(Adds company comment)
By Robert Muller
PRAGUE, Dec 17 (Reuters) - Shareholders in O2 Czech Republic on Wednesday approved extending a loan of up to 24.8 billion crowns ($1.1 billion) to the telecom company's majority owner PPF, the investment group of the wealthiest Czech, Petr Kellner.
PPF had requested the loan in October to pay off part of the debt it took on when acquiring a majority stake in the group this year, hitting shares as investors worried about future dividend payments.
Despite angry protests by many small shareholders, the company's owners backed providing the loan to PPF, with 92.6 percent of those present voting in favour.
Billionaire Kellner's PPF holds 83 percent of the company after lifting its share through buybacks since it first acquired a 65.9 percent stake in the company from Spain's Telefonica in January.
Shares closed down 1 percent at 245 crowns on Wednesday, trading 17 percent below a buyout offer price launched in May.
Small shareholders voiced their anger at the move on Wednesday, shouting "Lies" and "Shame on you" at the more than four-hour long general meeting.
The loan is intended to settle part of a 2.3 billion euro syndicated loan PPF took when it paid 2.5 billion euros for Telefonica's stake this year. It can also go toward buying additional shares.
O2 Czech Republic said it would seek a six-year syndicated loan of up to 31.8 billion crowns to fund the PPF loan, consolidate debt and fund business activities.
The company's Chief Executive Tomas Budnik said it would get better financing conditions being part of PPF, which owns companies across eastern Europe.
PPF got low take-up in a mandatory buyout offer this year. Analysts have said they expected PPF would eventually aim to take full control of the company.
O2 Czech Republic has seen sliding profits in recent years as growing competition hits revenue. It reported third-quarter net profit down 7.1 percent year-on-year to 1.25 billion crowns.
Shareholders in June approved an 18 crown per share dividend from 2013 profits, falling from a 30 crowns the year before.
Budnik declined to comment when asked about future dividends in an interview with economic news website Roklen24.cz in November. He said the company had no formal policy.
"The financial assistance (to PPF is) unfavourable due to the potential of lower future dividend payments," J&T analysts said in a client note before the shareholders meeting.
$1 = 22.2220 Czech crowns Writing by Jason Hovet; Editing by Elaine Hardcastle and Robin Pomeroy