UPDATE 1-Russia UC RUSAL Q1 profit close to zero-paper

MOSCOW, April 30 (Reuters) - Indebted Russian aluminium company United Company RUSAL had no profit in the first quarter of 2009 and expects only a small profit for the year, board chairman Viktor Vekselberg told Vedomosti daily on Thursday. "UC RUSAL has no profit for the moment. We were close to zero in the first quarter, although may have a small profit for the full year," Vekselberg, who owns a sizeable minority stake in UC RUSAL, told Vedomosti in an interview. He also said Russian state bank VEB could issue bonds convertible into UC RUSAL shares to restructure the $4.5 billion the company, controlled by billionaire Oleg Deripaska, owes it. Another option for UC RUSAL would be to sell its 25 percent stake in metals company Norilsk Nickel pledged to VEB, Vekselberg said, adding that its value would rise as nickel prices bottom out. "We can just sell it and repay the debt," he said. "There are those looking to buy it." The world's largest aluminium producer is in talks to restructure debts with foreign lenders after last month securing a two-month freeze on the $7.4 billion it owes to more than 70 international banks. UC RUSAL saved $554 million in the first quarter of 2009, half of its $1.1 billion target for the year, after launching a cost-cutting programme to combat a decline in aluminium prices. The company's aluminium production fell 7.2 percent to 1.0 million tonnes in the first quarter. UC RUSAL plans to cut full-year 2009 output by 11 percent.