President Francois Hollande said Wednesday that France will reimburse Russia if it fails to deliver two Mistral warships in a deal frozen over the Ukraine conflict.
"According to the different scenarios you either have payment or reimbursement," Hollande said during a press conference.
He was responding to comments from Russian President Vladimir Putin who last week dismissed France's refusal to deliver the first ship, but said he expects the money to be repaid.
The delivery of the first of two Mistral-class warships has been suspended for six months over Russia's role in the Ukraine conflict, straining ties between Paris and Moscow.
The 1.2 billion euro ($1.5 billion) sale put France in a sticky situation with its allies as fighting raged in eastern Ukraine and Russia was slapped with sanctions.
But Moscow has also warned of hefty fines if France breaches the contract to deliver the Mistrals -- each of which can carry 16 helicopters, four landing crafts, 13 tanks and over 400 soldiers.
However the final outcome of the deal is still up in the air.
Hollande said on Sunday that negotiations with Moscow were still under way to find a "solution to the crisis."