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VinFast Auto Ltd. has finalized an agreement to sell up to $1 billion in new shares to Yorkville Advisors Global over the course of three years. This strategic move comes as the Vietnamese electric vehicle manufacturer aims to bolster the public offering of its stock listed in the United States.
The agreement allows VinFast the flexibility to call upon the New Jersey-based investment firm, Yorkville Advisors, to purchase its shares at any time during a 36-month window, as disclosed in a recent filing.
VinFast’s Chief Financial Officer, David Mansfield, stated, “While we are not bound to draw the entire amount, this transaction aligns with our objectives of securing capital opportunistically while enhancing the liquidity of our shares over an extended period. In addition to our existing funding commitments, it offers financial flexibility to support our expansion.”
VinFast made its U.S. stock market debut in August following a merger with the blank-check company, Black Spade Acquisition Co. The stock witnessed a remarkable journey, surging by as much as 700% in the days following its debut, only to subsequently hit a record low this week. The company’s market value has declined by over 90% from its peak on August 28, now standing at approximately $13 billion.
The majority of VinFast is owned by its billionaire founder, Pham Nhat Vuong, who controls 99% of the automaker, primarily through Vingroup JSC, his conglomerate. Earlier this month, the company announced that Vuong plans to sell 46 million VinFast shares and intends to employ the proceeds for the company’s expansion.
VinFast is gearing up for an aggressive expansion into Southeast Asian markets, with Indonesia being the first target. The CEO, Le Thi Thu Thuy, recently expressed plans to raise substantial capital to fuel the company’s global expansion efforts. She also noted that for the next 18 months, support will come from Vingroup and Vuong.
Despite reporting a wider loss in the third quarter, VinFast remains on track to break even and achieve profitability, according to Thuy. Vuong previously stated in May that the company could turn profitable post-2025 if operations run smoothly and could break even by the end of 2024.
The company commenced selling electric vehicles in the United States earlier this year and anticipates making its first European deliveries in the fourth quarter. Notably, it recalled 999 of its initial SUVs shipped to the U.S. in May due to software malfunctions. VinFast has reported delivering a total of 28,727 vehicles and is in the process of constructing a $2 billion manufacturing complex in North Carolina, with plans for additional factories in Indonesia and India.
Yorkville Advisors is an investment manager overseeing several private investment funds, with a focus on providing growth and acquisition capital to publicly traded companies. Their active investment sectors encompass healthcare, metals and mining, energy, technology, and electric vehicles, as per their website.
