French President Francois Hollande has acknowledged for the first time that France will have to give Russia a refund if the country doesn't sell the Mistral-class warship whose delivery has been suspended last year because of the conflict in Ukraine.

At a press conference Wednesday with Ukrainian counterpart Petro Poroshenko, Hollande said: "If you don't deliver, you must refund. So far, the delivery of the Mistral is not possible."

The Mistral-class helicopter carrier was part of a giant 1.2 billion euros deal ($1.28 billion) that was supposed to be the biggest arms sale ever by a NATO country to Russia.

Last week Russian President Vladimir Putin warned France that Russia expects its advance payments to be refunded if the ship isn't delivered.