South Korea lines up loans for Poland to help finance arms sale
A 2022 arms deal with Poland established Seoul as a major player in global weapons exports, largely dominated by the US and Russia
03 November 2023 - 11:14
by Cynthia Kim and Seunggyu Lim
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After hitting statutory limits on import-export lending, South Korea is gathering local banks to help Poland buy $22bn worth of weapons in Seoul’s largest arms sale, five people familiar with the matter said.
“Five local banks are reviewing a syndicated loan as a support measure” to help Poland finance its purchase of South Korean rocket artillery systems and fighter jets, a South Korean government official said, speaking on condition of anonymity to discuss ongoing planning.
Two officials from a Korean defence company confirmed the syndicated loan plan. Two officials at South Korean banks said there would be loans, but did not specify the type.
It is the first indication that Seoul is working to remove Poland's financing hurdles to enable the two countries to strike South Korea's biggest-ever weapons arms deal, estimated at about 30-trillion won ($22.72bn).
The discussions are a follow-up to the comprehensive arms agreement between the two nations signed last year, under which South Korean companies including Hyundai Rotem and Hanwha Defense Systems will supply tanks, howitzers and fighter jets.
That deal was worth $13.7bn, South Korea’s largest to date.
The South Korean government official did not elaborate on the size of the potential syndicated loan. Such a loan is provided by a group of lenders to a single borrower, often to finance large deals.
The defence company official said that if the syndicated loan for the next proposed sale wasn't enough, “there could be other financing measures on the way”.
South Korea’s defence exports totalled about $17bn in 2022, according to its defence ministry, up from $7.25bn a year before, as the war in Ukraine opened a door for Seoul's weapons exports.
The 2022 arms deal with Poland established Seoul as a major player in global weapons exports, largely dominated by the US and Russia.
Seoul is also seeking deeper security ties in Europe, an ambition with ideal timing for Poland, which borders Ukraine, as it ramps up arms imports amid tensions with Russia.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
South Korea lines up loans for Poland to help finance arms sale
A 2022 arms deal with Poland established Seoul as a major player in global weapons exports, largely dominated by the US and Russia
After hitting statutory limits on import-export lending, South Korea is gathering local banks to help Poland buy $22bn worth of weapons in Seoul’s largest arms sale, five people familiar with the matter said.
“Five local banks are reviewing a syndicated loan as a support measure” to help Poland finance its purchase of South Korean rocket artillery systems and fighter jets, a South Korean government official said, speaking on condition of anonymity to discuss ongoing planning.
Two officials from a Korean defence company confirmed the syndicated loan plan. Two officials at South Korean banks said there would be loans, but did not specify the type.
It is the first indication that Seoul is working to remove Poland's financing hurdles to enable the two countries to strike South Korea's biggest-ever weapons arms deal, estimated at about 30-trillion won ($22.72bn).
The discussions are a follow-up to the comprehensive arms agreement between the two nations signed last year, under which South Korean companies including Hyundai Rotem and Hanwha Defense Systems will supply tanks, howitzers and fighter jets.
That deal was worth $13.7bn, South Korea’s largest to date.
The South Korean government official did not elaborate on the size of the potential syndicated loan. Such a loan is provided by a group of lenders to a single borrower, often to finance large deals.
The defence company official said that if the syndicated loan for the next proposed sale wasn't enough, “there could be other financing measures on the way”.
South Korea’s defence exports totalled about $17bn in 2022, according to its defence ministry, up from $7.25bn a year before, as the war in Ukraine opened a door for Seoul's weapons exports.
The 2022 arms deal with Poland established Seoul as a major player in global weapons exports, largely dominated by the US and Russia.
Seoul is also seeking deeper security ties in Europe, an ambition with ideal timing for Poland, which borders Ukraine, as it ramps up arms imports amid tensions with Russia.
Reuters
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