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Arrium lenders reject recapitalisation

Shares in Arrium are in a trading halt ahead of an update by the iron ore miner and steelmaker on the recapitalisation of the company.

Arrium, which is struggling against growing debt and low iron ore prices, said on Monday it will also update the market on its talks with lenders after they rejected a recapitalisation plan involving GSO Capital Partners.

The steelmaker's shares, which last traded at 2.2 cents, will remain in a halt until the start of trading on April 6, or when the announcement is made to the market - whichever is earlier.

On February 22, South Australia-based Arrium announced that GSO had agreed to provide up to $US927 million in funding to Arrium so Arrium could cut its debt and restructure its steel and mining businesses.

The announcement followed a warning by Arrium that it could mothball its Whyalla steel plant and mining operations - putting thousands of jobs at risk - if it were unable to reduce costs.

In February Arrium booked a first-half loss of $235.8 million, and said its debt had ballooned to $2.08 billion by December-end, from $1.75 billion six months earlier.