Vingroup plans to lend VinFast up to 35 trillion VND (1.4 billion USD) by the end of 2026. Additionally, Vuong has personally pledged 50 trillion VND (2.1 billion USD) in sponsorship.

In a separate move, Vingroup will convert all existing loans, about 80 trillion VND (3.3 billion USD), to VinFast Vietnam into dividend-entitled preferred shares.

The support plan is designed to provide VinFast with sufficient financial resources to fund operations, investments and other obligations. The goal is to achieve the break-even point and cash flow balance by the end of 2026.

However, VinFast remains committed to independently raising capital to meet its financial needs. The support from Vingroup and Pham Nhat Vuong will be only be used if these independent efforts do not meet expectations.

VinFast has concluded its initial investment phase, which includes the operation of a 300,000-vehicle-per-year manufacturing plant in Cat Hai, Hai Phong. The company has also completed research and development of its product line and is shifting its distribution model from direct-to-consumer to dealership model. VinFast is now in its growth phase, focused on boosting sales across all markets and optimising its cost structure.

Vingroup's support agreement is based on a careful assessment of the potential impact on its cash flow and profitability. The goal is to maintain a balance between supporting VinFast and sustaining Vingroup's own financial health. Once VinFast achieves profitability and financial independence, Vingroup expects to benefit from its investments.

By converting loans to VinFast totalling about 80 trillion VND into preferred equity shares of VinFast Vietnam, Vingroup aims to alleviate short-term financial pressure on the electric vehicle maker. This move will allow Vingroup to maintain its stake in VinFast through dividend rights and the option to convert preferred shares into common shares of VinFast Vietnam Manufacturing and Trading Company or interests in VinFast Singapore.

The new loan of up to 35 trillion VND will be funded through the Vingroup’s business activities, dividends from subsidiaries and, if necessary, the strategic divestment of certain investments and subsidiaries at a fair market value.

Vuong, as VinFast's CEO and major shareholder, will personally sponsor 50 trillion VND. This personal commitment will not impact the interests of Vingroup or its shareholders.

This support decision was made in light of VinFast recently becoming the top-selling automotive brand in Vietnam and achieving positive results in the global market, affirming its potential for future growth./.VNA