Possible listing delay for VinFast after $2.5 billion funding pledges

It was reported on 26 April that Vietnamese electric vehicle manufacturer, VinFast, has received further funding pledges to the value of $2.5 billion.

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This might signal another delay to the company’s intended listing in the US.

Two people familiar with the matter had previously told Reuters that VinFast's planned US Initial Public Offering (IPO) may be further delayed, with one saying it could be pushed into next year owing to unfavourable market conditions.

"We remain committed to and focused on our listing process," VinFast said later on Wednesday without elaborating on the time frame of the planned IPO.

VinFast, which began operations in 2019, is gearing up to expand in the US market, where it hopes to build a car and battery plant to compete with legacy automakers and start-ups, although shipments of vehicles from its factory in Vietnam have so far proceeded slowly.

Of the new pledges, $1 billion will be provided as a grant within the next year from founder Pham Nhat Vuong, Vietnam's richest man, the company said in a statement.

Parent company, Vingroup , Vietnam's biggest conglomerate, will provide a grant of $500 million plus a $1 billion loan with a maturity of up to five years.

That would increase total funds raised by VinFast to $10.7 billion, based on earlier company filings.

The grants and loan will "give a push for VinFast to accelerate its development", the company said.

Vingroup has plans to raise money from the possible sale of assets from its shopping mall arm and real estate developer, Reuters exclusively reported in March.

VinFast first flagged a US IPO in April 2021, aiming to raise $2 billion with a valuation of about $60 billion.

The listing was initially planned for the second half of last year, and a number of bankers have since said the IPO was expected this year. However, there was no updated timeline in the company's latest filing to US authorities in March.

The market valuation for EV start-ups has drastically cooled after some companies with sky-high valuations faced scrutiny amid the gloomy global economic outlook.

Although the company has tested one of its SUVs in South Africa as far back as 2020, it remains to be seen if and when it will make its product available on the local market.

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