VinFast announces a $2.5B infusion from founder, Vingroup

Vietnam’s richest man Pham Nhat Vuong and Vingroup will sink an additional $2.5 billion into the company’s electric-car unit VinFast ahead of its planned U.S. initial public offering.

Vuong, Vingroup’s founder who in 2019 said he would commit $2 billion of his wealth to VinFast, will personally give $1 billion to VinFast within the next year, according to a statement from Vingroup. The company will provide VinFast a loan of up to five years for $1 billion. Vingroup will also give VinFast $500 million.

“The additional $2.5 billion in funding and loans will create more resources to promote and facilitate VinFast to accelerate development so that it can quickly achieve its growth goals on a global scale,” Vingroup said in the statement. 

The infusion of cash comes as the Vietnamese automaker steps up efforts to crack overseas markets. VinFast, which plans to build a factory in North Carolina, shipped its second batch of EVs to North America April 16 and plans U.S. deliveries of the vehicles to begin in May and to Canada in June. It says it will send its first vehicles to Europe in July.

Vuong, whose net worth is around $4.1 billion, is the chairman of Vingroup, a conglomerate whose operations include real estate, leisure parks and a university. As of the end of last year, Vingroup, its affiliates and external lenders had pumped about $8.2 billion into VinFast, according to VinFast’s pre-IPO filing. 

Vuong directly owns 18.12 percent of Vingroup, according to data compiled by Bloomberg. Vietnam Investment Group, or VIG, in which Vuong has about a 92 percent stake, holds 33 percent of Vingroup. 

Vuong does not directly hold any stake in VinFast, but as of Sept. 30, Vingroup owned 51.5 percent of VinFast, VIG held 33.5 percent of the company and Asian Star Trading & Investment Ltd. had a 15 percent stake, according to the filing. Each of these shareholders is majority owned by Vuong.