EV maker VinFast to buy majority stakes in its battery maker sibling
Technology
EV maker VinFast to buy majority stakes in its battery maker sibling
(Reuters) - Electric-vehicle maker VinFast Auto said on Wednesday it would acquire a 99.8% stake in battery maker VinES from its founder Pham Nhat Vuong as it seeks to ramp up its integration in the production value chain and competitive advantage.
VinFast, which was backed by Vietnam's largest conglomerate Vingroup (VIC.HM), said the strategic acquisition of VinES, also a member in the Vingroup ecosystem, would help it secure the supply of batteries as the EV maker sought to save 5% to 7% on battery costs.
Founded in 2017 and starting to make EVs from 2021, VinFast has continuously received financial support from its founder, also Vietnam's richest man.
In a filing with the US securities regulator, VinFast said it would acquire VinES for no consideration other than assuming debt of around $462 million with Vuong willing to provide grants to the EV maker for all interest payments relating to existing VinES borrowings up to 2027.
"The acquisition of VinES will help VinFast control our battery technology and supply chain, thus optimizing operating expenses and enriching technology content in our electric vehicles," said Thuy Le, VinFast's global chief executive.
In the short term, however, VinFast's costs are expected to increase for battery R&D and factory operations, the automaker said. After the acquisition, VinFast will acquire all rights and obligations over VinES' assets.
VinFast, which made its Nasdaq debut in August, plans to set up kit assembly plants in nickel-rich Indonesia, with plans to bring VinES along to take advantage of the material to produce battery, Thuy Le told analysts last month.
The automaker recorded $343 million in revenue for the three months ended Sept. 30, up 159% on the year. Its net loss widened 33.7% to $623 million. It has sold around 13,000 units in the second and third quarter this year, more than half of them to its affiliate.
The company's shares were traded at $7.49 each, compared with its peak of $82.35 in late August. They have lost about 54% of their value since the start of trading on Aug. 15 following a merger with a blank-check company.
