Vingroup to raise over $1 billion for business expansion

Vingroup has announced a plan to increase its charter capital by nearly seven per cent and changing some of its operation areas.

In a document sent to shareholders for approval, Vingroup plans to raise at least $1.078 billion by offering 250 million common shares to a maximum of five foreign organizations at a starting price of $4.31 per share. 

The final issuance price will be decided by the board of directors.

Vingroup currently has a charter capital of around $1.412 billion while its share price is hitting the all-time high at $5.11.

The additional share issuance will be carried out this year and buyers would be taken to properly effectuate stock transfer restrictions within one year.

Vingroup plans to use $259 million from the proceeds to finance its subsidiaries operating in the technological and industrial sectors including VinFast, Vinsmart, and VinTech. 

An amount of $388 million would be used as the additional financing for the group and its subsidiaries and the remaining to pay back loans.

Last August, Vingroup also announced the issuance of 84 million preference shares on a private offering basis to Hanwha Vietnam Opportunity Fund 1, which is invested by Hanwha Asset Management Co., Ltd. of Hanwha Group, for $400 million.

Vinhomes, a Vingroup residential arm, is building three mega townships in Hanoi and Ho Chi Minh City. It has lauched Vincity Ocean Park and Vincity Sportia in Hanoi while finetuning procedures for construction of Vincity Grand Park in Ho Chi Minh City. 

VinFast has recently completed the production of the first car in Haiphong-based factory and it plans to deliver first Vietnamese brand cars to buyers since the middle of this year.