On October 20, VinFast Auto Ltd. entered into a standby equity subscription agreement of up to $1 billion with the US-based fund Yorkville Advisors to fund its overseas expansion.
Under the agreement, VinFast shall have the right, but not the obligation, to issue to Yorkville for an aggregate subscription amount of up to $1 billion at any time during the commitment period of 36 months, subject to certain conditions.
The subscription agreement will terminate automatically on November 1, 2026 or when Yorkville has subscribed for ordinary shares equal to the Commitment Amount in accordance with the terms of the subscription agreement.
David Mansfield, CFO of VinFast, said, "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. 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 continues to grow."
Mark Angelo, founder and president of Yorkville said, "VinFast is a true leader in electric vehicles (EVs). We are excited about 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."
Following its move to build a $4 billion electric EV factory in the United States, Vietnamese car manufacturer VinFast will spend $400 million to construct factories in Indonesia and India.
The company has optimised its capital expenditure plan for global manufacturing in 2024 and 2025, which is expected to save approximately $400 million over previous estimates.
These savings are to be put towards building completely knocked down factories in Indonesia, the most populous country in Southeast Asia, and India, the third-largest auto market in the world, according to Nikkei Asia.
Last week, VinFast's Green SM unveiled its plans to introduce its electric taxi services in Laos by 2023, with 1,000 VF 5 Plus and VF e34 electric cars making up its fleet. The company will eventually sell and lease VinFast electric cars, similar to its services in Vietnam.
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