Majority shareholders of Atlas Iron Ltd. on April 27 approved the withcreditors that will hand 70% of the company to creditors in return for erasingapproximately half of the company's debt, TheSydney Morning Herald reported.

Ahead of the shareholder vote, Chairwoman Cheryl Edwardes had warned that the ASX-listedcompany would be placed in administration unless the deal went through.

The proposed swap — which will give 70% of the company'sshares to 71 lenders in exchange for slashing term B loan to US$135 millionfrom US$259.3 million — was already been approved by creditors. Therestructuring agreement was reached in December 2015.

The deal is conditional upon the approval from Federal Courtof Australia, where hearing is scheduled for April 28.

Managing Director David Flanagan said the company willcontinue to use forward sales and hedging deals to create more pricingcertainty, even though the prices of iron ore have risen 45% since the start ofthis year to US$62.78 per tonne on April 26.

Following completion of the restructuring, the company'scontractors will be replaced by some of its lenders including Western AssetManagement Company, Sankaty Advisors, Marathon Asset Management, Maru Sky andCommonwealth Bank of Australia, with each to become substantial holders withover 5% stake.

The company's nonexecutive directors Jeff Dowling and KenBrinsden will step down to make way for three directors nominated by the newshareholders following the deal, the report said.