Early April 15 was the deadline set by the two companies to seal the long-pending deal. The new deadline set by the two companies is May 20.
"Cairn and Vedanta have agreed that the put and call options shall not be enforceable or exercisable. Vedanta has also agreed that its pre-emption right shall not be enforceable or exercisable," Cairn said, giving in to demands from India's markets regulator.
One of the disputes in this deal is Oil and Natural Gas Corporation (ONGCs) take on the royalty payment. Currently 100% of the royalty is being paid by ONGC which has a 30% stake in the Cairn operated Rajasthan Block. ONGC wants Cairn to share the royalty burden, a move Vedanta and Cairn are opposing. According to analysts, such a change in the royalty structure will make the deal expensive for Vedanta.
On Wednesday, the government of India referred the matter to a panel for further review. If it goes through this deal, it would be the largest in India's oil and gas sector.
Sesa Goa, subsidiary of Vedanta, announced on Wednesday that it would go ahead with its open offer, showing optimism for the deal. The open offer by Sesa Goa would open on April 11 and close on April 30.
In its press release, Cairn stated that the put and call options exercisable by Cairn and Vedanta, and pre-emption right exercisable by Vedanta have been removed from the terms of the sale agreement after objections from market regulator, the Securities and Exchange Board of India (SEBI).