The largest private iron and steel enterprise in north China will begin restructuring following bankruptcy, local authorities said on Thursday.

According to Yuncheng City government in Shanxi Province, Haixin Iron and Steel Group, which has filed for bankruptcy, will receive 3.7 billion yuan (about 582 million U.S.dollars) from a new investor to settle its debts.

Production at Haixin was suspended in March 2014 due to overcapacity, a stagnant market, as well as tightened credit and management issues. The company filed for bankruptcy in November.

According to a plan approved by the local court, Jianlong Heavy Industry Group will take over Haixin after paying no less than 3.7 billion yuan to settle Haixin's debts.

Haixin will change its name to Shanxi Jianlong Steel Holdings Ltd.

Jianlong Group, established in 1999, is mainly engaged in resource exploitation, iron and steel production, shipping, shipbuilding and electrical machinery.