Vietnamese electric vehicle (EV) manufacturer VinFast is set to make its debut on the U.S. stock market next month, utilizing a special purpose acquisition company (SPAC) merger after receiving approval from the Securities and Exchange Commission (SEC). The move comes as VinFast aims to enhance its presence in the U.S. market and intensify competition with established automakers and emerging startups.
VinFast, which commenced operations in 2019, has been eyeing expansion opportunities in the United States. Apart from the planned listing, the company is also planning to construct a car plant in North Carolina, further bolstering its prospects in the American EV market.
Initially, VinFast had filed for an initial public offering (IPO) on the Nasdaq in December of the preceding year. However, in May, the company changed course and decided to pursue a merger with Black Spade Acquisition Co (BSAQ.A), a SPAC. The companies aim to finalize the merger by August, subject to obtaining shareholder approvals and meeting customary closing conditions.
Dennis Tam, Chairman, and Co-CEO of Black Spade Acquisition Co, emphasized that the SEC’s declaration of effectiveness represents a crucial milestone towards the successful completion of the business combination between Black Spade and VinFast.
An extraordinary shareholder meeting to approve the proposed business combination with VinFast is scheduled for August 10, according to a joint statement released by both companies.
Joining the ranks of other EV companies like Faraday Future, Nikola Corp, and Lucid, VinFast’s decision to opt for a SPAC listing offers a swift route to entering the stock market, particularly for firms in the automotive technology sector. However, the SPAC market has experienced a cooling trend and closer scrutiny from the SEC in recent times.
The estimated potential equity value of the merged entity, as projected by VinFast and Black Spade, stands at $23 billion, according to their statement. Nonetheless, analysts have expressed skepticism, citing concerns about VinFast’s ongoing cash burn and early-stage growth in the U.S. market, suggesting that the price tag may not be realistic.
Despite these uncertainties, VinFast has already shipped around 3,000 EVs to the U.S., with deliveries commencing in March. Additionally, the company initiated construction of its $4 billion U.S. plant on Friday, signaling its commitment to expanding its operations in the region.
The statements released by VinFast have not disclosed any institutional investors involved in a private investment in public equity transaction alongside the SPAC deal. While SPACs have proven popular among investors seeking high-tech stock valuations, merged companies have occasionally experienced declines in valuation in the months following their market debut.
