EXCLUSIVE-Godiva chocolate owner Yildiz preps Japan business sale -sources

* Unit could fetch around $1.5 bln - sources

* Japan one of Godiva's most successful regions -owner

* Turkish firms grappling with lira devaluation (Changes headline; Adds context, background, bullet points)

LONDON, Sept 26 (Reuters) - Yildiz Holding is exploring a sale of Godiva chocolate's Japanese business in a deal that could fetch around $1.5 billion, according to two sources familiar with the matter, potentially letting the company pay down debt and invest elsewhere.

Godiva's Japanese business has revenue of around $350 million a year and is likely to appeal to companies or investors with experience in Japan, a fickle market grappling with an ageing population, one of the sources said.

Godiva sells its luxury chocolate through hundreds of boutiques in more than 80 countries, as well as wholesale through other stores. Its rivals include Lindt and the much-smaller Hotel Chocolat.

Yildiz, one of Turkey's biggest conglomerates, may look to use the Japanese sale proceeds to invest in other markets, one source said.

Yildiz, which also owns McVitie's biscuits, said in a statement that Japan was one of its most successful regions and continued to grow. It did not comment further.

The sources, who declined to be named as the situation is private, said the sale process for Godiva's Japanese business was expected to start in the coming weeks.

EXPENSIVE DEBT

With roots in a biscuit shop started by two brothers in Istanbul in 1944, family-owned Yildiz has grown into a global firm with western partners including Kellogg and McCormick .

It spent $850 million to buy Godiva in 2007, as well as an estimated 2 billion pounds ($2.63 billion) on McVitie's maker United Biscuits and $221 million on DeMet's, maker of Flipz chocolate pretzels, in 2014.

Yildiz, which also owns Istanbul-listed Ulker, in May agreed to refinance $5.5 billion in debt.

Turkish companies have for years relied on euro and dollar-denominated debt, attracted by lower interest rates, but a 40 percent drop in the lira has raised debt servicing costs.

Turkey's corporate sector has come under increasing scrutiny from investors and credit ratings agencies which have highlighted the risks of corporate debt restructuring if Turkish firms struggle to repay loans that helped to fuel rapid growth and overseas expansion.

In June, Bloomberg reported that Yildiz was in talks to sell its mining and brick business, Kumas Manyezit Sanayi, for an enterprise value of about $500 million.

BIG IN JAPAN

Japan is the world's sixth-biggest chocolate market, according to Euromonitor International. With estimated 2018 retail sales of $5.2 billion, Japan accounts for nearly 5 percent of the world's total.

Japan's reputation for innovation even stretches to chocolate. Nestle, for example, sells hundreds of KitKat variations there, including green tea and strawberry flavours and also premium versions.

Rival confectioners, retailers or private equity funds could be interested in buying Godiva's Japanese business, one of the sources said, noting that the business could also attract interest from diversified Japanese trading groups, which include Mitsubishi and Itochu.

Britain's Hotel Chocolat said last month that it was close to pressing the button on further overseas expansion.

Chocolate, seen as an indulgent treat, tends to be less price-sensitive than other types of food, and therefore is often more profitable.

Earlier this year, Ferrero bought Nestle's U.S. confectionery business for $2.8 billion, which analysts estimated to be more than 20 times earnings before interest, tax, depreciation and amortisation. The Godiva business could fetch a higher multiple, given its premium position. ($1 = 0.7592 pounds) (Additional reporting by David Dolan in Istanbul, editing by Louise Heavens and Jane Merriman)