Rusal defaults on $700 million payment for Norsilk stake

Russian aluminium major Rusal has defaulted on payment of $700 million in cash payment to billionaire Mikhail Prokhorov for his 25 per cent stake in mining giant OAO GMK Norilsk Nickel.

Rusal is believed to have agreed on a new deadline, according to sources at Prokhorov's investment vehicle Onexim.

Debt-ridden Rusal had already paid a major chunk of the $7 billion in cash payment it owed Prokhorov but could not meet the 24 October deadline for the remaining $700 million.

Prokhorov was to receive a 14 per cent stake in Rusal and an estimated $7 billion in cash, for his 25 per cent stake in Norilsk Nickel, the world's biggest nickel miner.

UC Rusal, controlled by Russian tycoon Deripaska Deripaska, was locked in a battle for control of Norilsk Nickel, once worth more than $40 billion (€32 billion, £25 billion) and now worth around $10 billion.

But that money has been lost with Russia's tumbling stock market and Deripaska now faces a possible divestment of his Norilsk stake.