PGZ Considers Retail Bond Issuance and Foreign Acquisitions as Profits Surge

Poland’s state-owned defence holding Poland’s PGZ may issue multi-billion-złoty retail and institutional bonds in 2026 and pursue foreign defence acquisitions, as revenues are set to exceed 20 billion złoty and profits reach 2.5 billion złoty. Polska Grupa Zbrojeniowa (PGZ) is preparing for a major expansion of its financing and investment strategy, including the potential issuance of retail and institutional bonds worth several billion złoty and the acquisition of defence companies outside Poland.

In an interview with PAP Biznes, PGZ Vice President Marcin Idzik said the group is evaluating a domestic bond issue in 2026 as part of a broader effort to strengthen internal financing and involve Polish citizens directly in the country’s defence buildup.

“We are considering corporate and retail bonds as one element of internal financing. The idea is to create a fund similar to the one we had before the war, allowing citizens to participate in the expansion of defence capabilities by investing in PGZ bonds,” Idzik said.

Multi-Billion Złoty Bond Plans

According to PGZ management, the bond issuance—expected to be listed on Poland’s Catalyst market—could reach several billion złoty. The bonds would be aimed at both financial institutions and individual investors.

PGZ already has significant access to bank financing. The group has secured a 12 billion złoty credit line from PKO BP and is finalising a similar agreement with Bank Pekao. Additional talks have been held with Alior Bank, while strategic guarantee arrangements are in place with state development bank BGK, which currently backs up to 7 billion złoty in government contracts.

Idzik noted that while PGZ remains open to cooperation with foreign financial institutions, capital origin and security considerations remain critical due to the sensitivity of the defence sector.

Strong Financial Outlook

PGZ expects 2025 to be a record year. Group revenues are forecast to exceed 20 billion złoty, with net profit projected at approximately 2.5 billion złoty—up from 1.8 billion złoty the previous year. Current investment projects across the group exceed 8 billion złoty, spanning ammunition, air defence, and industrial capacity expansion.

The holding structure allows PGZ to act as an internal financial engine for its subsidiaries, providing investment capital where commercial banks would otherwise require signed contracts.

European Funds and NATO-Oriented Growth

PGZ also plans to leverage European defence instruments such as the EU SAFE and EDIP programs. SAFE alone represents more than €40 billion in potential financing, with PGZ aiming to position itself as a key industrial contributor not only for Poland’s armed forces but also for export markets within NATO.

The group has been a major beneficiary of Poland’s Wisła and Narew air-defence programs, which combined foreign technology acquisition with mandatory local industrial participation. These projects, PGZ argues, have demonstrated the ability of Polish industry to execute complex defence programs at scale.

“Poland First” Industrial Strategy

Under Poland’s defence modernisation plan, at least 50% of procurement spending is to remain within the country. PGZ sees this as both an obligation and an opportunity.

“We observe the ‘America First’ approach in the United States. Our objective is ‘Poland First’—investing domestically before securing allied needs,” Idzik said.

To meet these requirements, PGZ is investing heavily in domestic production capacity, including ammunition, armoured vehicle maintenance, and air-defence components. Notably, the group is developing capabilities to maintain AGT-1500 engines for Abrams tanks and aims to establish the largest Abrams maintenance centre in Central Europe in cooperation with General Dynamics.

International Acquisitions on the Table

While Poland remains PGZ’s primary focus, the group is actively analysing acquisition targets abroad. According to Idzik, PGZ lacks sufficient high-tech companies with advanced know-how in areas such as unmanned systems, space, cyber security, and sensor technologies.

“We do not exclude acquisitions outside Poland. International takeovers would allow us to access technology, talent, and intellectual property that are critical for future warfare,” he said.

PGZ’s investment roadmap includes unmanned aerial and ground systems, maritime security platforms for the Baltic Sea, satellite reconnaissance, drone-based imaging, and acoustic monitoring systems.

Ammunition, Abrams, and Strategic Autonomy

PGZ is also making long-term investments ahead of confirmed sales contracts, particularly in 155 mm ammunition production—moves that Idzik acknowledged would be unlikely in a purely private-sector model.

“These are strategic capabilities. PGZ invests because the absence of these capacities could be critical for Poland’s security,” he said.

The group aims to become Europe’s only fully self-sufficient producer of 155 mm and 120 mm ammunition, while positioning Poland as a regional hub for Abrams tank maintenance and support.

Cross-Sector Cooperation and Ukraine Focus

PGZ is deepening cooperation with other state-owned industrial groups, including Grupa Azoty, KGHM, Polska Grupa Górnicza, and Rafako, integrating chemical, mining, and heavy-industry capabilities into the defence supply chain.

At the same time, PGZ is actively courting Ukrainian defence companies to relocate production and R&D activities to Poland, offering NATO-standardisation, industrial predictability, and market access.

Streamlining the Group

Internally, PGZ is undergoing restructuring, cost optimisation, and consolidation of engineering resources. The group’s advanced design centre in Stalowa Wola is expected to serve the entire holding rather than individual subsidiaries.

Founded in 2013, PGZ is one of Europe’s largest defence groups, encompassing 67 subsidiaries and stakes in 27 additional companies across defence, shipbuilding, and advanced technologies. The group employs over 22,000 people. The Polish State Treasury holds a 70.82% stake, with the remainder owned by Polish defence and development institutions.