Bulgaria signed an agreement Tuesday with EADS's helicopter unit Eurocopter to halve its initial order of six Panther helicopters for its navy, the defence ministry announced.

The deal, signed by Defence Minister Anyu Angelov on the sidelines of the Paris Air Show at Le Bourget aerodrome, now foresees the delivery to Bulgaria of just three Panther AS323 helicopters by the end of 2011.

Bulgaria ordered in 2005 a total 18 choppers -- six Panthers, and 12 Cougar AS352s for its air force, which have already been delivered -- as part of a 358 million euro ($515 million) contract with Eurocopter.

Lack of funding however forced the defence ministry last year to seek to cancel the delivery of the last three Panthers and convince the helicopter manufacturer to drop its claim for a 12-million-euro penalty over delayed payments.

"The two sides agreed the penalties for delayed payments will be paid out of the advance payments on the three refused Panther helicopters," the ministry said Tuesday.

The rest of the money from the advance payments will go to the three helicopters that are being delivered as well as spare parts and equipment, it added.

Bulgaria has been struggling for years to modernise its ageing defence equipment.

Despite its severe financial constraints, the ministry recently gave the go-ahead to plans to acquire up to eight new multipurpose fighters for its air force.

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