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MOSCOW, Aug 11 (Reuters) - Russian aluminium giant Rusal said tycoon Mikhail Prokhorov has agreed to sell around a 7 percent stake to billionaire Viktor Vekselberg for $503.9 million, concluding lengthy negotiations over a sale.
Prokhorov, a minority shareholder in Hong Kong-listed Rusal, had been in talks to sell a 12 percent stake in the company to Vekselberg since last year but talks stalled in February.
Prokhorov has not said why he wants to reduce his holding in Rusal, which is 48.1 percent owned by Oleg Deripaska's En+.
After the talks with Vekselberg stalled, Prokhorov sold a 3.3 percent stake via an accelerated book build for $240 million in February, increasing Rusal's free-float..
Rusal said the stake sale to Vekselberg was still dependent on some conditions being met. Once it goes through, Prokhorov's Onexim Group will retain a 6.7 percent stake in Rusal.
The combined holding of Vekselberg and his vehicle SUAL Partners Limited will rise to around 22.80 percent of Rusal's issued share capital, the company said.
Vekselberg controls SUAL together with his partner Leonard Blavatnik.
Onexim Group declined to comment on the deal. Vekselberg's main investment vehicle, Renova, also declined to comment.
VTB Capital said in a note that Prokhorov can sell only a 1.7 percent stake out of his remaining 6.7 percent holding, without breaching shareholder agreements.
"We note that Prokhorov is able to decrease his shareholding to 5 percent without breaching the shareholder agreement, meaning that a limited overhang risk of 1.7 percent remains, in our view," VTB Capital said in a note on Friday. (Reporting by Polina Devitt; Writing by Dmitry Solovyov; Editing by Katya Golubkova and Susan Fenton)