RALEIGH – Vietnam-based VinFast (VFS) has secured access to $1 billion in additional capital on a standby basis as it continues building its multi-billion dollar electric vehicle manufacturing plant in Chatham County and pursues more foreign expansion as well as additional factories.
The so-called subscription agreement is with equity firm Yorkville. The deal was announced Friday.
VinFast has said it would raise additional capital through stock sales. That news sent the company’s shares to a new low as concerns grew about whether it could generate the capital needed for its strategy.
“This new source of equity funding provides us with valuable optionality and access to capital to continue to expand our business on a global scale,” said David Mansfield, CFO of VinFast,. “While we are under no obligation to draw on the full amount, the transaction aligns with our goals of opportunistic capital raising while adding liquidity to our shares over time. In addition to existing funding commitments, it provides financial flexibility to fund our growth. We will continue to evaluate other capital markets transactions and sources of fundraising as VinFast.”
VinFast already has commitments from company founder Pham Nhat Vuong, Vingroup for $2.5 billion dollars, the company reiterated in the announcement.
Its shares fell 6% after the announcement, trading at $5.33 in early afternoon trading. Shares traded as high as $93 after VinFast’s stock offering hit Wall Street in August but has plunged since then.
Under the agreement, VinFast explained:
- “VinFast has the option, but not the obligation, to require Yorkville to subscribe for up to $1.0 billion of ordinary shares in VinFast at any time during the term of the Subscription Agreement, subject to certain conditions and limitations
- “The Subscription Agreement has a term of 36 months”
In the announcement, Mark Angelo, Founder and President of Yorkville, noted: “VinFast is a true leader in EVs. We are excited for this opportunity to be a part of VinFast’s growth and development, and we look forward to seeing VinFast’s continued success in the EV market. We couldn’t be prouder of our partnership with VinFast in its mission for a greener future.”
Fore more about Friday’s agreement, read the SEC filing at: