Hyundai Rotem makes early delivery of K2 tanks to Poland. (Image provided by Hyundai Rotem)
SEOUL, Nov. 10 (Korea Bizwire) – Five major commercial banks have been considering issuing a syndicated loan to help finance South Korean companies’ arms export to Poland, an industry source said Friday.
Last year, South Korean companies secured major deals worth 17 trillion won (US$12.9 billion) to supply K2 tanks, K9 self-propelled howitzers, FA-50 light attack aircraft and Chunmoo multiple rocket launchers to Poland.
Their bids to sign additional contracts worth 30 trillion won with Poland this year have faced obstacles as the state-run Export-Import Bank of Korea (Eximbank) is unable to provide loans and guarantees for the proposed sales after hitting its upper limit from last year’s mega deals.
In a bid to address the lending limit by the state-run bank, five commercial banks — KB Kookmin, Shinhan, Hana, Woori and Nonghyup — have been in talks with the government for financial measures, according to the source.
Under the syndicated loan plan, the five banks are likely to provide about $2.7 billion in an initial stage of support, the source said on the condition of anonymity.
Still, the banks have been in negotiations with the government for South Korea and Poland to seal the arms export deal, according to the source.
A syndicate loan refers to a form of financing offered by a group of lenders when a project requires large loans for a single lender.
The latest move comes as South Korea is seeking to capitalize on its robust weapons exports to Poland with the goal of becoming the world’s No. 4 arms exporter by 2027, up from eighth place in 2021.
(Yonhap)
