Vietnamese electric car maker VinFast files for US IPO

VinFast, a Vietnamese automaker that competes with Tesla Inc, has filed for an initial public offering in the US at the same time it is preparing to deliver its first SUVs to California customers later this month.

The Vingroup JSC unit is being advised by banks including JPMorgan Chase & Co., Citigroup Inc., Credit Suisse Group AG, and Morgan Stanley, according to an F-1 filing with the US Securities and Exchange Commission. The shares will be VFS-marked on the Nasdaq Global Select Market. There are no other details on the size of the fundraiser or a possible listing date yet.

Vingroup shares climbed 5.7% to a 5-month high. The underlying VN index rose 1.1%.

VinFast has been planning an IPO for almost two years now. The first news that Vingroup is considering an IPO was in early 2021. In the spring, the company confidentially submitted an application for the sale of shares. VinFast estimates that it could raise at least $1 billion from the offering.

VinFast lost $1.3 billion in 2021 and posted a loss of about $1.5 billion. As of September, its owners and lenders have invested about $7.5 billion to fund operating and capital costs.

VinFast plans to produce and sell about 1 million electric vehicles within five to six years, but so far the company has sold only a small amount. The company also wants to expand its global production capacity to 1.1 million vehicles per year by 2026.

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Additional capital for VinFast may be raised through debt and equity financing, which may include funding from related parties. VinFast, however, may continue to incur losses due to the expansion of production and service outside of Vietnam.

The IPO could be the largest ever for a Vietnamese company after the $1.4 billion domestic sale of Vinhomes JSC shares in 2018. Even after a strong 24% gain since mid-November, the benchmark VN index is still 30% lower this year.

VinFast reported 8779.7 billion VND ($365.3 million) in car sales for the nine months of the year that ended September 30, according to a statement. During the same period, the company had 1854.6 billion VND in cash and cash equivalents.

The IPO filing was filed after loading 999 electric vehicles onto a VinFast-branded vessel bound for Los Angeles.

VinFast understands that its success will depend on commercial acceptance in competitive markets such as the US and Europe.

The company’s efforts to become a global brand including starting construction on a plant in North Carolina, where it plans to begin production in July 2024. In July, the company signed agreements with banks to raise at least $4 billion for its US expansion.