UPDATE 1-Greece launches tender to sell water utility stake

* Greece launches tendering to sell water utility

* To sell 23 percent state, keep control

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ATHENS, July 13 (Reuters) - Greece has decided to launch a tender competition to sell a 23.02 percent stake in the country's second-largest water utility EYATH (TWSr.AT), the finance ministry said on Monday.

The government owns 74 percent of EYATH, the water supply company in the northern Greek city of Thessaloniki.

Greece has said it is looking for a strategic investor in EYATH as part of plans to raise 1 billion euros ($1.4 billion) from state asset sales this year to reduce public debt.

The ministry said it will not reduce its holding in the company below 51 percent. EYATH is also 5 percent-owned by France's Suez Environnement (SEVI.PA).

A finance ministry official told Reuters last month that National Bank (NBGr.AT) and HSBC (HSBA.L) had been picked as advisers in the government's search for a strategic investor.

Greece will continue to control the price at which EYATH sells water and will also retain control over the company's water and sewerage grid, the statement said.

The sale will not affect workers, the statement added.

The company, with a market capitalisation of about 260 million euros ($361.7 million) has seen its shares rise by 70 percent since the start of the year, outperforming the Athens general index .ATG, up 18 percent in the same period. ($1=.7189 euros) (Reporting by Harry Papachristou; Writing by Renee Maltezou; Editing by Greg Mahlich)