(Reuters) – Electric-vehicle maker VinFast Auto announced on Wednesday that it will acquire a 99.8% stake in battery maker VinES from its founder, Pham Nhat Vuong. This move is aimed at enhancing its integration in the production value chain and gaining a competitive advantage.
VinFast, which is backed by Vietnam’s largest conglomerate Vingroup, stated that the strategic acquisition of VinES, which is also a member of the Vingroup ecosystem, will help ensure a steady supply of batteries. The company aims to save 5% to 7% on battery costs. VinFast was founded in 2017 and began producing EVs in 2021 with continuous financial support from its founder, who is also Vietnam’s richest man.
In a filing with the U.S. securities regulator, VinFast disclosed that it will acquire VinES by taking on debt of approximately $462 million. Vuong has agreed to provide grants to the EV maker to cover all interest payments related to VinES borrowings until 2027.
“The acquisition of VinES will enable VinFast to have control over our battery technology and supply chain, leading to optimized operating expenses and enhanced technology content in our electric vehicles,” said Thuy Le, VinFast’s global chief executive.
However, in the short term, VinFast expects its costs to rise due to battery research and development and factory operations. After the acquisition, VinFast will assume all rights and obligations for VinES’ assets.
VinFast, which made its Nasdaq debut in August, plans to establish kit assembly plants in nickel-rich Indonesia. The company intends to bring VinES along in order to take advantage of the material for battery production, according to Thuy Le’s remarks to analysts last month.
In the three months ending on September 30, the automaker recorded $343 million in revenue, a 159% increase from the previous year’s figure. However, its net loss widened by 33.7% to $623 million. VinFast has sold approximately 13,000 units in the second and third quarters of this year, with more than half of them going to its affiliate.
The company’s shares are currently trading at $7.49 each, compared to their peak of $82.35 in late August. Since the start of trading on August 15, following a merger with a blank-check company, the shares have lost approximately 54% of their value.
($1 = 24,440.0000 dong)
(Reporting by Akash Sriram in Bengaluru and Phuong Nguyen in Hanoi; Editing by Sriraj Kalluvila and Jonathan Oatis)
Credit: The Star : Tech Feed
