Cairn Energy has extended the deadline for completing the $9.6 billion sale of its Indian assets to Anil Agarwal-controlled Vedanta Resources.

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This is the third extension in completing the transaction, announced on August 16 last year. The second deadline ends today.

Significantly, the Scottish oil and gas explorer has set no new deadline this time — a move analysts say reflects its intention to wait rather than throw in the towel as it waits for New Delhi to stamp its approval on the country’s largest cross-border merger and acquisition deal.

In a statement on Thursday, Cairn Energy said the two companies agreed to “extend the closing date on their sale and purchase agreement in order to secure the necessary consents and approvals from the government of India to complete the transaction.”

“I don’t think either party will call off the deal now. If they had to, they would have done it on April 20 (the first deadline to complete the deal after the earlier date for completing the transaction expired on March 15),” said a Mumbai-based analyst at a foreign brokerage house. “I think they are close (in completing the deal) and it’s just a matter of time,” said the analyst, who did not wish to be identified as he is not authorised to speak to the media. 

Cairn and Vedanta, both London Stock Exchange-listed companies, have been left frustrated by New Delhi’s indecision over whether or not to approve of the transaction, which could see Vedanta fulfilling its desire of becoming a global resources player rivalling Australia’s BHP Billiton.

Oil minister S Jaipal Reddy and law minister M Veerappa Moily, along with finance minister Pranab Mukherjee, telecom minister Kapil Sibal and Planning Commission deputy chairman Montek Singh Ahluwalia, are members of the group of ministers that is to meet on May 27 to decide the fate of the transaction.

The Congress-led government is debating if a settlement of the royalty dispute that Cairn India is locked in with state-controlled Oil and Natural Gas Corporation (ONGC) should be set as a precursor to the sale. ONGC, which pays 100% royalty on production from Cairn’s Rajasthan block to the Rajasthan government despite holding only 30% stake, wants the agreement to be tweaked. Both Cairn and Vedanta strongly disagree with the suggestion, saying any change in financials would make the deal less appealing for their investors.

Vedanta has tightened its grip over Cairn India after acquiring an 18.5% stake in it —- 10.4% stake from Malaysia’s Petronas for $1.5 billion and 8.1% stake through a mandatory open offer to minority shareholders made by its iron ore subsidiary, Sesa Goa.