Eighteen foreign banks, including Standard Chartered Plc., Barclays Plc. and Deutsche Bank AG, have agreed to restructure loans to the tune of $550 million given to Jindal Steel and Power Ltd (JSPL), two people aware of the development said.

The lenders agreed to a moratorium of between three and five years on repayments after meeting JSPL chairperson Naveen Jindal earlier this month, the people cited above said on condition of anonymity.

Last year, JSPL failed to meet the repayment schedule for the April-June quarter due to stressed cash flows. The firm approached the lenders sometime in July to restructure the entire debt raised by its subsidiary JSPL (Mauritius). The lenders asked the firm to furnish additional guarantees including a stake in its overseas assets, which according to the people cited above, JSPL was averse to. In August, the lenders invoked JSPL’s corporate guarantees.

“The decision to restructure the debt has been done because the commodity cycle has improved since the company defaulted on repayments and the lenders feel restructuring the debt will help the company to improve cash flows,” said one of the two persons cited above, adding: “Naveen Jindal’s personal intervention in the discussion has also helped soothe the frayed nerves.”

“In the meeting, the lenders agreed for the recast and a formal communication in this regard is expected soon,” said the second person.

Responding to a query from Mint, a JSPL spokesperson said: “The company has all along been in close engagement with its lender partners—both domestic and international—to keep them apprised of the developments, as well as avenues and options for debt restructuring. In line with its lender engagement programme, JSPL has routine meetings with overseas lenders to appraise and discuss progressive developments that signal a new dawn for JSPL in the months to come.”

JSPL’s consolidated gross debt stood at Rs45,175.66 crore as of 30 September against Rs46,816 crore at the end of March 2016. Its consolidated net loss declined by Rs338.54 crore from Rs745.98 crore in the quarter to September to Rs407.44 crore in the quarter to December.

Since 2014, JSPL has evaluated options including selling its mines in Africa and Australia, listing its subsidiary in Oman, and listing its power business Jindal Power Ltd in India to pare debt. These efforts did not fructify. Last May, JSPL reached an agreement to sell a 1,000MW power plant in Chhattisgarh to Sajjan Jindal-led JSW Energy Ltd at an enterprise value of Rs4,000 crore. The deal value could rise to Rs6,500 crore if JSPL manages to secure fuel supply for the plant and enters long-term power purchase agreements.