Shares in Arrium are in a trading halt while the steel maker and iron ore miner works out a plan to deal with its $2 billion debt.
Its lenders have rejected a $US927 million recapitalisation by GSO Capital Partners, which would have given the Blackstone subsidiary a 15% holding.
“Arrium requests a trading halt pending the release of an announcement updating the market in relation to the recapitalisation of Arrium and its discussions with its lenders,” the company said.
The company has been caught in the global fall in commodity prices and in the steel glut caused by over production in China.
At stake is the Whyalla steelworks in South Australia and about 1000 jobs. The company has said it is looking at mothballing the plant because the steelworks are uneconomical without major cuts and an injection of capital.
Across the company, about 300 employees went in the first half and another 400 are due by the end of the financial year.
The company posted a half year loss of $235.8 million. Sales revenue was down 14% to $2.76 billion.
Arrium shares last traded at $0.022.