On March 17, VinGroup’s Board of Directors issued resolution No. 03/2024, according to which VinGroup and its subsidiaries will sell 100% of the capital contribution in the Investment and Trade Development Limited Liability Company (SDI). SDI is a company that owns over 99% of the charter capital of Sado Trading Business Joint Stock Company which is a major shareholder and owns 41.5% of Vincom Retail’s charter capital.
Thus, after the transaction under this decision is completed, all three SDI, Sado and Vincom Retail are no longer subsidiaries of VinGroup.
According to state-controlled media, the transfer price of 100% of VinGroup’s capital at SDI is about more than VND39 trillion ($1.6 billion), equivalent to VND32,000/share. VinGroup will earn VND21 trillion ($875 million) in pre-tax profit from this deal.
It is worth mentioning that Vincom Retail is a profitable company. In 2023, Vincom Retail records net revenue of VND9.791 trillion, profit after tax of VND4.41 trillion, revenue growth of 33% and profit growth of 58.8% over the same period last year. With such “dreamlike” business results, VinGroup was forced to sell, perhaps because VinGroup was too cash-strapped.
Also in 2023, VinFast will lose up to $2.4 billion. The figure of $875 million in profit from the sale of Vincom Retail is nothing compared to VinFast’s huge loss. It can be seen that VinFast is the child that burns the most money of VinGroup, while Vincom Retail, which is making a profit, has to be sold to make up for VinFast’s losses. So, is it different from VinFast burning money and burning Vincom Retail?
Among VinGroup’s subsidiaries, VinGroup should have sold VinFast, not the profitable companies. But perhaps, if VinFast were to be sold, no one would jump in and embrace this debt. Pham Nhat Vuong is currently “riding on the back of a tiger.” He must stick to VinFast to the end and must find every possible direction to save VinFast from its current loss-making situation.
It can be said that the US market is where VinFast burns the most money, and all hopes there have been extinguished. Cars there cannot be sold, currently there are about 3,500 cars imported to the US for nearly 2 years still lying in the yard.
In early October 2023, VinFast’s VFS stock price on the Nasdaq floor breached the $10 mark, Pham Nhat Vuong asked for help from Yorkville Advisors Investment Fund, and signed a memorandum of understanding with this Fund, with a stock purchase package worth $1 billion. However, up to now, VinFast’s shares not only have not increased but have also breached the $5 mark.
When VinFast signed a memorandum of understanding with Yorkville Advisors, we analyzed and evaluated that this was just VinFast’s move to regain investors’ trust, not Yorkville Advisors’ money to buy VFS shares. If the market does not react positively, it will be difficult for this fund to spend money to buy VFS.
In the US, VinFast cars could not be sold and their stock prices fell dramatically. Even though we asked for help from the Investment Fund, the stocks still fell, the factory was waiting for capital, but the capital was nowhere to be found. VinFast’s “American advance” path was a big mistake, leaving Pham Nhat Vuong stranded and bogged down here. In the US, it was impossible to find money for VinFast’s operating system to burn.
It is unclear how many profitable companies VinGroup currently has. If Vuong continues to be in need of cash and sell them, he will soon “go bankrupt.”
It is worth mentioning that, when he is stuck with money, Vuong can only sell “laying chickens” but no one buys “money-burning machines.” That is a difficulty for Vuong.
Today, Vincom Retail is “burned to ashes” because VinFast is burning money. With the momentum of burning money next year being higher than last year, it is feared that there will be other subsidiaries of VinGroup, especially those work in profit.
To save the situation, VinGroup can only sell VinFast, or stop VinFast from burning more money, but both of these measures are impossible. Currently, Vuong still does not have a solution.
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VinFast burns money, causing its brother Vincom Retail to suffer
