VinFast expects to raise $2 billion through an IPO in the US, valuing the company at $60 billion
The Financial Times of the US commented that VinFast is hardly a familiar name in the US. But that hasn’t stopped the Vietnamese automaker from speeding up its initial public offering in the US.
As previously reported, startup VinFast, a unit of Vingroup, the largest private group in Vietnam, has secretly filed an IPO file with the US Securities and Exchange Commission (SEC). The move comes just days after VinFast announced plans to build an electric vehicle and battery factory in North Carolina.
The $2 billion plant, slated to be operational by mid-2024, was commended by President Joe Biden. Interest in electric cars is growing amid soaring gas prices. Electric vehicle startups like Rivian and Lucid Motors raised a lot of money from investors last year despite barely generating revenue. Even so, the $2 billion VinFast is said to hope to raise during the IPO will likely face challenges.
Founded in 2017, VinFast started producing conventional cars for Vietnamese consumers using engines licensed by BMW. The company only started moving into electric vehicles last year. As a nascent brand with few names outside of Vietnam, the FT believes it will face an uphill battle to sell electric cars to Americans.
Not to mention, the electric vehicle market is busier than ever. Tesla already dominates the electric vehicle market in the US. Traditional American automakers like General Motors and Ford, with their production facilities set up in place, are both investing heavily in electric vehicles. The size of these companies has helped them better deal with supply chain problems and the rise in the price of nickel, a key raw material used to make lithium batteries.
Additionally, after one of the most explosive years on record, the US IPO market has faltered. According to Renaissance Capital, just $2 billion was raised through 18 deals in the first quarter. That’s pretty small compared to the $39 billion raised in the same period in 2021. Investor optimism may also have waned after the share prices of some of last year’s biggest IPOs linked regarding electric vehicles has dropped recently.
Of course, VinFast still hopes to capture some of the craze in the field of electric vehicles created by Tesla. However, the FT said that VinFast’s journey will not be easy.
It is known that Vingroup transferred 51.52% of VinFast Vietnam’s capital to VinFast Singapore in early December 2021. After completing the restructuring process, Vingroup and the existing shareholders of VinFast Vietnam directly own 100% of shares of VinFast Singapore, thereby indirectly owning 99.9% of VinFast Vietnam. Vingroup still maintains the current 51.52% interest rate in VinFast Vietnam.
This restructuring is part of the preparation for VinFast IPO in the US, an important foundation in the Company’s strategy to become a global brand.
Vingroup Vice Chairman Le Thi Thu Thuy once said that when IPO in the US, VinFast will only sell 5-10% of shares, which means foreign investors will only hold a maximum of 10% of the company’s charter capital. The IPO in the US has no other goal than raising capital, attracting technology and technical investment to develop VinFast in accordance with the vision and orientation that the company has set.
Some information said that VinFast may be valued at 60 billion USD.
Source: Financial Times
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