The announcement involves the donation of a 99.8% stake in the battery maker made by Vingroup Chairman and VinFast founder, Pham Nhat Vuong. Under the terms, VinFast will also take ownership of VinES intellectual property, including “manufacturing facilities, partnerships, and supplier contracts” among others mentioned in the press release.
According to a Reuters report, VinFast has reported to U.S. Securities Regulators that VinFast would acquire VinES for “no consideration” aside from assuming company debt of approximately $462 million. Vuong has agreed to interest payments on the existing borrowing until 2027.
The acquisition is expected to help VinFast save 5% to 7% on the automaker’s battery costs. However, Reuters also reports that short-term battery costs for the company are expected to rise in the face of battery R&D and factory operations.
Vuong, Vietnam’s richest man, has offered considerable monetary support to his company since its founding in 2017. In April of this year, he committed $1 billion USD of personal assets to VinFast, and parent organization Vingroup has also contributed non-refundable grants.
Shares of VinFast stock (VFS), which has been hit hard over the past few weeks, were up slightly on the news, opening just above $8 a share before settling back to $7.85.