New Delhi: London based Cairn Energy PLC has extended by more than a month the deadline for the sale of a stake in its Indian unit to Vedanta Resources by over a month to May 20. The decision was taken after a day the government referred its USD 9.6 billion deal to a panel of ministers.

Cairn Energy's sale of a 40 to 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.

But today, the company extended the deadline at its level and did not take a fresh mandate from shareholders. This was a clear indication that the company’s 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 Finance Minister Pranab Mukherjee as there were sharp differences over the conditions to be set for such nod.

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.

The statement also said that 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.

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

As per 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 USD 6.7 billion.

SEBI has also notified Vedanta that the put and call options exercisable by Cairn and Vedanta respectively and the preemption right exercisable by Vedanta in connection with the transaction must be removed from the sale agreement as they do not comply with certain Indian securities regulations.

Cairn Energy is expected to have a residual interest of between approximately 10.6 per cent and 21.6 per cent of the fully-diluted share capital of Cairn India after the transaction.