South Korea set up banks to help finance $22b arms sale to Poland

South Korea set up banks to help finance a $22b arms sale to Poland.
This information comes from five individuals familiar with the situation.

The conflict in Ukraine created opportunities for Seoul’s weapons exports.

South Korea is mobilizing local banks to facilitate Poland’s purchase of $22 billion worth of weapons, marking Seoul’s largest arms sale facing restrictions on import-export lending limits. This information comes from five individuals familiar with the situation.

According to an anonymous South Korean government official, “Five local banks are reviewing a syndicated loan as a support measure” to assist Poland in financing its acquisition of South Korean rocket artillery systems and fighter jets.

This move aims to alleviate Poland’s financing obstacles and enable the two countries to seal South Korea’s most significant-ever arms deal, estimated at approximately 30 trillion won ($22.72 billion).

These discussions follow the comprehensive arms agreement inked by both nations last year. Under this agreement, South Korean companies, including Hyundai Rotem Co. and Hanwha Defense Systems Corp, will supply tanks, howitzers, and fighter jets. The initial deal was valued at $13.7 billion, marking South Korea’s largest arms deal to date.

The official from the South Korean government did not provide details regarding the potential size of the syndicated loan. Such loans involve a group of lenders providing funds to a single borrower, typically for financing substantial transactions.

An official from the defense company mentioned that if the proposed sale’s syndicated loan falls short, “there could be other financing measures on the way.”

According to the country’s defense ministry, South Korea’s defense exports reached around $17 billion in 2022, a significant increase from $7.25 billion the previous year.

The conflict in Ukraine created opportunities for Seoul’s weapons exports, establishing South Korea as a noteworthy player in the global arms trade, traditionally dominated by the U.S. and Russia.

Furthermore, South Korea is pursuing stronger security partnerships in Europe, a timely aspiration for Poland, which shares a border with Ukraine and is increasing its arms imports amidst tensions with Russia.

To stay informed about current events, please like our Facebook page https://www.facebook.com/BOLUrduNews/.

Subscribe to our YouTube channel https://bit.ly/3Tv8a3P to watch news from Pakistan and around the world.

South Korea set up banks to help finance $22b arms sale to Poland

Web Desk

Articles