Vingroup completes mobilization of $525 million int’l bonds

Vingroup, Vietnam's largest listed conglomerate, completed the mobilization of $525 million in international bonds on May 10, Hanoi Stock Exchange reported.

Each bond will have a face value of $1 million and a five-year maturity, with the option to receive shares of VinFast, the group's electric vehicle maker. The bonds were issued under the U.S. Securities Act of 1933.

Vingroup last year endorsed a decision to issue international bonds worth $1.5 billion. The issuance was scheduled to take place in the first quarter of 2022. However, it has been revised to be completed in two phases in 2022.

Following the first release, Vingroup is expected to proceed with the second offering worth $975 million.

Besides paying fees and expenses for the bond issuance, much of the proceeds would be used to fund the automobile manufacturing of VinFast.

Pham Nhat Vuong, Chairman of Vingroup, told the group's shareholder meeting on May 11 that the big shortage of electric vehicles (EVs) is a golden opportunity for VinFast to conquer the global market and build its brand,

"The world is very short of electric cars. Therefore, good products will sell very well," he said.

Over 4,000 units have been ordered for the U.S. market to date, which suits to the company's plan to produce 17,000 this year.

Vuong added that about 600,000 EVs to be sold in the U.S. will be made in Vietnam as the capacity of its factory there is only 150,000 units per year, while the plan is to sell 750,000 to this market by 2026.

VinFast has issued four tranches of domestic bonds totaling VND11,500 billion ($497.3 million) since November 2021, with a 36-month maturity and a 9% annual interest rate.

Bond proceeds will be used to fund VinFast's investment programs and projects, including the procurement of machinery, equipment, copyrights, and services for VinFast's automotive manufacturing project.