HANOI (Reuters) - Vietnamese electric vehicle (EV) maker VinFast said on Friday it has entered into a share subscription of up to $1 billion with U.S.-based fund Yorkville Advisors as it seeks to fund expansion in overseas markets.
VinFast has the option, but not the obligation, to require Yorkville to subscribe for up to $1.0 billion worth of ordinary shares in VinFast at any time during the term of the agreement, VinFast said in a filing to the U.S. securities authority.
VinFast, which was founded and almost entirely owned by Pham Nhat Vuong, Vietnam's richest man, made a stellar Nasdaq debut in mid-August following a merger with a blank-check company.
The carmaker garnered a valuation of about $85 billion – higher than that of legacy U.S. peer Ford – on the listing day but lost over 84% since as of Wednesday's close. Its shares traded at $5.69 each.
"This new source of equity funding provides us with valuable optionality and access to capital to continue to expand our business on a global scale," said VinFast chief finance executive David Mansfield said in a statement.
"While we are under no obligation to draw on the full amount, the transaction aligns with our goals of opportunistic capital raising while adding liquidity to our shares over time."
VinFast so far has sold around 22,000 cars, aiming to meet this year's sale target of 40,000 to 50,000 units.
More than half of its sale went to a Vietnam-based fleet operator, controlled by Vuong.
Mark Angelo, Founder and President of Yorkville said the fund looked forward to seeing VinFast's continued success.
Yorkville two years ago bought up to $400 mln worth of share in EV maker Lordstown.
VinFast has entered the market at a time when EV prices are under pressure, led by cuts at market leader Tesla (NASDAQ:TSLA) and a range of Chinese companies.
VinFast's founder Vuong is still its biggest financial backer. In April it said it would receive a fresh round of funding pledges worth $2.5 billion for its future development, of which $1 billion would be from its founder's pocket.