Vietnam’s EV maker VinFast to sell production lines, allocate $530M gain to pay $400M debt

VinFast, the electric vehicle (EV) maker under Vietnam’s conglomerate Vingroup, is set to restructure by offloading its entire domestic manufacturing footprint with factories, production lines, and battery facilities, in a deal worth $530 million. In a filing with the United States Securities and Exchange Commission (SEC) on Tuesday, VinFast said it would split its main Vietnamese subsidiary, VinFast Trading and Production JSC (VFTP), into two entities. VinFast Vietnam JSC (VFVN) will keep the parts of the core operation of VinFast, namely research and development, intellectual property, brand, sales networks, and after-sales services. VinFast will sell the post-split VFTP, including two factories in Vietnam with combined annual capacity of 500,000 cars and 500,000 electric motorcycles, along with battery pack assembly and cell production facilities. The buyer is an alliance in Vietnam with close ties to VinFast founder and CEO Pham Nhat Vuong. Tuong Lai, formerly Novatech, will take 49 percent of the deal. Novatech was established in August 2025 when it was separated from VinFast and then purchased by Pham Nhat Vuong for $1.6 billion. Tuong Lai’s key shareholders are business partners of Pham Nhat Vuong. Another buyer is Ngoc Quy Investment and Trading Development with 46.5 percent. Its shareholders are five Vietnamese citizens, also business partners of Pham Nhat Vuong. Vuong himself takes the remaining 4.4%. Of the $530 million purchase price, approximately $405 million is earmarked to repay and fully extinguish a non-interest-bearing promissory note owed to Vingroup and Vietnam Investment Group. Both entities are controlled by Pham Nhat Vuong. Following this transaction, the P-Note will be fully retired. As a result, about $125 million is for VinFast to fund research, brand development, and operations. As VFTP carries approximately $2.5 billion in loans and $831 million in lease liabilities, $3.3 billion in debt is expected to leave VinFast’s consolidated balance sheet. However, the new entity will lose VinFast’s preferential corporate income tax (CIT) in Vietnam and will have to pay the normal tax rate of 20 percent. The effective tax rate was 0 percent in 2023 and 2024, and 5 percent in 2025. Shareholders will vote at a virtual extraordinary general meeting on May 27. The deal is expected to close by the third quarter of 2026. Vietnam’s electric vehicle maker VinFast reports 4,893 overseas sales in Q1/2026