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Egypt will buy both Mistral helicopter carriers that France originally built for Russia

The ships are alleged to be stationed in the Red and Mediterranean Seas for a possible intervention in Libya and Yemen

PARIS, September 23. /TASS/. Egypt will buy both Mistral class helicopter carriers that were built by France originally for Russia, the Elysee Palace reported on Wednesday.

"French President Francois Hollande held telephone talks with Egyptian President Abdel Fattah al-Sisi today. They agreed on the principle and the terms of the acquisition by Egypt of the two ships," French president’s spokesman told reporters.

A high-rank Russian source in the field of defense technologies told TASS that Russia has not received any queries from France so far regarding permission for reexports of Mistral helicopter carriers.

"Russia hasn't received any queries from France so far," he said in a comment on a statement by the Elysees Palace on an ostensible agreement on the sales of ships to Egypt.

The price that Egypt will pay for the two warships has not been disclosed. 

French government’s spokesman Stephane Le Foll said on Wednesday that the French Treasury "will not incur losses" as a result of the concluded deal for the sale of the Mistral helicopter carriers. However, according to data made public at a recent meeting of the foreign affairs committee of the French National Assembly, the re-equipment of the two Mistrals alone due to the dismantling of Russian equipment from them will cost "at least €300 million."

La Tribune reported on Wednesday that the Egyptian delegation was in talks with France on purchase of the two ships. 

Egyptian negotiators received permission to discuss the possible deal from President Abdl Fattah al-Sisi. According to the sources cited by the French newspaper, apart from Mistral helicopter carriers, Cairo is also interested in purchasing two Gorwind-class corvettes, but the sides cannot agree on the price. The negotiations are complicated by the fact that the French Economy Ministry has proposed an inflated price which, in Egypt’s opinion, deprives representatives of the DCNS shipbuilding company responsible for the construction of helicopter carries of "any possibility for maneuver". "Last week, Egyptians almost closed the door twice because DCNS has nothing to answer them," the newspaper said.

"It is supposed that the ships will be stationed in the Red and Mediterranean Seas for a possible intervention in Libya and Yemen," the newspaper noted.

Russia-France Mistral dispute

The €1.12 billion contract for the construction of two Mistral-type helicopter carriers for the Russian Navy was signed in June 2011. Under the contract, Russia was expected to receive the first of the two warships, the Vladivostok, in the autumn of 2014. However, Paris suspended the ship’s handover to Russia at the very last moment over Moscow’s stance on developments in neighboring Ukraine. It was planned that the second ship dubbed the Sevastopol would be handed over to Russia in the second half of 2015. But the deal was suspended like in the case with the first Mistral ship.

At the last moment Paris indefinitely suspended the transfer of the helicopter carriers, explaining its decision by the situation in Ukraine. After a long wait, Russia and France in early August reached an agreement to officially cancel the contract.

The French government said in a release then, "The decision not to deliver the two vessels was made in October 2014. We have since exported 15 billion euro in French military equipment. The French signature is respected and this particular affair has no impact on the trust placed in France. It should be noted that "the commitment to sell these Mistral-type vessels had been made in 2011." "We have since witnessed the crisis in Crimea and Ukraine, in which French diplomacy played a role" in finding a political solution, notably by means of the Minsk II agreement that came into force in February 2015. "However, the crisis is still ongoing." There are still a number of important political and field-based milestones to reach in order to fully implement the Minsk II agreement. For this reason, European sanctions against Russia remain in place. Furthermore, "the President of the Republic believed that it was not wise to increase the threat and to deliver these two ships."

Under the deal, Russia gets the money and Russian equipment installed on the vessels back, and France will then be able to use the warships at its own discretion. French media earlier reported that Paris paid Russia €949 million for the Mistral contract cancelation, and the overall sum of payment exceeded €1 billion.

Last week, the National Assembly, the lower house of the French parliament, approved a draft law on the €949.7 million ($1 billion) compensation payments to Russia for the terminated contract on the delivery of Mistral helicopter carriers. The Senate will consider the draft law on September 30.