VinFast seeks to shed most debt with Vietnam factory spinoffs

Published Sat, May 16, 2026 · 01:35 PM

VINFAST Auto said that its planned sale of two Vietnamese factories will enable the electric vehicle maker to shed about 182 trillion dong (S$8.8 billion) in debt and obligations while potentially speed its path towards profitability.

“After restructuring, VinFast will essentially be debt-free, with only a small amount remaining,” the company said.

Founder Pham Nhat Vuong, who is also Vietnam’s richest man, said last month that he expected VinFast to hit the earnings before interest, taxes, depreciation and amortisation breakeven point in 2027. The company declined to provide a timeline for reaching profitability after the spinoff, but said it expects to generate a profit in its domestic market in 2027, according to the statement.

“This is a strategic pilot model for VinFast,” the struggling EV maker said in the statement. “If the model proves effective, we will continue to scale and expand it. If challenges arise, we remain prepared to make the necessary adjustments.”

Under the restructuring announced May 12, VinFast will separate its manufacturing operations into a standalone company, effectively outsourcing production at its plants in the northern port city of Haiphong and the north-central province of Ha Tinh.

The move would also allow the facilities to manufacture vehicles for other automakers, though VinFast said that its own orders will be prioritised. It will retain its overseas production operations at factories in India and Indonesia.

The manufacturing operations are housed under VinFast Trading and Production, or VFTP, and VinFast plans to transfer its entire stake in the unit – valued at about 13.3 trillion dong – to a buyer group led by Future Investment Research and Development, with Vuong also participating as a minority investor, according to a filing.

Following the transfer, Future Investment will hold 95.5 per cent of VFTP, while Vuong will own less than 5 per cent. The buyer group will also assume borrowings, bonds, finance leases, payables and other obligations tied to VinFast’s manufacturing operations.

Future Investment, formerly known as Novatech R&D, was spun out of VFTP last year to hold intellectual property assets before being sold to Vuong for about US$1.5 billion. Vuong later divested his stake in the firm. The filing lists Nguyen Hoai Nam as its majority voting shareholder.

Meanwhile, the restructuring could also ease the debt burden of parent Vingroup, which has total debt of about 358 trillion dong, according to data compiled by Bloomberg. The transaction would allow the EV maker to generate “significant value for Vingroup”, instead of continuing to draw resources from the conglomerate, VinFast said in the statement.

VinFast reported a net loss of 97.25 trillion dong in 2025, widening 25.7 per cent from a year earlier.

“Upon completion, the transaction could support VinFast’s transition towards a less asset- and debt-intensive operating structure,” Vietcap Securities wrote in a note. “The transaction may also help improve Vingroup’s balance-sheet risk perception.”

To be sure, the restructuring may not fully insulate the broader Vingroup ecosystem from manufacturing-related risks, given VinFast’s operational links to the spun-off entity and the involvement of Vuong, also founder and chairman of Vingroup, in the buyer consortium.

VinFast still faces challenges expanding overseas as well in an increasingly crowded EV market dominated by Chinese rivals, while scaling back plans for a North Carolina factory that is now expected to be smaller than originally envisioned.

The deal is expected to close by the third quarter, subject to shareholder and creditor approvals. BLOOMBERG