VinFast, in search of more capital, secures stock deal worth up to $1 billion
VinFast, the Vietnamese electric carmaker building a factory in Chatham County, ended a rough week on the stock market with some good news.
On Friday, the company announced a $1 billion agreement with the New Jersey-based investment firm Yorkville Advisors Global that will give VinFast another avenue for much-needed cash. Under the agreement, VinFast will be able to draw up to $1 billion from Yorkville in exchange for company stock at any point in the next three years.
“In addition to existing funding commitments, it provides financial flexibility to fund our growth,” VinFast Chief Financial Officer David Mansfield said in a statement.
In the deal, Yorkville would receive VinFast stock at a 2.5% discount. On its website, Yorkville says it specializes in providing capital to “micro-cap and small-cap companies.”
While VinFast heralded the agreement, the stock market remained sour on the company Friday morning — pushing VinFast shares down another 5% to around $5.36. This marks a near-low for the rollercoaster stock, which briefly hit $93 a share in August.
VinFast is considered to have a low-float stock because it has made relatively few of its total shares available for trading. As the company frees up more shares, it will raise capital but also put downward pressure on its share price due to supply and demand.
Executives have previously acknowledged they need to raise more capital to fund VinFast’s global goals. These plans include a $2 billion initial phase of a vehicle manufacturing plant near the small town of Moncure, about 30 miles southwest of Raleigh, which the company hopes to open in 2025.
In an interview earlier this week with Bloomberg, VinFast CEO Le Thi Thu Thuy said the automaker would look to raise “a lot of capital” to fund its expansion into Asia. The company has lost more than $5 billion in the past three years as it works to build up its fleet of fully-electric SUVs for up to 50 international markets.
VinFast’s parent company and its chairman have pledged additional financial support, which Thuy said would sustain the automaker for the next 18 months.
Public records obtained by The News & Observer show VinFast this year sought a $1.4 billion loan from the U.S. Department of Energy, through a program designed to bolster U.S. production of fuel-efficient vehicles.
Its loan application has not yet been approved, and the company has not shared whether its application is still active. Citing policy, the Department of Energy does not comment on application statuses.
This story was originally published October 20, 2023 at 1:56 PM.
