Troubled Indian steelmaker Bhushan Steel is in talks with lenders to restructure its debt, Kallanish learns from the firm.

Reports suggest Bhushan is seeking to restructure around $3.7 billion of long-term loans. The firm said last month it’s “constantly facing stress in cash flow,” with total debt estimated to have more than doubled in the last four years (see Kallanish 28 February). Bhushan’s creditors may ask for a claim over managing director Neeraj Singal’s stake in the company and restrict dividend payments, according to reports.

“The matter regarding the realignment of debt maturity profile is at the discussion stage with bankers,” the steel producer says in a stock exchange statement. “The relevant information in this regard would certainly be announced to the [stock] exchanges under clause 36 of the listing agreement as soon as the same is finalised and approved by the bankers concerned."

Singal and his family have a 63% stake in the company, according to exchange filings. Singal was last year arrested and subsequently released after Bhushan was cited in an alleged bribery scandal involving an Indian bank.

Last July, before Neeraj Singal’s arrest, Bhushan said it was in the final stages of a $3.2 billion plan to boost its capacity and produce high-value steel products. Last month the producer said it plans to sell the oxygen plants at its steel mill in Orissa in order to improve cash flow.