* Rusal remains loss-making for the second year in a row
* Is trying to agree new deal with lenders before March 31
* Involves syndicated facilities amounting to $3.7 billion
* Aluminium producer posts $3.2 billion loss for 2013
(Writes through to focus on talks over debt, adds details, context)
MOSCOW/HONG KONG, March 28 (Reuters) - Rusal, the world's largest aluminium producer, could default on some of its multi-billion dollar debt if it fails to reach a new deal with creditors by Monday, it said after reporting its biggest annual loss since 2008.
The company's earnings have been hammered by low aluminium prices, which in 2013 fell back to levels last seen in the aftermath of the financial crisis.
Rusal won a court ruling against the London Metal Exchange (LME) on Thursday derailing plans that could have depressed prices further by bringing more metal currently tied up in warehouses on to the market.
Yet the market remains oversupplied, weighing on price expectations - and Rusal, with a net debt of $10.1 billion, is one of the most indebted Russian metals and mining firms.
The company has entered into negotiations with lenders to amend the terms of syndicated facilities amounting to $3.7 billion of debt in order to defer repayments and modify covenants, Rusal said in its 2013 earnings report on Friday.
"Management does not expect to complete these negotiations before 31 March 2014, which is when the financial covenants will be next tested and a breach of certain existing financial covenants will result unless a waiver is obtained from the syndicate beforehand," the company added.
If Rusal is unable to renegotiate terms, the lenders could declare a default and trigger cross default provisions in its other recently renegotiated loan facilities, the company said.
Rusal did not say which renegotiated facilities a cross default could affect. It recently completed restructuring negotiations with state lender Sberbank on $4.9 billion of debt and Gazprombank on $660 million.
The $3.7 billion of syndicated facilities includes loans of about $1 billion from Russian lenders and the rest from international creditors. The firm has received the approval to amend the terms from lenders covering 75 percent of this amount - including the Russian lenders - but must receive approval from all creditors before March 31, it said.
If the company is able to defer repayments and modify covenants, it would have to return $0.4 billion to lenders in 2014, $1 billion in 2015 and $2.1 billion in 2016. This schedule would allow the company to maintain a sustainable cash position in anticipation of market rebound, Rusal said in a presentation.
The company also said it had secured additional financing from a major customer and identified several non-core assets which may be sold to raise cash. It did not name the customer or specify which non-core assets.
However, it said that it did not plan to sell its stake worth $7 billion in Russian nickel producer Norilsk Nickel and that it had secured $400 million in a prepayment agreement with commodities trader and mining group Glencore Xstrata Plc for alumina supplies.
$3.2 BLN LOSS
Rusal posted a $3.2 billion loss for 2013, hurt by $2.2 billion in impairment charges. It was its biggest annual loss since 2008 when its net loss reached almost $6 billion. The company remains loss-making for the second year in a row.
Its fourth-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $101 million, from $221 million a year earlier and missed the average forecast of $120 million in a Reuters poll of six banks.
Full-year revenue was down 10 percent at $9.8 billion after Rusal shut down loss-making capacity and aluminium output fell 8 percent to 3.9 million tonnes. Rusal said the average LME aluminium price fell 8.6 percent in 2013 to $1,845 per tonne.
Shares in Hong Kong-listed Rusal fell as much as 4 percent after the firm's earnings were published, but rebounded later and were up 2.9 percent by market close on Friday, against a 1.1 rise in the Hang Seng Index.
Sergey Donskoy, metals and mining analyst at Societe Generale, said investors had reacted positively to the LME court ruling and expected Rusal to reach a deal with creditors.
"They still have time to agree with lenders," he said. "I think they're more likely (to reach a deal) than not," he added.
(Reporting by Polina Devitt in Moscow and Polly Yam in Hong Kong; Additional reporting by James Pomfret and the Hong Kong bureau; Editing by Pravin Char)