Mumbai: The decision by the Industrial Development Bank of India (IDBI) to halt the debt restructuring programme of Ispat Industries and Jindal Vijayanagar Steel will have a domino effect on other companies whose general restructuring proposals are pending with the IDBI board. The companies include Ispat Metallics, Usha Ispat, Malvika Steel and Bellary Steel. In 1999, IDBI had approved the general restructuring proposals for refunding mega steel projects. Following this, Ispat and Jindal submitted a detailed restructuring plan that had been accepted by the IDBI board. The debt restructuring programme, including the conversion of debt into equity, was one of the major items in the restructuring proposal of Ispat and Jindal. Industry sources say IDBI has taken this decision after the finance ministry raised objections on the move towards converting debt into equity. They say that IDBI has been asked to revisit the proposal and put the conversion of the debt restructuring on hold. But IDBI officials declined to make any comments on this. The sources say IDBIs move would put the restructuring programme undertaken by other steel companies like Ispat Metallics and Usha Ispat in limbo. Since the steel industry is in the throes of a crisis, all the these steel companies are looking for fresh-fund infusion from institutions. Says an Ispat Metallics official: The steel prices are already under tremendous pressure and the restructuring exercise is the only possible way to prevent heavy losses. According to a paper prepared by IDBI in 1999, the project overrun of Ispat Industries is Rs 1,205 crore, from Rs 4,845 crore to Rs 6,050 crore. The existing institutional exposure in this project is Rs 3,028 crore, of which IDBI alone contributed Rs 894 crore. Ispat, however, required an additional Rs 1,230 crore and IDBI has proposed to contribute just Rs 328 crore. In the case of Ispat Metallics the project cost has increased by Rs 400 crore to Rs 1,840 crore. The institutions have an existing exposure of Rs 1,345 crore, in which IDBIs share was Rs 438 crore. Ispat Metallics has sought an additional Rs 270 crore and IDBI may consider an exposure of Rs 89 crore. Jindal Vijaynagars project cost increased to Rs 5,215 crore from Rs 4,968 crore. The existing exposure of institutions is to the tune of Rs 2,076 crore, which includes IDBIs share of Rs 520 crore. In the additional requirement of Rs 492 crore, IDBI proposes to contribute to the extent of Rs 151 crore. As per the recommendations of the sub-committee, the long-term viability of each project should be reestablished after taking into account the project cost overrun.