Tesla challenger VinFast inks $1 billion share sale pact with New Jersey investment firm for 'financial flexibility'
VinFast Auto Ltd. has agreed to sell as much as $1 billion worth of new shares to Yorkville Advisors Global over three years as the Vietnam electric vehicle maker seeks to boost the public float of its US-listed stock.
Under the pact, VinFast can ask the Mountainside, New Jersey-based investment firm to buy its shares at anytime during a period of 36 months, according to a filing on Friday. When the automaker requests Yorkville to purchase its stock, shares will be issued at 97.5% of the market price for the three trading days commencing the advance notice date.
“While we are under no obligation to draw on the full amount, the transaction aligns with our goals of opportunistic capital raising while adding liquidity to our shares over time,” VinFast Chief Financial Officer David Mansfield said in a statement. “In addition to existing funding commitments, it provides financial flexibility to fund our growth.”
VinFast went public in the US in August by merging with blank-check company Black Spade Acquisition Co. The stock has since been on a roller-coaster ride: the shares surged as much as 700% within days of their debut and then plunged to a record-low this week. Its market value has dropped more than 90% from the Aug. 28 peak to about $13 billion.
VinFast’s billionaire founder Pham Nhat Vuong controls 99% of the automaker, mostly through his conglomerate Vingroup JSC. The company said earlier this month that Vuong plans to sell 46 million VinFast shares and will use the funds for the firm’s expansion.
The EV maker plans to aggressively move into Southeast Asian markets, starting with Indonesia, and expects to eventually raise “a lot of capital” to fuel its global expansion plans, Chief Executive Officer Le Thi Thu Thuy said in an interview with Bloomberg TV earlier this week. The company will rely on support from parent company Vingroup and Vuong in the next 18 months, she added.
Read More: VinFast to Expand Into Southeast Asia, Raise More Capital
VinFast, which reported a wider loss in the third quarter, is on track to break even and reach profitability, Thuy said. Vuong said in May that the EV maker could be profitable after 2025 if operations are “smooth” and break even by the end of 2024.
The company began selling EVs in the US earlier this year and plans its first European deliveries in the fourth quarter. It recalled 999 of its first SUVs shipped to the US in May over malfunctioning software. The company has reported delivering a cumulative total of 28,727 vehicles. It is building a $2 billion manufacturing complex in North Carolina and plans factories in Indonesia and India.
Yorkville Advisors is an investment manager to a number of private investment funds, according to its website. The firm also provides growth and acquisition capital to public companies. It currently actively invests in sectors including health care, metals and mining, energy, technology and electric vehicles
