Shareholders of Hong Kong-based Black Spade Acquisition Co today approved a SPAC merger with Vietnamese EV startup VinFast Auto Ltd, with the business combination expected to close Aug. 14.
The next step for this special purpose acquisition company would be to stage an IPO that, the partners have indicated, could generate $2 billion in equity for VinFast. Black Spade previously said it expects the automaker to have a $23 billion valuation.
Nasdaq listing to follow
“Upon such closing, VinFast will remain as the combined company, and its ordinary shares and warrants are expected to begin trading on the Nasdaq Stock Market LLC (‘Nasdaq’) under the new ticker symbols ‘VFS’ and ‘VFSWW’ respectively,” the partners said in a shared news release.
This comes as the second bit of good news for an EV manufacturer that had faced a long series of setbacks since the beginning of the year.
On July 28, VinFast went ahead with a groundbreaking ceremony at a site outside Raleigh, North Carolina, where it plans to open its first U.S. assembly plant in 2025. The automaker expects to hire about 7,000 employees — almost all from the local area — with the factory tooled up to produce about 150,000 battery-electric vehicles annually.
The initial cost will be $2 billion — about what the IPO is expected to raise. But the automaker plans to expand the facility in the years ahead, adding a battery plant and an electric bus assembly operation.
Founded in 2017, VinFast became the first automaker in Vietnam, at launch producing a modified version of the BMW X5 and other products. In 2021, however, it announced plans to become an all-EV brand, terminating production of models using internal combustion engines.
It showed off the first two, subsequently named the VF 8 and VF 9, at the November 2021 Los Angeles Auto Show. It later announced plans to follow up with at least two more EVs for the U.S. market.
While 999 of the midsize VF 8 crossovers landed at U.S. docks last December, it took until March before delivering the first to American customers. And subsequent media reviews were harsh, raising a variety of concerns, from balky steering to faulty digital displays.
A series of setbacks
At last month’s groundbreaking, Van Anh Nguyen, who is serving as both U.S. CEO of sales, as well as chief executive of the manufacturing operation, acknowledged there are issues. “We are learning” by talking to early owners and reading reviews, Nguyen told TheDetroitBureau.com.
Adding to the automaker’s headaches, VinFast reported a 49% drop in global revenue during the first quarter of 2023, with losses rising to $598 million. And then, questions were raised about whether the SPAC merger with Hong Kong-based Black Spade would go ahead.
The Thursday vote appears to resolve that concern, though it remains to be seen how investors will respond once VinFast is listed on the Nasdaq, with an anticipated $23 billion market capitalization. By comparison, EV startup Rivian has a $21 billion market cap, Lucid valued at $17 billion following a recent bail-out by Saudi Arabia’s sovereign investment fund. Among domestic manufacturers, General Motors and Ford both are valued at around $50 billion.
Looking further out, the company plans to launch its big, three-row VF 9 crossover in the U.S. by the end of this year – though several analysts said they’d not be surprising if that move were delayed. Two smaller EVs, the VF 6 and VF 7, are set to follow in 2024.