VinFast, the Vietnamese electric vehicle (EV) manufacturer, announced on Friday that it has entered into a share subscription agreement with U.S.-based investment fund Yorkville Advisors. The deal provides VinFast with the option to require Yorkville to subscribe for up to $1 billion worth of ordinary shares, according to a filing with the U.S. securities authority.
David Mansfield, VinFast's Chief Financial Executive, stated, “This new source of equity funding provides us with valuable optionality and access to capital to continue to expand our business globally. 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.”
Founded and primarily owned by Vietnam's richest man, Pham Nhat Vuong, VinFast had an impressive Nasdaq debut in mid-August following a merger with a blank-check company. Though the company initially garnered a valuation higher than legacy U.S. automaker Ford, its share price has dropped by over 84% since the listing, trading at $5.69 as of Wednesday.
The automaker has so far sold around 22,000 cars and is targeting annual sales of 40,000 to 50,000 units. Notably, more than half of these sales went to a Vietnam-based fleet operator controlled by Vuong.
Mark Angelo, Founder and President of Yorkville Advisors, said, “We look forward to seeing VinFast's continued success.” It's worth noting that Yorkville previously invested up to $400 million in shares of EV maker Lordstown.
VinFast enters the EV market at a time of intense competition and pricing pressures, led by market leader Tesla and various Chinese companies. Earlier this year, the company announced it would receive $2.5 billion in new funding pledges, with $1 billion coming directly from its founder Vuong.