A VinFast Auto Ltd. electric vehicle VF 5 model to be inspected in the assembly shop at the company’s manufacturing plant in Haiphong, Vietnam on Monday, June 10, 2024. Photographer: Linh Pham/Bloomberg
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VinFast Auto is spinning off its research and development assets and then selling it to founder Pham Nhat Vuong for $1.5 billion as the tycoon deepens his investments in the loss-making electric vehicle maker.
The Nasdaq-listed company will form a new entity, Novatech Research and Development to house the R&D assets, which would then be sold to Pham, according to a regulatory filing released on Thursday. After the completion of the deal, Novatech will continue to run VinFast’s manufacturing operations in Vietnam, and help develop new products and technologies.
“The transaction reflects a further effort by the founder to facilitate the company’s long-term growth,” VinFast said in the statement.
The deal would be the latest cash injection by Pham to make VinFast a viable player in the global EV market. The company has been opening dealerships in Asia, Europe, the Middle East and the U.S. Earlier this month, it began producing cars at a factory in the southern Indian state Tamil Nadu.
In the first quarter of this year, the company’s net loss widened to $712 million from $617 million a year ago amid tougher competition in the global EV market. In 2024, VinFast, which aims to breakeven late next year, sold 97,000 EVs, mostly in Vietnam.
With a real-time net worth of $12.7 billion, Pham got his start in 1993 when he established an instant noodle business in Ukraine. He sold the business to Nestle in 2010 and used the money to launch Vingroup. Since then, Vingroup has grown into a major conglomerate with businesses in real estate, retail, healthcare, education, automobiles, and technology.
Earlier this month, Vingroup announced it will invest around 374 trillion dong ($14 billion) to develop a port and logistics hub outside of Hanoi where VinFast manufactures EVs in a 335-hectare factory complex.