A worker at a factory of Dongbei Special Steel in Dalian, Liaoning province, Feb 14, 2017. [Photo/VCG]

SHENYANG - A restructuring draft plan for Dongbei Special Steel was passed at a creditors meeting on Tuesday and will be implemented after court approval.

A total of 1,911 creditors cast their votes both on site and online at the meeting, presided by the Dalian City Intermediate People's Court.

According to the plan, debt below 500,000 yuan ($74,000) for each creditor will be paid off, with any excess debt over 500,000 yuan to be paid in cash in certain proportions or swapped for equity, based on the choice of the creditor.

Two Chinese companies, which agreed to invest a combined 5.5 billion yuan, were introduced to the restructuring process and will hold 53 percent of the steel company, the provincial state-owned assets supervision and administration commission said.

The 111-year-old steelmaker, headquartered in Dalian in Northeast China's Liaoning province, has defaulted on corporate debt nine consecutive times, with debts amounting to several billion yuan triggering bankruptcy and restructuring proceedings on Oct 10.

Under downward pressure, China's steel sector, already burdened by overcapacity, has been hurt by shrinking demand.