REFILE-UPDATE 1-France's Dassault family seeks to oust Veolia CEO - media
(Clarifies in bullet that Dassault family unavailable for comment)
* Shareholder Dassault family trying to oust Frerot-magazine
* Veolia declines to comment, Dassault family unavailable
* Government denies interference in management appointments
PARIS, Feb 14 (Reuters) - The Dassault family, the second-biggest shareholder in French water and waste group Veolia, is seeking to oust the company's Chief Executive Antoine Frerot, according to a media report.
French weekly Le Point reported that the family is lobbying to replace Frerot with David Azema, the head of French state holding company APE, with the tacit support of the socialist French government. Veolia declined to comment.
The Dassault family owns 5.99 percent of Veolia Environnement's shares, which have lost 49 percent of their value since it acquired its stake in October 2008.
Nobody was available for comment at the Dassault family. It holds its stake via unlisted Groupe Industriel Marcel Dassault, which also has a majority holding in Dassault Aviation , maker of the French Rafale warplane.
The French state is the top shareholder in Veolia with an 8.85 percent stake, held via state bank Caisse des Depots et Consignations, Thomson Reuters data show.
An official at French Prime Minister Jean-Marc Ayrault's office told Reuters: "Matignon (the prime minister's office) does not interfere in management appointments at private companies."
Frerot's mandate runs until the group's next general shareholders meeting on April 24. He has hinted that he is keen on a second term.
Veolia shares fell 1.4 percent in light volume after the Le Point report but recovered to close 0.7 percent higher, in line with the broader index.
In February 2012, Frerot won the backing of his board to stay on as chairman and chief executive following press reports about an attempt by Henri Proglio - CEO of French state-controlled utility EDF and former CEO of Veolia - to replace him with conservative politician Jean-Louis Borloo.
Proglio was reported to be angry with Frerot, his former right-hand man, for unwinding a debt-fuelled global expansion drive led by Proglio.
Frerot has cut back Veolia's international presence to around 40 countries from 77 a few years ago and has more than halved the company's debt pile, which peaked at 16.5 billion euros ($21.6 billion) in 2008.
At the end of 2013, Veolia's net financial debt stood at 8 to 9 billion euros, the firm said this month.
In November, EDF sold its 4.01 percent stake in Veolia and the two firms are in the process of splitting up their energy joint venture Dalkia, a process that has taken years because of the acrimony between Frerot and Proglio.
French insurance company Groupama owned a 5.2 percent stake in Veolia and the Qatari government 3.79 percent at the end of June 2013, Thomson Reuters data show.
Veolia is the world's largest private supplier of drinking water - providing water for 100 million people worldwide, and treating waste water for 71 million people. (Reporting by Julien Ponthus, Geert De Clercq and Alexandre Boksenbaum; Writing by Geert De Clercq; Editing by Pravin Char)