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...more atFrance to Sell, Lease Back Major Weapons to Raise Cash for Defense
published Feb 11, 2015)
PARIS --- Faced with a shortfall of €2.2 billion in its 2015 defense budget,
the French defense ministry is preparing to sell and lease back as many as six Airbus A400M airlifters
and two or three FREMM multipurpose frigates this year.
The cash received from the sale of the weapons will be paid into the defense budget,
and the ministry will lease the same equipment back from special “project companies” –
themselves owned and bankrolled by the French state --
to which the MoD will make long-term lease payments.
The need for innovative financing solutions,
strongly backed by Defense Minister Jean-Yves Le Drian,
stems from the fact that the defense procurement budget will have a total funding shortfall of €5.5 billion over the duration of the 2014-2019 multi-year program law.
“Unless we change our budget mindset, we’ll run straight into the budget wall,”
French defense procurement chief Laurent Collet-Billon told reporters here Feb 9.
He said that current plans call for the first “project companies” to be formed this summer, although many details remain to be worked out.
Such a leaseback arrangement,
common in the private sector and particularly in commercial aviation,
will be authorized for France’s defense administration by the new economy reform bill,
known as the Loi Macron after Economy Minister Emmanuel Macron, that is now being debated in Parliament.
According to current plans,
the “project companies” will be state-owned and funded by the government
with the proceeds from the sale of television broadcast frequencies (about €2.6 billion),
from the sale of state shareholdings in private-sector companies (no estimate),
from the sale of surplus military real estate (about €500 million) and from other sources.
Ultimately, DGA plans to extend the sale and leaseback arrangements to other types of equipment,
Collet-Billon said, such the defense ministry’s fleets of C-295 light transport aircraft and of over 500 military helicopters.
Other equipment could also be covered, but he excludedequipment intended for direct combat, such as tanks or armored vehicles.
http://www.defense-aerospace.com/articl ... -cash.html .