Vietnam's VinFast taps banks for $4 billion EV factory funding deal
Vietnam carmaker VinFast said it has tapped Credit Suisse and Citigroup to raise at least $4 billion to build its planned electric vehicle factory in North Carolina and fund its U.S. expansion. Wednesday's announcement marks the most significant development for the company, which is betting big on the U.S. market, where it hopes to compete with legacy automakers and startups with electric SUVs and a battery leasing model.
Vingroup said in a statement that it had appointed Credit Suisse to arrange the issue of offshore securities to raise $2 billion for VinFast or its subsidiaries globally, while Citigroup Global Markets was tapped as an advisor on transactions with the same value. Each agreement "could include debt or private placements of equity," the statement said, without elaborating.
Credit Suisse and Citi declined to comment. The news of the funding arrangement comes after Vinfast's parent Vingroup JSC warned earlier this year that an initial public offering for VinFast might be delayed until next year due to market uncertainty.
Vingroup is Vietnam's largest listed company with a market value of $11.4 billion, with businesses in retail, real estate and resorts. It established VinFast in 2017, with its first conventional combustion-engine cars hitting the streets two years later before switching exclusively to EVs in 2021. VinFast is preparing to launch its first overseas model and roll out a network of showrooms in the United States and Europe.
The North Carolina factory, covering an area of 800 hectares, will initially produce 150,000 electric vehicles a year, the company said. VinFast has promised to create 7,500 jobs at the factory and said it aimed to start production by 2024.
The company said it is due to open its first overseas showrooms in California in coming days, including a flagship store in Santa Monica. For the North Carolina factory, it has also been seeking support from U.S. President Joe Biden's administration for potential financing through a fund for advanced-technology vehicles.
In addition, VinFast has filed for an IPO in the United States through a shell company in Singapore that now legally holds almost all of the startup automaker's assets. Despite its cold start in an increasingly crowded market for EVs, VinFast has won support from suppliers, some analysts and the Biden administration in part because of the perception that it is a rising national champion in Vietnam. In late March, Biden tweeted that VinFast's then just-announced U.S. investment plans were "the latest example of my economic strategy at work."