Vietnamese automaker VinFast’s Singapore-based holding company has filed for an initial public offering (IPO) with US securities regulators to fund planned spending of $4 billion on its first North American factory complex.
The company’s chairman said Vietnam’s first domestic carmaker could also seek financing from the US government to support its expansion with the plant in the state of North Carolina.
“It is also one of our financing options, but we need to prove to them that we are qualified,” Vingroup Chairman Pham Nhat Vuong told a group including reporters.
He said VinFast was committed to an IPO that would help establish the electric vehicle maker as a global brand, but added, “if the conditions are not right we can wait.”
VinFast is betting big on the US market, where it hopes to compete with legacy automakers and startups with its electric SUVs and a battery leasing model.
A source familiar with the matter said VinFast would probably look to raise about $2 billion from the offering.
“VinFast is moving ahead with its plans but the timing of the IPO is very much open,” said the source, who spoke on condition of anonymity. “There needs to be a window to get the IPO done and it could easily take a couple of months.”
A unit of Vietnam’s biggest conglomerate Vingroup JSC, Vinfast said it had not determined the IPO size and price range.
“There are options to look at. We are still considering a lot of options,” Chief Executive Le Thi Thu Thuy told reporters at an event to showcase the company’s new VF8 battery-powered SUV.
She said the IPO was planned for the second half of this year as one option to fund a plant planned in North Carolina and US expansion.
Last week the company said it signed a preliminary deal to initially invest $2 billion to build the North Carolina factory to make electric buses, sport utility vehicles and batteries for electric vehicles.
The company, established in 2017, plans to transition to all-electric vehicle production from late 2022.
VinFast Eyes Germany Plant
A year ago sources said Vinfast was considering an IPO that could value the company at about $60 billion.
That valuation looks stretched in current markets, the person familiar with the matter told Reuters on Thursday.
“Even the companies that have gone ahead with US IPOs have had a sharp correction in valuations, so that’s a given,” he added.
Outside North America, VinFast is looking for a plant in Germany, it said in January.
VinFast said prices for its VF8 SUV started from $41,000 in the United States, versus about $63,000 for a Tesla SUV. It’s targeting global electric vehicle sales of 42,000 this year.
- Reuters with additional editing by Sean O’Meara