China's state-owned Sinosteel Corp. has gained approval from the State Council to restructure its debt, according to a statement released on the company website Sept. 29.

The company did not reveal further details about the plan but The 21st Century Business Herald, citing separate anonymous sources, reported on the same date that of Sinosteel's total debts worth around 60 billion Chinese yuan, about 27 billion yuan will be replaced by multiple tranches of a six-year convertible bond.

Starting from the fourth year, the debt may be converted into equity. This was the first time that a Chinese state-owned company has been allowed to restructure its debt in this manner, the report said.

The steel producer began defaulting on bank loans in September 2014 and has been under investigation by the central government since December 2014, which concluded the company held debts totaling more than 100 billion yuan as of Dec. 31, 2014, according to the report.

Sinosteel could not be reached for immediate comment.

As of Sept. 28, US$1 was equivalent to 6.68 Chinese yuan.