Vietnam’s VinFast borrows $4 billion to set up US electric vehicle factory
Vietnamese carmaker VinFast said it has tapped Credit Suisse and Citigroup to raise at least $4 billion for the construction of its planned electric vehicle factory and an attached battery facility in North Carolina and fund its US expansion, Reuters reported.
The announcement on July 13 marks the most significant international development for the company which is foraying into the US market where it hopes to compete with other electric vehicle makers – such as Tesla and the large legacy car firms – with its mostly cheaper electric sport utility vehicles (SUV) and a battery leasing model.
Parent company Vingroup said in a statement that it has appointed Credit Suisse to arrange the issue of offshore securities to raise $2 billion for VinFast and its subsidiaries globally, while Citigroup Global Markets was commissioned as an advisor on transactions with the same value.
Vingroup noted that both agreements “could include debt or private placements of equity,” without giving further details.
Capacity of 150.000 electric vehicles per year
Based on VinFast’s current plans, its US factory will be located at Triangle Innovation Point industrial park in Chatham County, North Carolina with a total land area of about 800 hectares which includes three main zones: one for the manufacturing and assembling of electric cars and electric buses, another for electric vehicle battery production and another for VinFast’s suppliers.
The assembly plant itself will cost about $2 billion, company officials announced earlier this year, though additional operations, including the battery facility, should bring the total cost to $6.5 billion. No announcement has been made yet where the remaining $2.5 billion will be coming from.
Phase one of the plant is expected to have a capacity of 150,000 vehicles per year, producing the VinFast VF9, a seven-seater full-size SUV vehicle, and the VF8, a five-seater mid-size SUV. As many as 13,000 jobs would be created.
CEO “excited”
“The commitment from international leading financial institutions to work with VinFast not only demonstrates our solid reputation, but also shows the banks’ trust in VinFast’s excitement,” said Vingroup vice chairwoman and global CEO of VinFast, Le Thi Thu Thuy.
VinFast will wind down its young loss-making combustion-engine car business this year, shifting entirely to electric vehicles, namely sport utility vehicles, buses and electric motorbikes.
The carmaker registered for an initial public offering in the US in in April this year which, if successful, would be the first major listing in the US for a Vietnamese company. However, the listing, which was initially planned for this year, is likely being postponed to next year due to volatile market conditions, VinFast said in May.
Vietnamese carmaker VinFast said it has tapped Credit Suisse and Citigroup to raise at least $4 billion for the construction of its planned electric vehicle factory and an attached battery facility in North Carolina and fund its US expansion, Reuters reported. The announcement on July 13 marks the most significant international development for the company which is foraying into the US market where it hopes to compete with other electric vehicle makers - such as Tesla and the large legacy car firms - with its mostly cheaper electric sport utility vehicles (SUV) and a battery leasing model. Parent company Vingroup...
Vietnamese carmaker VinFast said it has tapped Credit Suisse and Citigroup to raise at least $4 billion for the construction of its planned electric vehicle factory and an attached battery facility in North Carolina and fund its US expansion, Reuters reported.
The announcement on July 13 marks the most significant international development for the company which is foraying into the US market where it hopes to compete with other electric vehicle makers – such as Tesla and the large legacy car firms – with its mostly cheaper electric sport utility vehicles (SUV) and a battery leasing model.
Parent company Vingroup said in a statement that it has appointed Credit Suisse to arrange the issue of offshore securities to raise $2 billion for VinFast and its subsidiaries globally, while Citigroup Global Markets was commissioned as an advisor on transactions with the same value.
Vingroup noted that both agreements “could include debt or private placements of equity,” without giving further details.
Capacity of 150.000 electric vehicles per year
Based on VinFast’s current plans, its US factory will be located at Triangle Innovation Point industrial park in Chatham County, North Carolina with a total land area of about 800 hectares which includes three main zones: one for the manufacturing and assembling of electric cars and electric buses, another for electric vehicle battery production and another for VinFast’s suppliers.
The assembly plant itself will cost about $2 billion, company officials announced earlier this year, though additional operations, including the battery facility, should bring the total cost to $6.5 billion. No announcement has been made yet where the remaining $2.5 billion will be coming from.
Phase one of the plant is expected to have a capacity of 150,000 vehicles per year, producing the VinFast VF9, a seven-seater full-size SUV vehicle, and the VF8, a five-seater mid-size SUV. As many as 13,000 jobs would be created.
CEO “excited”
“The commitment from international leading financial institutions to work with VinFast not only demonstrates our solid reputation, but also shows the banks’ trust in VinFast’s excitement,” said Vingroup vice chairwoman and global CEO of VinFast, Le Thi Thu Thuy.
VinFast will wind down its young loss-making combustion-engine car business this year, shifting entirely to electric vehicles, namely sport utility vehicles, buses and electric motorbikes.
The carmaker registered for an initial public offering in the US in in April this year which, if successful, would be the first major listing in the US for a Vietnamese company. However, the listing, which was initially planned for this year, is likely being postponed to next year due to volatile market conditions, VinFast said in May.
