Vingroup's Financial Gamble: The VinFast Effect

Vingroup, a major Vietnamese conglomerate, is under scrutiny as it heavily invests in loss-making electric vehicle maker VinFast. With rising borrowing costs and debt rated as 'junk' by Moody's and Fitch, the company faces financial instability, reflected in falling shares and decreasing foreign investments.

Vingroup, a leading Vietnamese conglomerate, is drawing attention due to its significant financial backing of the underperforming electric vehicle maker VinFast. Investors are skeptical as Vingroup's shares tumble to multi-year lows amidst rising borrowing costs and high-profile international debt downgrades.

Moody's and Fitch have downgraded Vinhomes, Vingroup's lucrative real estate arm, to speculative-grade ratings, citing concerns about its financial ties to Vingroup. The group faces mounting financial pressures while its market capitalization and share value continue to dwindle.

Despite foreign investor exit and borrowing cost increases, Vingroup is unwavering in its support for VinFast's development. However, it faces challenges as overseas investments plummet and profitability issues persist, raising questions about the conglomerate's financial health.

(With inputs from agencies.)