In its recent report on Vingroup (VIC), Vinhomes (VHM), and Vincom Retail (VRE), Vietcap highlights the company’s proactive approach to capital raising and debt refinancing. Vietcap anticipates a more favorable global capital market in the second half of 2024/2025 compared to 2022/2023, supported by a shift in monetary policies from major central banks like the US Federal Reserve (Fed) and expectations of a steadier economic recovery.
This environment could bode well for VIC’s ongoing capital raising initiatives. Additionally, the Chairman is committed to providing funding from his personal assets for VinFast. Vietcap identifies several potential sources of capital, including:
− Domestic market: In the first five months of 2024, Vingroup successfully issued VND 14 trillion in domestic bonds through public offerings and private placements, in line with their announcements in July 2023 and April 2024.
− International debt: During their July 2024 earnings call, Vingroup’s management disclosed the arrangement of an international syndicated loan to refinance a significant portion of the bond principal issued by Vinpearl. In August 2024, Vinpearl issued USD 150 million worth of international exchangeable bonds.
− Chairman Pham Nhat Vuong’s Funding: At the Vingroup AGM in April 2024, Mr. Vuong pledged to provide at least USD 1 billion in funding for VinFast from his personal assets, in addition to the previously committed USD 1 billion in April 2023.
− Vinpearl’s Listing Plans: Vinpearl aims to list within the next 12-18 months, according to management.
− VinFast’s Equity Distribution Agreement with Yorkville: Signed in October 2023, this agreement provides VinFast with up to USD 1 billion for new share issuance over three years from 2023. VIC raised over USD 30 million from this agreement in Q4 2023.
− Restructuring of Certain Assets: (Details undisclosed) Vietcap notes that divesting stable/non-core businesses has been a channel for capital raising in recent years, including the sale of a 41.5% stake in VRE through SDI from March to Q3 2024, One Mount Group in 2021-2022, and Crown X in 2020-2021.
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