Poland: Schoenherr advises banks on landmark syndicated defence financing

The financing supports APS's role in the SAN programme, a major Polish defence procurement project carried out by a consortium comprising Polska Grupa Zbrojeniowa S.A. (PGZ) and Kongsberg Defence & Aerospace AS. APS is responsible for the development and delivery of advanced defence systems, including radar technologies, command and control software and UAV detection and neutralisation systems. The proceeds will also be used to expand APS's production capabilities in Gdynia and to support further investments in radar technologies and counter-drone software.

The transaction involved a complex financing structure of PLN 450m, with the possibility of an increase of up to PLN 150m, comprising guarantee facilities, revolving financing and an investment loan facility. KUKE S.A. (Export Credit Insurance Corporation) will additionally provide financial guarantees of nearly PLN 50m, necessary for the execution of the contract. Schoenherr advised on the structuring and negotiation of the full financing documentation for the lender syndicate.

This is one of the most significant defence-sector financing transactions in Poland and required extensive expertise in banking & finance and defence procurement regulations. The transaction underscores the increasingly important role of financial institutions in supporting the development of Poland's private defence sector.

The Schoenherr team was led by Ilona Fedurek (Partner), supported by Piotr Bartoś (Senior Attorney at Law). Pekao Investment Banking acted as financial advisor to APS. White & Case advised the borrower (APS).