed-line, broadband infrastructure, data com.

100%

100%

Mobile telephonyand data

Operational assets

100%

100%

ILD, ISP,enterprise solutions

Call centreservices

34%

Source: Company information, Bezeq’s investors’ presentation

* Eurocom holds approximately a 1.6% direct interest in Smile

** 012 Smile legacy telecommunications assets were sold to Ampal on January 31, 2010.

*** through two wholly owned SPC’s (special Purpose Corporations)

49.8%

Walla!

Pay-TV (DTH)

Internet portal

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Traded on TASE


The transaction is already financed

The transaction is already financed:

1 ** Based on Bezeq’s declared dividend policy


March 2010

IGLD Group Becomes the Undisputed Leader of Israeli Telecom

Source: Source: Smile's analysis based on published market data 

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March 2010

Bezeq’s Dividend Policy: 100% Of Earnings

Source: Bezeq

1. Based on regular and special dividends paid during the fiscal year

2. Special dividend paid in February 2007

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Additional igld upside smile media holdings

Additional IGLD Upside: Smile.media Holdings

Smile.media Ltd.

e-Advertising

e-Commerce

~75M:Estimated Revenues 2010


March 2010

The acquisition of the controlling stake in Bezeq is the realization of our goal to become Israel’s leading telecom player

Bezeq is the market leader in the Israeli telecommunication market

Bezeq has a strong business profile due to its diversified lines of business in the Israeli telecommunication sectors

Bezeq has the ability to generate strong cash flows to service financial obligations

The IGLD / Eurocom Group is Entering an Exciting New Phase

Thank You!

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