A new deal to replace Germany's scrapped Rheinmetall warship programme could cost the government up to €12 billion ($13.7 billion), according to a finance ministry document, as the defence firm assesses the impact on its earnings.
Berlin chose Thyssenkrupp's marine unit TKMS over Rheinmetall after delays and expected cost overruns, dealing a major setback to Germany's largest defence company.
The draft document, seen by Reuters on Thursday and due to be presented to parliament's budget committee, shows the government now plans an initial order for four Meko A-200 warships from TKMS worth about €6.63 billion.
The deal also includes an option for up to four more for around €5.3 billion, according to the document.
According to the draft, ordering four ships initially rather than eight was a key reason the unit cost was relatively high, at about €1.57 billion per vessel.
Rheinmetall said on Thursday it was assessing any additional impact of the cancelled order for six F126 frigates on its full-year outlook.
The cancellation will reduce the company's quarterly order intake by about €20 billion, it said, adding that without mitigating measures the hit on 2026 revenue could reach up to €300 million.
Rheinmetall said it would provide a fuller assessment when it reports second-quarter results on August 6.
(Reporting by Markus Wacket, Writing by Rachel More. Editing by Elaine Hardcastle and Mark Potter)