A day after the Government referred its $9.6 billion deal to a panel of ministers, UK’s Cairn Energy Plc today said it has extended the deadline for completion of the sale of a majority stake in its Indian unit to Vedanta Resources by over a month to May 20.

Cairn Energy’s sale of 40-51 per cent stake in Cairn India and the subsequent open offer by Vedanta group for acquisition of an additional 20 per cent interest were previously to be completed by April 15.

The Edinburgh-based firm has since announcing the deal with Vedanta in August last year maintained that the April 15 deadline is sacrosanct and it will not go back to its shareholders for extension of the same.

But today, the company extended the deadline at its level and did not take a fresh mandate from shareholders, an indication that its previous stance was only to pressure the government into taking a decision on the transaction expeditiously.

The Cabinet Committee on Economic Affairs had yesterday referred the Cairn-Vedanta deal to a Group of Ministers (GoM) headed by the Finance Minister, Mr Pranab Mukherjee, as there were sharp differences over the conditions to be set for such nod.

The extension at the company level indicates that the deal provides for much more time than what Cairn and Vedanta have been harping upon and the GoM, which has to give its recommendation to the Cabinet for a decision, will not have to rush into things.

Cairn Energy in a statement said Vedanta has received market regulator SEBI’s clearance to commence an open offer for up to 20 per cent of Cairn India shares.

The open offer will be made by Vedanta’s subsidiary Sesa Goa and will open for acceptances between April 11 and 30.

“Cairn and Vedanta have extended the long stop date in the sale agreement, by which all conditions must be completed or waived (where permitted) to May 20 in order to accommodate the completion of the open offer,” the statement said.

More importantly, Cairn said SEBI has made changes in its deal with Vedanta and has struck down the call and put option.

According to the August announcement, Cairn Energy was to sell a minimum of 40 per cent out of its 62.25 per cent stake in Cairn India to Vedanta. Vedanta then was to make an open offer for an additional 20 per cent and any shortfall in the open offer was to have been made up by Cairn selling more shares with an upper ceiling of 51 per cent.

But SEBI has now disallowed this, which in effect means Cairn Energy will only sell a 40 per cent stake at Rs 405 per share to garner $6.7 billion.

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