UPDATE 4-RUSAL dives 9 pct as worries dog Hong Kong debut

* RUSAL shares down 9 percent from HK$10.80 IPO price

* Drop follows slump in Asian markets

* Deripaska says debut performance "reasonable"

* GDRs in Paris down 11.4 pct at 17.6 euros

* For a related column please click on [ID:nLDE60Q0IE]

(Adds analyst quote, details, updates stock price)

By Kennix Chim and Marcel Michelson

HONG KONG/PARIS, Jan 27 (Reuters) - Shares in UC RUSAL (0486.HK) fell heavily on their debut on Wednesday, as a market slump across Asia and worries over the Russian aluminium group's debt and legal issues dogged its landmark $2.2 billion Hong Kong IPO.

RUSAL's offering has caught the eye not just for its size but also its importance for Hong Kong's stock exchange, being the first non-Asian company to have its primary listing there. More Russian companies could follow as the IPO market heats up in 2010. [ID:nLDE60E0WW]

Attention was also focused on Oleg Deripaska, RUSAL's biggest shareholder and chief executive, who has gone from Russia's richest man to its most indebted oligarch.

Hit partly by poor timing as concern about China's tightening monetary policy rippled around Asian markets, RUSAL shares fell 9 percent to HK$9.84, compared with an IPO price of HK$10.80.

RUSAL had overcome heavier-than-normal scrutiny to be allowed to list in Hong Kong. Retail investors who usually swarm to Hong Kong listings were excluded from investing in the IPO before it traded because of RUSAL's debts, litigation and other issues surrounding Deripaska. [ID:nLDE60P259]

Deripaska told reporters in Hong Kong the stock's debut was "reasonable". "You see what's happening in the market around the world," Deripaska said, referring to the broad market selloff. [ID:nLDE60Q0TD]

Clad in a dark suit and tie and wearing a rose corsage matching the colour of RUSAL's logo, the Russian tycoon smiled for the cameras, raising the traditional glass of champagne to toast the start of RUSAL trade.

He presented the exchange with a 12kg aluminium Russian doll.

LUKEWARM RECEPTION

Meanwhile in Paris, where RUSAL is listing Global Depositary Receipts (GDRs) (RUSAL.PA), the stock traded at 17.60 euros by 1322 GMT, down 11.4 percent from an issue price of 19.91 euros, as it faced another lukewarm reception from investors.

"It was not on our radar screen. (But) we can't cover everything," said Yves Maillot, director of investments at Robeco Gestion.

RUSAL was represented in the French capital by its chairman Viktor Vekselberg, a co-owner of the Russian aluminium group SUAL which previously merged with Deripaska's RUSAL.

Vekselberg told reporters he hoped Deripaska would stay on at the company despite ceding majority ownership.

"I have known him for 15 years ... He is an excellent CEO and it would like him to stay for another few years. His replacement is not on the agenda," he said.

Vekselberg sought to reassure investors about the stability of the company's position in Guinea, the world's biggest exporter of aluminium ore bauxite, which is going through a period of political instability following a military coup in 2008.

The outgoing government has said it wanted proceeds from the IPO to clear damages it claims it is owed by RUSAL, but Vekselberg said the group was in talks to resolve the situation.

"We are in discussions with the new government of Guinea and I expect a settlement reasonably soon," he said.

Jackson Wong, an investment manager at Tanrich Securities in Hong Kong, said RUSAL's opening-day drop was not as bad as he had expected, given the company's complexities.

"It's not that bad considering the troubles of the firm. The stock is trying to stabilise, but I don't recommend people buying it. It's too complicated for an average investor, with the lawsuits and the valuations," said Wong, who saw some value in buying the stock at HK$9.

The IPO is aimed at helping RUSAL raise cash as part of its more than $14.9 billion debt restructuring. BNP Paribas (BNPP.PA) and Credit Suisse (CSGN.VX) were joint sponsors and global coordinators. (Additional reporting by Wee Sui Lee and Fion Li in Hong Kong, Sudip Kar-Gupta in Paris and Robin Paxton in Moscow; Written by John Bowker and Michael Flaherty; Editing by Chris Lewis and David Holmes) ($1 = HK$7.75)