Vingroup, Vietnam’s largest private conglomerate, and its Chairman, Pham Nhat Vuong, announced a significant financial commitment to support VinFast, the Nasdaq-listed electric vehicle manufacturer. Vingroup plans to lend up to 35 trillion dong ($1.4 billion) by the end of 2026, while Mr. Vuong has personally pledged 50 trillion dong ($2.1 billion) in sponsorship. Additionally, Vingroup will convert all existing loans, valued at about 80 trillion dong ($3.3 billion), into dividend-entitled preferred shares for VinFast Vietnam.
Key Highlights:
- Vingroup to lend up to $1.4 billion to VinFast by 2026.
- Pham Nhat Vuong pledges an additional $2.1 billion in personal sponsorship.
- Conversion of $3.3 billion in loans into preferred shares to ease VinFast’s financial burden.
- VinFast aims to reach profitability and cash flow balance by 2026.
- Expansion continues across Vietnam, North America, Europe, and other new markets.
The funding aims to strengthen VinFast’s financial reserves, ensuring sufficient resources for operations, investments, and other obligations. The company is targeting a break-even point and balanced cash flow by the end of 2026. Despite the backing from Vingroup and Mr. Vuong, VinFast intends to raise capital independently, with the additional support being utilized only if these efforts fall short.
VinFast has concluded its initial investment phase, which involved establishing a 300,000-vehicle-per-year manufacturing facility in Cat Hai, Hai Phong and developing its product lineup. Now, the company is transitioning from a direct-to-consumer sales model to a dealership model, focusing on boosting sales across all markets and optimizing costs.
Vingroup’s support comes after a careful assessment of potential impacts on its own cash flow and profitability. The strategy aims to maintain a balance between backing VinFast and sustaining Vingroup’s financial health. Once VinFast achieves financial independence, Vingroup expects to benefit from its investments through preferred equity.
The conversion of loans into preferred shares aims to alleviate VinFast’s short-term financial pressures, allowing Vingroup to maintain its stake in the company through dividend rights. Preferred shares could later be converted into common shares of VinFast Vietnam Manufacturing and Trading Company or interests in VinFast Singapore.
The additional loan of up to 35 trillion Vietnamese dong will be sourced through Vingroup’s business operations, dividends from subsidiaries, or, if necessary, the strategic divestment of certain investments. Mr. Vuong’s personal pledge of 50 trillion dong will not impact Vingroup or its shareholders, reflecting his commitment to the company’s growth.
In the Vietnamese market, VinFast delivered over 51,000 electric vehicles in the first ten months of the year, becoming the top-selling automotive brand and surpassing even traditional gasoline-powered car manufacturers. Internationally, VinFast is expanding into the U.S., Canada, Europe, and other emerging markets like Indonesia, the Philippines, and India.
Mr. Nguyen Viet Quang, Vice Chairman of Vingroup, emphasized the company’s commitment to sustainable mobility, stating: “Vingroup is unwavering in our commitment to a sustainable future. This green vision guides every aspect of our operations.” He added that VinFast’s recent success in the domestic market propels the company’s ambition to grow globally, solidify market leadership, and accelerate the global transition to electric mobility.
With strong backing from Vingroup and Mr. Vuong, coupled with rising customer demand, VinFast is poised to expand production, optimize costs, and strengthen its market reach. The company currently offers seven electric vehicle models, ranging from mini-SUVs to E-SUVs, catering to various consumer segments and budgets.
About VinFast
VinFast (NASDAQ: VFS), a subsidiary of Vingroup JSC, is a pure-play electric vehicle manufacturer committed to making EVs accessible to everyone. VinFast’s product lineup includes a variety of electric SUVs, e-scooters, and e-buses. The company is focused on expanding its distribution and dealership network globally, with key markets across North America, EMEA, and Asia. Learn more at: https://vinfastauto.us/
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