The chairman of Vietnam's Vingroup conglomerate stated on Wednesday that an initial public offering (IPO) for the company's vehicle subsidiary, VinFast, may be delayed until next year due to market uncertainty.
This news comes as a surprise, as The IPO is scheduled for the fourth quarter of this year and the chairman of the VinFast conglomerate also stated at the company's annual general meeting that the conglomerate prioritized investing in VinFast and set an aggressive automobile sales objective".
" We are eyeing a Q4 IPO, but there are many ongoing market uncertainties now… If necessary we may delay it to next year," explained Mr. Vuong.
Reason for delayed
“The IPO is not just for fundraising. It’s also about marketing and claiming VinFast’sposition globally,” he said.
VinFast's Singapore-based holding company had filed for an IPO with US securities authorities, as the business prepares to invest $4 billion in a factory in the US.
Vuong also stated during the conference that the carmaker was having difficulty acquiring parts from China.
“Chip factories in Shanghai are closed – therefore chip supplies have been disrupted and the same story for other parts,” Mr. Vuong said, referring to supply chain disruptions caused by COVID-19 lockdowns in China’s business hub. Mr. Vuong, on the other hand, attempted to reassure stockholders that the IPO would go through “no matter how uncertain the market.”
In conclusion
VinFast, a new brand that started operations in 2019, is making a big bet on the U.S. market as it hopes to compete with traditional automakers and startups with two all-electric SUVs and a battery-lease model that reduces purchase prices. VinFast plans to create 7,500 jobs in North Carolina when it constructs a battery-powered SUV plant there. The company expects to begin production by 2024. The company has announced that it plans to start exporting two electric cars from its existing plant in Vietnam later this year.
On Wednesday, Mr. Vuong said that VinFast plans to sell 750,000 vehicles by 2026, with 150,000 of them being manufactured in North Carolina and the remainder being manufactured in Vietnam.
Vingroup is also considering government funding to fund its expansion, including borrowings from the US government's $25 billion Advanced Technology Vehicles Manufacturing loan program.
