LONDON, July 26 (Reuters) - Spain's Cellnex is exploring a sale of a minority stake in its Nordic operations that could value the unit at to 1 billion euros ($1.11 billion), people familiar with the matter said, as the company looks to pay down debt.

The telecoms group is working with bankers at AZ Capital, a Spanish boutique financial advisory firm, to gauge interest in its Swedish and Danish operations, said the people, who spoke on condition of anonymity.

A sale process is expected to kick off later this year, one of the people added. However, the plans may still be changed or dropped, they said.

Spokespeople at Cellnex and AZ declined to comment.

Following years of frenzied growth through mergers and acquisitions, Cellnex has changed its strategy to focus on cutting debt and gaining investment grade as rising interest rates are hurting highly leveraged companies.

Activist hedge fund TCI, which is one of Cellnex's largest shareholders, launched a campaign earlier this year to demand a board reshuffle and to accelerate the appointment of a new CEO.

At the end of the first quarter of this year, Cellnex controlled 1,576 sites in Denmark and 2,906 in Sweden.

Cellnex does not break down financials for the two countries, which are part of its 'rest of Europe' unit that includes Netherlands, the UK, Switzerland, Ireland, Portugal, Austria, Denmark, Sweden and Poland.

That unit reached adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 264 million euros in the first quarter.

Two of the people said any deal could value the operations in Denmark and Sweden in the region of 1 billion euros.

"We are open to consider (selling) minority stakes, maybe even (to) local investors... which might be interested in order to invest in certain areas of Europe," Cellnex CEO Marco Patuano said in March following the company's full-year results.

"Obviously, always at the right valuation, always at the right conditions."

Cellnex manages more than 138,000 sites in Spain, Italy, France and through its rest of Europe unit. Its net debt stood at 20 billion euros at the end of the first quarter.

($1 = 0.9033 euros) (Reporting by Andres Gonzalez and Amy-Jo Crowley, Editing by Louise Heavens)