Pham Nhat Vuong Invests $321 Million in Vingroup Shares for the Railway Developer VinSpeed

Pham Nhat Vuong, Vietnam's richest person, has allocated Vingroup shares worth VND8.4 trillion (US$321 million) to the newly established railway company VinSpeed to augment its charter capital.

Pham Nhat Vuong answered Bloomberg's interview on June 12

On June 27, 87.6 million Vingroup shares were exchanged, as reported by VinSpeed High-Speed Railway Investment.

Mr. Vuong possesses a 51% ownership in VinSpeed, a firm he established in May. Subsequent to the purchase, Vuong's stake in Vingroup diminished from 13.86% to 11.6%. The action occurred following Vuong's transfer of 48 million Vingroup shares, valued at VND4.35 trillion, to VinSpeed on June 10. The railway developer currently possesses a 3.5% equity share valued at VND12.75 trillion in the conglomerate. The remaining VinSpeed shares are distributed among several companies associated with Vuong, whose net worth is estimated at $10.1 billion, according to Forbes.

Vietnam Investments Group, controlled by Vuong, possesses a 35% equity interest in VinSpeed, whereas Vingroup holds 10%, and Vuong's sons, Pham Nhat Quan Anh and Pham Nhat Minh Hoang, each own a 1% stake.

In May, VinSpeed requested official authorization to construct the North-South high-speed railway, with an estimated total expenditure of $61.35 billion, or around 13% of Vietnam's GDP from the previous year.

The business anticipated finalizing the project within five years. It aimed to secure a zero-interest loan from the state for 80% of the entire investment, to be repaid over a 35-year term from the date of payment. The corporation would mobilize the remaining 20%.

The corporation intends to repay the entire loan to the state after 35 years, while analysts anticipate that the payback term for the project may extend to 70 years. Furthermore, VinSpeed aspires to obtain certain designations, including the role of developer for particular urban and real estate initiatives next to train stations.