French automobile manufacturer Peugeot has agreed to pay compensation for the losses suffered by Iran after the firm’s sudden withdrawal from the Iranian market during the international sanctions, according to Iran’s Minister of Industry, Mining & Trade Mohammad Reza Nematzadeh.

The company has agreed to financial compensation to Tehran under a new agreement signed last month.

“Peugeot’s compensation to Iran has been included in the new contract, but the content of the contract remains confidential,” UK news agency Reuters quoted Nematzadeh as saying in an interview with local private news agency Tasnim.

The carmaker suspended sales in Iran in 2012, after international sanctions against the country’s nuclear programme were extended to the automobile sector.

The sanctions were lifted in January this year and in the same month, Peugeot Citroen and Iran’s largest carmaker, Iran-Khodro Company (IKCO), signed a joint venture agreement to produce vehicles in the Islamic Republic.

Peugeot declined to comment on details of the deal, but its spokesman told Reuters that “the deal signed with Iran is a good and balanced one”.

Under the agreement, up to €400m ($446.37m) will be invested in manufacturing cars in Iran over the next five years.

For Peugeot, the Iranian factory tie-up is critical. When it suspended sales in the country in 2012, it lost nearly 10 per cent of global deliveries and interrupted a relationship dating back more than 50 years, according to Reuters.