In a recent development, bondholders of Vingroup (stock code: VIC), an illustrious corporation, have unanimously consented to extend more than half of its $625 million worth of convertible bonds by an additional 18 months. Notably, the aforementioned bonds were initially set to mature in May this year; however, Vingroup will now repay only half of the amount, while the remaining half will be subject to an 18-month extension.
These bonds were issued by Vingroup in the first half of 2022 and can be converted into VinFast shares by a consortium of reputable institutional investors. Each bond was offered at a price of $1 million.
This maneuver will alleviate Vingroup’s cash flow constraints as it seeks to raise 10,000 billion VND ($395.3 million) to finance its electric vehicle manufacturing subsidiary, VinFast Auto Ltd. This subsidiary is aggressively expanding into the global market and has primarily relied on its parent company for funding to date.
The company has not disclosed the specific terms of the revised agreement. However, sources familiar with the matter have indicated that the remaining half of the bonds will be repaid within 18 months.
The holders of these convertible bonds include notable private credit providers such as KKR & Co. and Seatown Holdings Pte, an indirect subsidiary of Temasek Holdings Pte. Other notable holders include Meritz Securities Co, Deutsche Bank AG, and Dignari Capital Partners HK.
On October 25, 2023, Vingroup also successfully completed the offering of $250 million in international bonds. These bonds are convertible into Vinhomes shares owned by Vingroup and will mature in 2028. The interest rate will range from 9.5% to 10% per annum, paid quarterly, and will be denominated in US dollars. The conversion price into Vinhomes shares will range from 51,635 VND to 53,880 VND per share.
Back in mid-April of this year, the conglomerate led by billionaire Pham Nhat Vuong successfully issued VICH2426001 bonds with a total value of 2,000 billion VND. These bonds were issued on April 10, 2024, have a term of 24 months, and will mature on April 10, 2026, with an interest rate of 12.5% per annum.
Prior to that, Vingroup launched a private bond offering with a total issuance value of 8,000 billion VND. These were non-convertible, non-warrant-attached, unsecured corporate bonds that establish Vingroup’s direct obligation to repay the debt.
The bonds will be divided into four tranches, with issuance scheduled between April 2024 and June 2024, with a maximum term of 24 months from the date of issuance. The proceeds from this issuance will be used to restructure Vingroup’s existing debts.
