After cancelling the sale to Russia, France finds itself lumbered with two giant Mistral warships which it will find "extremely difficult" to re-sell and cannot afford to keep, say experts.

The pair of 200-metre (650-foot) amphibious helicopter-carriers were due for delivery to Russia by the end of this year in a deal worth an estimated 1.2 billion euros ($1.3 billion).

Instead, they are docked in the western French port at St Nazaire after Paris put the deal on ice in response to Russia's aggression in Ukraine last year.

The deal was formally cancelled on Wednesday, and within hours French Defence Minister Jean-Yves Le Drian said "several" countries had expressed an interest in buying the ships, without giving details.

"It's desirable that we sell them as quickly as possible," he told RTL radio.

But experts say France will have its work cut out in offloading them.

"Selling someone ships these days is extremely difficult," said Ben Moores, a defence analyst for IHS Jane's in London.

"They will have to seriously cut their price to make it attractive to another country. It could take years."

However, French President Francois Hollande doesn't see it that way.

"There will be no difficulty in finding buyers," Hollande told reporters Thursday about selling the two Mistrals, speaking in Egypt where he attended a ceremony for the extension of the Suez Canal waterway.

Plenty of militaries are in need of new warships -- IHS Jane's estimates there are 13 countries needing a total of 26 amphibious assault vessels over the next decade.

In theory, Moores said, the Mistrals are very re-sellable "because the only big thing Russia changed is they put their own communications system onboard, which is not hard to take out these days."

But most countries with the money and desire to buy boats of that size have their own ship-building industries.

"The problem France will have to overcome is domestic ship-building lobbies. If a country like Turkey decides to buy these ships, that would mean thousands of people would be laid off from a shipyard," said Moores.

"And there's a question of national pride in saying 'we build our own ships'."

- 'Absolutely have to sell' -

Meanwhile, France already has three Mistrals in its fleet, and doesn't have the funds to add two more.

"Keeping them would mean not only paying for them, but also making them run -- creating crews, docking them, maintaining them," said a senior procurement officer in the French military, who was not authorised to give his name.

"We absolutely have to sell them."

But only a handful of countries will be able to make use of them, said Admiral Alain Coldefy, a former inspector general of the French military.

"We need countries that want to intervene in the world... with the resources to buy such sophisticated, top-of-the-line boats. They also need well-trained crews."

He said the ideal situation would be for the European Union to purchase them, but years of effort to bolster Europe's collective defence have made little headway.

An added problem for France will come when Russia comes to dismantle its communications equipment.

"The Russians will no doubt take their time in a bid to steal as much technology as possible, as usual," said Coldefy.

"They say they can make these boats themselves, but really they are far behind."

According to IHS Jane's, the 13 countries needing a warship in the next decade -- and with any hope of buying one from France -- are Australia, Belgium, Brazil, Canada, Chile, Germany, India, Japan, Malaysia, The Netherlands, Singapore, Turkey and Venezuela.

Of those, only India and Turkey need a ship in the next four years, and New Delhi recently said it would stop importing warships and try to make its own, while Ankara aims to become a net exporter of naval vessels.

"Others could come up," said Moores. "Especially associated with tensions in the South China Sea" where China's claim to regional control have raised concerns among its neighbours.

"But only a few of these ships get sold every year, so it's going to be tough."

Hollande, Putin reach agreement on cancelled warship deal
Paris (AFP) Aug 5, 2015 - France said Wednesday it had agreed a compensation deal with Russia for failing to deliver two Mistral warships due to the Ukraine crisis, drawing to a close a months-long diplomatic and commercial spat.

The fate of the ships has long plagued Franco-Russian ties following Paris' decision in November to put the 1.2-billion-euro ($1.3-billion) deal on ice as the West slapped sanctions on Moscow over its annexation of Crimea and backing of rebels in Ukraine.

The French presidency said in a statement that Russia would be "fully reimbursed" for the two helicopter carriers, which France will keep.

It added that all Russian equipment already installed on the ships will be removed and handed back to Moscow.

Russia, meanwhile, said France had already returned the money and considered the matter closed.

"The president of Russia and the president of France took a joint decision to annul the contract," the Kremlin said in a statement after a phone conversation between the two leaders.

"France has already transferred the funds and after the return of the equipment will assume full right of ownership and can use the ships as it sees fit," it added.

A Russian military source on Tuesday told state-run news agency TASS that a group of Russian specialists will be sent to France in September to dismantle and return communication equipment onboard the ship.

- How much compensation? -

Neither statement mentioned the issue of any compensation payable to Russia.

Paris had proposed to pay back 785 million euros in cash already paid out by Russia, but Moscow wanted around 1.2 billion euros in compensation on top of that, arguing that training costs for the crews and building port infrastructure in Vladivostok should be reimbursed.

It appeared that Paris got its way, as the French presidency statement said Russia would "exclusively" be reimbursed "sums advanced as part of the contract."

The first Mistral had been due for delivery in 2014, while the second was to be delivered this year.

But as Russia and the West remained locked in their worst standoff since the Cold War over the Ukraine crisis, France's Western partners said any delivery of ships would undermine their efforts to isolate Moscow over its 2014 annexation of Crimea and support of separatists in eastern Ukraine.

In June last year, US President Barack Obama had urged Paris to "press the pause button" on its deal with Russia, signed in 2011.

The EU and US have slapped damaging sanctions on Moscow, and while there have been repeated attempts to negotiate an end to clashes between Kiev and the pro-Russian rebels in the east, none have held out.

The 16-month war in the European Union's backyard has killed nearly 7,000 people and Kiev and its Western allies fear it may turn into a "frozen conflict" in which low-level violence becomes a constant menace that leaves much of eastern European on alert.

Earlier this year, Hollande said that the conditions for delivery of the ships were "still not right".

And in April, in a sign that the deal was on rocky ground, Putin had downplayed the importance of the ships but insisted that the French side reimburse Moscow "all expenses" if the contract were to be terminated.