VinFast Auto Ltd., a Vietnamese electric vehicle manufacturer, made its public debut on Tuesday. Following its listing in New York, the company's share price rose by a whopping 175 per cent, adding $30.3 billion to the net worth of chairman Pham Nhat Vuong.
With the latest surge in his wealth, Vuong, already Vietnam's richest man and sole billionaire, is estimated to be over $37 billion.
Vuong possesses 99 percent of the company's outstanding shares, primarily through his parent company, Vingroup JSC. Vingroup's diverse business operations encompass real estate, resorts, schools, shopping malls, and more.
However, this concentrated ownership structure presents a challenge as it restricts investor participation, leading to potential liquidity concerns and significant market fluctuations.
VinFast's entry into the market was facilitated through a Special Purpose Acquisition Company (SPAC) listing, which enables companies to raise capital via an IPO for the purpose of acquiring or merging with an existing entity.
For the same, Vinfast agreed to merge with a blank-check company, Black Spade Acquisition Co., founded by Casino Mogul Lawrence Ho, and scrapedthe plan of raising capital through a normal IPO as investors in the market have been quite underconfident to invest in startups that are not churning profit.
Moreover, the automotive company anticipates sales to range between 45,000 and 50,000 units this year. Adding to its expansion endeavors, the company recently began constructing a factory in the US state of North Carolina.
If VinFast can maintain its gains, it will be in a somewhat unique position as other EV makers --Lordstown Motors Corp., Nikola Corp., and Faraday Future Intelligent Electric Inc -- have fared poorly after listing on the New York Stock Exchange via SPAC. These companies have lost more than 90 per cent of their market value since going public.
(Inputs from Bloomberg)
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