At Vingroup’s recent annual general meeting of shareholders 2023, its chair – Vietnam’s richest man Pham Nhat Vuong – talked about the future prospects of Vietnam’s top private corporation.
The event took place a few days after Vingroup’s electric car maker VinFast announced that it would list in the US (without an IPO) through a merger transaction.
VinFast, a Vingroup subsidiary that specialises in the design and production of electric vehicles (EVs), and Black Spade Acquisition Co. announced a merger on May 12. Accordingly, the combined company will have a value of about $27 billion. Equity value will be $23 billion after the merger.
The occasion represents a significant step toward VinFast's listing on the US stock market and presents Vingroup and VinFast with new options for international financing.
In addition, VinFast continues to focus on the production of launched EV models for delivery to customers and prepares for the manufacturing of new models, which are the VF 6 and VF 7, while ramping up the progress of setting up a plant in North Carolina.
Previously, in late April, Vingroup announced it would pump another $2.5 billion into VinFast, including a grant of $ 1.5 billion; the rest will come from five-year loans.
Vuong said the Vinfast project kicked off with the goal of making a contribution to the country to build a high-tech, high-class and high-quality brand with international influence.
However, the "green revolution" has opened up great opportunities for VinFast. Vuong said the group has mastered the technology and VinFast is a project with good potential, possibly even the best of the company.
The billionaire said that VinFast's value will not stop at $23 billion.
In 2023, the Board of Directors of Vingroup targets a net revenue of VND190 trillion (US$8.1 billion), a gain of 87 per cent year-on-year. If it is reached, this will be the highest net revenue since the company started operations. The company's profit after tax is forecast to slightly decrease by VND44 billion over the last year to VND2 trillion.
For its fund-raising plan, Vingroup expects to issue a maximum of VND5 trillion in bonds in one or many offerings. They are convertible bonds with a maximum coupon rate of 15 per cent a year.
The term of a bond ranges from 12 months to 60 months. Vingroup will offer private placement or public placement, depending on the actual situation.
Last year, it raised nearly $1.1 billion from international markets, demonstrating the company's reputation globally.
Regarding the plan to use accumulated profit after tax as of the end of 2022, Vingroup proposes to distribute VND5 billion to the reserve fund according to the provisions of the group's charter, and all accumulated profits will be kept for operating activities.