Vietnam's VinFast completes SPAC merger, sees volatile trading debut

Black Spade Acquisition Co, a SPAC launched by the family office of Lawrence Ho, son of Macau casino tycoon Stanley Ho, agreed to merge with VinFast, a subsidiary of Vietnamese conglomerate Vingroup, in May at an enterprise value of USD 27bn. There have only been two SPAC mergers at higher valuations; one of them involved Southeast Asian super app Grab, which transacted at USD 30.4bn in late 2021.

Ho was identified as the founder and sponsor of the SPAC. The family office is known as Black Spade Capital and is headquartered in Hong Kong. Black Spade Acquisition raised USD 169m in July 2021, pricing its shares at the standard USD 10.00. The stock briefly spiked to USD 18.50 ahead of the completion of the merger and the transfer to NASDAQ.

Debuting on NASDAQ on August 15, the stock peaked at USD 37.78 and closed at USD 37.00. It slipped to USD 30.11 a day later and ended August 17 at USD 19.99 as SPAC investors redeemed their positions. Grab slipped below the SPAC offering price on its debut and currently trades below USD 3.30 with a market capitalisation of USD 12.7bn.

VinFast’s market capitalisation of USD 72.9bn is still 1.5x that of Ford Motor and General Motors – even though the company had sold only 19,000 EVs as of June 2023. Most of its business has been in traditional internal combustion engine (ICE) vehicles and e-scooters, with deliveries amounting to 105,000 units and 182,000 units, respectively.

Established in 2017, VinFast started producing e-scooters in 2018, ICE passenger cars in 2019, and e-buses in 2020. ICE capacity was fully phased out last year to focus on EVs. As of end-2022, the company was producing nine e-scooter models, one e-bus model, and two EV passenger car models. Four EV passenger car platforms have now been rolled out and the goal is to reach six by the end of this year.

EV sales came to 7,400 units in 2022. Of these, about 100 were e-buses and the rest were subcompact crossover SUVs, chiefly the VF 8 and the subcompact VF e34. All these sales were in Vietnam. Deliveries of the VF 8 began in the US in the first quarter of 2023. The full-size SUV VF 9, the B-SUV VF 6, and the C-SUV VF 7 will be shipped to the US, Canada, and Europe. Deliveries are expected to begin this year.

Last year, VinFast agreed to build a factory in North Carolina to serve the US market. It already has a manufacturing facility in Hai Phong, Vietnam with an initial annual production capacity of 300,000 units. As of June, there were 90 showrooms in Vietnam, 14 in the US, nine in Canada, and nine in Europe.

Revenue came to VND 14.9bn (USD 633.8m) in 2022, down from VND 16bn the previous year, according to a filing. 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.

Following the merger, Vingroup retained a 51% interest in VinFast and Pham Nhat Vuong, Vingroup’s founder and chairman, held approximately 48% through other investment entities. The sponsor and other initial shareholders of Black Spade Acquisition owned 0.2%, while SPAC shareholders had 0.1%, assuming zero redemptions.

“VinFast has accelerated the global EV revolution by making smart, safe, and environmentally friendly EVs accessible to everyone,” said Le Thi Thu Thuy - commonly referred to as Madame Thuy Le - global CEO of VinFast, in a statement.

“Today’s successful listing not only supports VinFast’s commitment to sustainable mobility at a global scale but also unlocks access to the capital markets and important avenues for future development. Further, it is our hope that VinFast’s listing will inspire and unleash greater opportunities for Vietnamese brands to participate in the global market.”

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• Topics
• Southeast Asia
• Greater China
• IPO
• Cleantech
• Industrials
• Vietnam
• Hong Kong (China)
• Electric Vehicles
• Black Spade Capital
• SPAC