Hong Kong family office SPAC agrees $27bn merger with Vingroup EV unit

The SPAC, Black Spade Acquisition Co, raised USD 150m through a US offering in July 2021. Ho, who is currently chairman and CEO of hotel and resort owner Melco International Development, is identified as the SPAC’s founder and sponsor. Hong Kong-headquartered Black Spade Capital is Ho’s family office. Its exposure ranges from equity and fixed income to real estate and pre-IPO deals.

The merger gives Vingroup’s EV unit, VinFast, an enterprise value of USD 27bn and an equity value of USD 23bn. This would make it the third-largest SPAC deal to date, Bloomberg reported. Grab, the Southeast Asian ride-hailing platform-turned-super app, ranks second. It merged with a US-listed SPAC in December 2021 at a valuation of USD 30.4bn and now trades at a 67% discount to the offering price.

VinFast was established in 2017 and claims to produce a full portfolio of e-SUVs, e-scooters, and e-buses at a manufacturing facility in Hai Phong with an initial annual production capacity of 300,000 units. Four EV models are currently available in Vietnam, and the VF 8 mid-size crossover e-SUV began shipments to North America earlier this year. Exports to Europe are next on the agenda, according to a filing.

VinFast has never received external PE or VC funding, although it has participated in rounds for other start-ups, including China-based autonomous driving technology developer CalmCar. The company is controlled by Phạm Nhật Vượng, founder and chairman of Vingroup, Vietnam’s largest conglomerate, and it filed for an IPO in March prior to agreeing on the SPAC merger.

As of December 2022, VinFast had delivered 93,000 vehicles – most of them powered by traditional internal combustion engines (ICE) – and over 162,000 e-scooters. ICE production was phased out by the end of the year. Sales of EVs alone in 2022 amounted to 7,400 units. Of these, about 100 were e-busses and the rest were subcompact crossover SUVs, chiefly the VF 8 and the subcompact VF e34.

The VF 5, a subcompact crossover e-SUV, was released in December 2022 and received 3,300 reservations within nine hours. Reservations for the VF 6 and VF 7 opened in the first half of 2023.

Last year, VinFast agreed to build a factory in North Carolina to serve the US market. It also opened 11 directly owned showrooms in the US, eight in Canada, two in France, and one in Germany. This is in addition to 88 showrooms in Vietnam, of which 57 are directly owned.

Revenue came to VND 14.9bn (USD 633.8m) in 2022, down from VND 16bn the previous year. The company’s net loss widened from VND 32bn to VND 48.9bn, with the cost of vehicles sold outstripping proceeds from vehicle sales by 2:1.

Full details of the merger have yet to be released, including the percentage ownership accruing to each party post-transaction, participation by other investors through PIPEs or forward purchase agreements, and financial projections for the business.

The filing said that the merged entity stands to receive an additional USD 169m in cash held in trust by the SPAC. However, the final amount will be dictated by how many SPAC shareholders elect to redeem their shares for cash on completion of the deal instead of exercising their warrants and purchasing shares.

“VinFast has already demonstrated the ability to quickly reach international markets. The partnership with Black Spade and listing of VinFast in the US represents the perfect capital-raising avenue for our future global ambitions and is also an important accomplishment for Vingroup," said Le Thi Thu Thuy - commonly referred to as Madame Thuy Le - global CEO of VinFast.

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• Topics
• Southeast Asia
• Greater China
• IPO
• Technology
• Industrials
• Vietnam
• Hong Kong (China)
• Electric Vehicles
• manufacturing
• Family office
• Black Spade Capital