Vietnam’s Vinfast IPO may be delayed until 2023 due to market uncertainty

HANOI, May 11 (Reuters) – The chairman of Vietnamese conglomerate Vingroup said on Wednesday that an initial public offering (IPO) of the company’s auto unit VinFast could be delayed until next year due to market uncertainty.

The initial public offering is currently scheduled for the fourth quarter of this year. Vingroup chairman Pham Nhat Vuong also told the company’s annual general meeting that the conglomerate was prioritizing spending on VinFast and gave an aggressive car sales target.

“We are considering a Q4 IPO, but there are a lot of uncertainties in the market right now… If necessary, we can delay it until next year,” Vuong said.

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“The IPO is not just about raising funds. It is also about marketing and reclaiming VinFast’s position globally,” he said.

VinFast’s Singapore-based holding company had filed an initial public offering with US securities regulators as the company prepares a $4 billion investment to build a factory in the United States.

Vuong also told the meeting that the automaker faced obstacles in sourcing parts from China.

“Chip factories in Shanghai are closed, so chip supplies have been disrupted and the same story for other parts,” Vuong said, referring to supply chain disruptions caused by COVID-19 lockdowns. in the commercial center of China.

But Vuong tried to assure shareholders that the startup would go ahead with the initial public offering “no matter how uncertain the market is.”

VinFast, which started operations in 2019, is betting big on the US market, where it hopes to compete with legacy automakers and startups with two fully electric SUVs and a battery-leasing model that will lower the purchase price.

VinFast has promised to create 7,500 jobs at its planned plant in North Carolina, where it will build the VF8 and VF9 battery-powered SUVs. The company has said it plans to begin construction of the plant as soon as permits are granted with a goal of starting production by 2024. read more

It previously said it plans to start exporting the two electric vehicles to the United States later this year from its existing plant in Vietnam.

Vuong said on Wednesday that VinFast aimed to sell 750,000 cars by 2026, with 150,000 cars to be produced in North Carolina and the rest at its factory in Vietnam.

Vingroup is also considering obtaining financing from the US government to support its expansion, including the possibility of taking advantage of loans from the US government’s $25 billion Advanced Technology Vehicle Manufacturing Loan Program.

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Reporting by Phoung Nguyen Written by Ed Davies Edited by Kanupriya Kapoor

Our standards: the Thomson Reuters Trust Principles.

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