CREDITORS in China’s Bohai Steel Group have agreed to extend the maturity of their loans and lower the interest rates under a second restructuring plan for the troubled steelmaker, according to financial magazine Caixin on Sunday.

    Bohai Steel will also divest some of its assets, a committee of creditors have decided in the early stage of the revamp, said Caixin, adding the restructuring was still under discussion.

    China’s steelmakers are in the eye of a storm as the government moves to slim down bloated industries, including steel and coal, to make the economy more efficient and address a supply glut that has hammered coal and steel prices.

    The city government of Tianjin, which owns Bohai Steel, set up the committee after signs that it might struggle to fully repay 192 billion yuan (US$29.64 billion) in debt, Caixin reported last month.

    Creditors include the Tianjin branch of Bank of Beijing Co. and 105 other financial institutions, the magazine reported, including several trust companies such as Tianjin Trust, Beifang Trust and Guomin Trust.

    Chinese trust firms, a lynchpin of the nation’s non-bank financing system, typically take in funds from retail investors and lend them at relatively high rates.

    China’s steel and coal sectors have been under immense pressure from an extended slowdown in the nation’s real estate industry, a major consumer of basic materials and power.

    The government has recently announced plans to close large amounts of excess capacity and lay off up to 6 million workers.

    The government has earmarked 100 billion yuan to help workers relocate and retrain, but many appear to be shifting into lower wage sectors including farming and cleaning. (SD-Agencies)