Concerning the information that Vingroup is downgraded by Fitch Ratings, Nguyen Viet Quang Chief Executive Officer and Director of Vingroup shared his opinions.
Why is Vingroup's outlook revised to negative from stable and what are your thoughts about this information?
Nguyen Viet Quang: Fitch recently revised Vingroup's outlook to negative because Vingroup financed its equity contribution in auto-manufacturing project VinFast, heightening business risk. That is completely in our forecast.
In fact, the total investment capital for VinFast project is expected to reach $4.2 billion, of which a part comes from its own and capital mobilized from member companies and another large part comes from borrowing.
Vingroup is a bright name in the private sector so do you think there is a better scenario than accepting downgrade of credit rating?
Nguyen Viet Quang: There are high risks when investing in automotive sector, so credit downgrade is unavoidable. Do not implement this project is the only way to avoid downgrade but with the enthusiasm of building Vietnamese automobile brand, we are willing to trade-off our benefits.
Does this downgrade of rankings affect the Vingroup's brand?
Nguyen Viet Quang: I suppose not. Fitch Ratings affirmed Vingroup long-term foreign- and local-currency issuer default ratings at 'B+' and other business sectors are still set positive.
Vingroup's image is more dynamic and powerful than before. In particular, our vision of becoming a global automotive manufacturer has received the trust and support of many international organizations.
On October 9, VinFast has been guaranteed a loan of $950 million with low rate by Euler Hermes, the German goverment's a credit insurance company, for the import of machinery and equipment for production.
This was the first transaction Euler Hermes conducted for a private company in Vietnam within a very short time.
In July 2018, Vinfast completed syndication of a $400 million term loan facility led by four international banks. In early October 2018, Vinpearl issued $125 million in exchangeable bond, raising its total issuance value to $450 million in the context of bad market conditions.
All of the above examples show that Vingroup's position and international reputation are well appreciated.
Will Vingroup continue to find additional funds for the VinFast project in the coming time?
Nguyen Viet Quang: We certainly must contrate on mobilizing more capital for VinFast. Vingroup now has a very good reputation and relationship with international financial institutions. Moreover, many credit organizations in Vietnam are expressing their enthusiastic support so we have reasons to hope that we can arrange enough capital for this key project.
Why does Vingroup determine to enter a high-risk investment sector while other business sectors are growing very well?
Nguyen Viet Quang: There are only 12 countries in the world having a full automobile manufacturing process so investing in this sector requires courage and dedication.
However, from the early beginning, we have identified the Vietnam-branded car manufacturing is a special mission, showing a strong demonstration of our social responsibility and patriotism. Therefore, we try our best to make it with international standard and quality.
In terms of investment, VinFast is very promising because of the potential for car sales in Vietnam in the future and towards export although the economic benefits of the early stage have not been seen yet.
Thank you very much!