Vietnam’s VinFast Auto will skip a round of private investment in public equity (PIPE) funding and consider a follow-on offering after getting listed through a merger with special purpose acquisition company (SPAC) Black Spade Acquisition Co [NYSE: BSAQ], said VinFast’s chief financial officer (CFO) David Mansfield.
“We understand current market conditions are still not conducive thus we did not contemplate a formal PIPE process during the de-SPAC,” said Mansfield.
In June, the electric vehicle (EV) maker tapped private and institutional investors, as well as several investment banks, to raise at least USD 250m in PIPE capital through various structures including debt and equity financing, before deciding to drop the fundraising, according to two sources familiar with the situation.
Instead, VinFast – the automotive making unit of Vietnam’s largest private conglomerate Vingroup JSC [HOSE:VIC] – secured USD 150m in equity from a strategic investor in June, according to regulatory filings. Closing of the subscription is subject to the de-SPAC closing and regulatory approval.
In April, VinFast received USD 2.5bn in funding pledges from Vingroup and its founder Pham Nhat Vuong, comprising up to VND 36bn (USD 1.5bn) in grants by April 2024, and an up to VND 24bn (USD 1bn) loan from Vingroup, per regulatory disclosures.
The de-SPAC transaction is expected to close in the second half of this year, subject to shareholder and regulatory approvals, as announced.
SPAC redemptions over 86%
Black Spade Acquisition, which had USD 169m of cash in trust, saw its holders redeem shares worth USD 147m following an EGM on 13 July, per a regulatory disclosure. The special purpose acquisition company (SPAC) has USD 28.56m remaining in its trust account.
As per conditions for deal completion, the SPAC’s sponsor has committed up to USD 30m in backstop financing, while the SPAC must hold USD 5m in net tangible assets upon closing, regulatory disclosures show.
Current equity holders of Black Spade and the backstop subscriber will collectively own approximately 0.2%-0.3% of the post-combination company, depending on redemptions among other factors, according to a spokesperson at Black Spade Acquisition. Existing shareholders of VinFast will hold an around 99% stake in the combined entity post-listing, as announced.
Black Spade Acquisition has until 20 July 2024 to complete a merger, after securing shareholder approval for a 12-month deadline extension.
In May, VinFast and Black Spade announced the merger which would value VinFast at an enterprise value of USD 27bn and an equity value of USD 23bn, making it this year’s largest announced de-SPAC transaction globally so far, per Dealogic data.
The Asia-Pacific region last saw a deal of a comparable size two years ago, when Altimeter Growth Corp merged with Grab [NASDAQ: GRAB] in December 2021, valuing the Southeast Asian ride-hailing giant at USD 37.7bn, Dealogic data shows.
Established in 2017, VinFast manufactures and exports e-SUVs, e-scooters, and e-buses, having delivered four EV models in Vietnam to date and making its first batch of EV exports to the US earlier this year, according to a regulatory disclosure.
Black Spade Acquisition was founded by Hong Kong-headquartered Black Spade Capital, the private investment arm of Hong Kong billionaire Lawrence Ho, the eldest living son of the late Macau casino magnate Stanley Ho. Ho is chairman and CEO of holding company Melco International Development Limited [HKG:0200] and helms its casino operating subsidiaries Melco Resorts & Entertainment [NASDAQ:MLCO] and Studio City International Holdings Limited.
