Rheinmetall Seeks 12 Billion Euros From Germany to Save Frigate Program

Rheinmetall is seeking about 12 billion euros ($14 billion) from Germany to take over the country's troubled F126 frigate programme, lifting the total cost of six warships to roughly 14 billion euros, the Financial Times (FT) reported on Wednesday.

Citing people familiar with the talks, the FT said Rheinmetall's naval arm laid out terms after six months of due diligence on a deal that would see it replace Dutch shipbuilder Damen on the delayed project.

Discussions on frigates have not been concluded, a German defence ministry spokesperson said on Wednesday.

The defence ministry has previously said that Damen had fallen far behind schedule on the F126 contract and that NVL, or Naval Vessels Luerssen, which was acquired by Rheinmetall in March, could step in as general contractor.

"There are extensive consultations ongoing with two large companies," a ministry spokesperson told Reuters on Wednesday.

According to the FT, the offer by Rheinmetall's naval arm includes an inflation clause and a planned first-ship delivery in 2032, four years later than first planned.

A spokesperson for Rheinmetall's naval unit said a first ship could be delivered in 2032, or even earlier if certain prerequisites are met.

"The exact timeline for the planned entry into service will be communicated jointly with the contracting authorities following the completion of the project acceleration and optimisation phase," he said.

Berlin is also planning to buy smaller "off-the-shelf" MEKO A-200 frigates from TKMS at about 1 billion euros each, which one source described as leverage in the Rheinmetall talks, according to the FT.

When contacted by Reuters, TKMS said it signed a preliminary contract to deliver the first MEKO A-200 ship to the German military by the end of 2029 and to prepare the construction of four frigates.($1 = 0.8484 euros)

(Reuters)