Vietnam’s Vinfast IPO may be delayed until 2023 due to market uncertainty

© Reuters. FILE PHOTO: The Vinfast booth is seen at the 2022 New York International Auto Show in Manhattan, New York City, U.S., April 14, 2022. REUTERS/David ‘Dee’ Delgado

HANOI (Reuters) – The initial public offering (IPO) of the company’s auto unit VinFast may be delayed until next year due to market uncertainty, the chairman of Vietnam’s Vingroup Group said on Wednesday.

The IPO is currently scheduled for the fourth quarter of this year. Vingroup chairman Pham Nhat Vuong also said at the company’s annual general meeting that the group was prioritizing spending on VinFast and gave an aggressive vehicle sales target.

“We’re looking at an IPO in the fourth quarter, but there’s a lot of ongoing market uncertainty…we may delay it until next year if necessary,” Vuong said.

“The IPO isn’t just about fundraising. It’s also about marketing and claiming VinFast’s global presence,” he said.

VinFast’s Singapore-based holding company has filed for an initial public offering with U.S. securities regulators as it prepares to invest $4 billion in a U.S. factory.

Vuong also told the meeting that the automaker faced obstacles in getting parts from China.

“The chip factories in Shanghai have closed, so the supply of chips has been disrupted, as has been the case in other parts,” said Vuong, referring to supply chain disruptions in China’s commercial hub due to the COVID-19 lockdown.

But Vuong tried to reassure shareholders that the startup would go ahead with an IPO “no matter how uncertain the market is.”

VinFast, which started operations in 2019, made a big bet on the U.S. market, hoping to compete with traditional automakers and startups in the U.S. market with two all-electric SUVs and a battery-lease model to lower purchase prices.

VinFast has pledged to create 7,500 jobs at its planned North Carolina plant, where the battery-powered VF8 and VF9 SUVs will be built. The company said it plans to begin construction of the plant as soon as the permit is granted, aiming to start production by 2024.

The company has previously said it plans to start exporting the two electric vehicles to the U.S. from its existing plant in Vietnam later this year.

VinFast aims to sell 750,000 vehicles in 2026, Vuong said on Wednesday, with 150,000 of which will be built in North Carolina and the rest at the Vietnam plant.

Vingroup is also seeking financing from the U.S. government to support its expansion, including a possible loan from the U.S. government’s $25 billion Advanced Technology Vehicle Manufacturing Loan Program.

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