VinFast spoke out about the debt, the loss of more than tens of billion dollars in the prospectus

VinFast President Le Thi Thu Thuy recently spoke out explaining the debt twice the total value of assets and multi-billion dollar losses in the prospectus that the Vietnamese start-up car company submitted to the Securities Exchange Commission. US, when asserting that the company is “confident in financial health”.

VinFast, a member of Vingroup, filed with the US Securities and Exchange Commission (SEC) for an initial public offering (IPO) through Nasdaq earlier this month.

The prospectus that VinFast submitted to the SEC shows that the Vietnamese automaker has total assets of more than $4.4 billion, but owes a total of nearly $8.8 billion and has accumulated losses of nearly $4.7 billion. According to a financial director and economic expert in Texas, Professor-Dr. Khuong Huu Loc, told VOA, the above debt and loss shows that the company’s health is “very bad” with the threat of liquidity. “very large” account.

However, Ms. Thuy, who is also a vice president of Vingroup, said in an interview that was re-published by online newspapers specializing in businesses and automobiles in Vietnam on December 16 that the company was “completely confident”. financially healthy enough to go out into the world”.

In an interview from the same source “The rhythm of market life”, Ms. Thuy, who came to the US in March, signed a memorandum of understanding to build a VinFast electric car factory here with an initial investment of 2 billion USD. , said that “not the entire $4.7 billion figure is a true reflection of VinFast’s actual losses”. Explaining this, Ms. Thuy said that “the difference in accounting principles between the US and Vietnam leads to different results.”

The data on the prospectus shows that VinFast has a cumulative loss of $4.862 billion as of September 30, 2022. But according to Ms. Thuy, most of these expenses “are counted as long-term investments of the enterprise” according to Vietnamese accounting standards, and when US accounting standards are applied, these amounts “are accounted as expenses as soon as they are incurred, leading to accumulated losses being increased”.

According to the prospectus, VinFast has more than $8.732 billion in debt, of which long-term debt is more than $5.3 billion and short-term debt is more than $3.4 billion.

Explaining this number, Ms. Thuy was quoted by the online newspaper Nhip Thanh Enterprise as saying that “not all of this $8.8 billion is debt”. As explained by the head of VinFast, some of the “non-debt” liabilities of more than $ 2 billion are “an internal structure for the purpose of restructuring for the IPO”. Ms. Thuy said that, if the payables without the debt element were removed, “the total remaining payable of VinFast is $6.1 billion”.

Commenting to VOA just a few hours after the appearance of statements from the VinFast female president, Prof. Dr. Khuong Huu Loc said that it is not convincing to raise the different accounting standards of the US and Vietnam because American accounting is also unconvincing. clearly stipulate items on investment, depreciation and restructuring. The US’s strict regulations on accounting and auditing force businesses to be transparent, making it difficult to hide information, according to Mr. Loc.

Besides, even if the amount of debt drops to $6.1 billion according to Ms. Thuy’s argument, VinFast’s financial health is still in a worrying state when the asset-to-debt ratio is below 1. :first. This ratio has an ideal level of 2:1, GS-TS Loc noted.

The SEC is currently reviewing VinFast’s filing for an initial public offering in the US and will respond in 27-30 days.

In the interview, also published by the online magazine Autopro, Ms. Thuy confidently talked about the upcoming IPO prospect of VinFast, an unknown rookie car company that will have to compete with big famous car manufacturers. in the US market. According to Ms. Thuy, although it has only entered the market for 5 years, VinFast has “successfully built a modern car company, completely mastering the production development process”.

The Vietnamese automaker has also just exported the first 1,000 electric cars for delivery to customers in the US. However, before these cars were delivered to customers, newspapers in the US had negative reviews about the VF8 series, which was supposed to be sold to customers in a highly competitive market. best of the world.

The most recent article on a website specializing in automobiles in the US claims that the VF8 is poorly built, unfinished, and has an overpriced price tag of more than $50,000. The Jalopnik page assessed that VinFast’s cars were “not ready for the US (market)” and said that the 999 cars that VinFast exported to the US did not have CARB EO certification, so they could not be delivered to customers. Previously, two articles published on websites specializing in automobiles and technology in the US also suggested that VinFast’s VF8 electric cars would be difficult to compete with and convince customers in the US.