Both companies have extended the date by which all conditions must be completed or waived to 20 May 2011 to accommodate the completion of the open offer for Cairn India shares.
The two companies had earlier set an April 15 deadline to seal the deal, first announced last August.
“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, responding to demands from India’s markets regulator.
Cairn Energy has agreed to sell a majority stake in Cairn India to Vedanta , but the deal has been delayed due to a dispute over royalty payments by Cairn India’s partner, state-run Oil and Natural Gas Corp.
ONGC, which has a 30% holding in the Cairn-operated Rajasthan fields in western India, pays 100% of the royalties.
India’s oil ministry has been pushing to share the royalty burden between ONGC and Cairn India. Both Cairn and Vedanta have opposed that move. Any changes in the royalty structure would impact valuations and could jeopardise the deal.