France will lose €250mn from resale of Mistrals to Egypt

France may lose up to €250 million from the sale of two Mistral helicopter carriers to Egypt, which were originally built for Russia, according to the French Senate's Finance Committee.

The loss could have been more than €1 billion without the Egyptian deal and push France’s budget deficit up to €556.7 million.

"Excluding the sale to Egypt, France would have to cover costs of around €1.1 billion. If the deal with Egypt goes through, the cost may be reduced to €200 to €250 million," the French newspaper La Tribune cited a statement from the committee.

Paris intends to sell the warships to Egypt for €950 million, which includes the costs of training 400 Egyptian sailors in France. The Mistrals are expected to be delivered in March 2016 after Egypt agreed to buy the carriers earlier this month.

The cost is the same amount of money Paris paid Moscow as compensation for cancelling the Mistral deal. However, there was also a penalty clause in the contract if France failed to deliver the ships on time. So France is expected to lose more than the official €250 million.

France and Russia signed a $1.3 billion contract for the Mistral ships in 2011. The contract specified the two helicopter carriers would be delivered to Russia, the first in 2014 and the second in 2015. Russia was to partly manufacture the hulls and provide its own electronic equipment for the warships. Later, the French government decided not to hand the vessels over to Moscow, following Crimea’s reunification with Russia and the outbreak of the armed conflict in eastern Ukraine.

On Tuesday, members of French Senate’s International Affairs Committee admitted that France pulled out of the Mistral deal with Russia because of the external pressure from NATO.

The Mistral ships can carry helicopters, tanks and hundreds of troops, and are equipped with a sophisticated command-and-control system.