Vingroup Withdraws from $67 Billion Vietnam Rail Bid

Vingroup announced it would withdraw its investment proposal for Vietnam’s $67-billion high-speed railway project to focus on other national projects. Shares fell following this announcement. Vingroup's subsidiary, had initially proposed partially funding the venture. The company contends its exit will not delay the project's timeline.

Vietnam's largest conglomerate, Vingroup, has decided to withdraw its investment proposal for the ambitious $67-billion North–South high-speed railway project, the company announced Thursday.

The move comes after Vingroup reassessed its resources following the award of major national projects, such as an Olympic-standard stadium and essential rail lines. This decision affected shares of Vingroup and its units, causing a 7% drop for its developments and a 3% dip for hospitality arm Vinpearl, dragging the benchmark index down 2.24%.

Vinspeed, Vingroup's subsidiary, had initially proposed financing 20% of the 958-mile railway project linking Hanoi and Ho Chi Minh City, while requesting an 80% state-backed loan. However, the central bank raised concerns over Vingroup's high leverage and lack of rail infrastructure experience. The finance ministry also warned about the proposal's zero-interest terms, potentially affecting Vietnam's credit ratings.