Spanish electronic device maker BQ, which was acquired by Vingroup’s VinTech subsidiary, fell into a “state of insolvency” and has submitted for bankruptcy proceeding.
The Madrid-based company had debts amounting to 40.9 million euros ($49.6 million) compared to assets of nearly 13 million euros by the time it filed for bankruptcy, according to legal filings dated February 8.
Vietnamese conglomerate Vingroup, through its tech unit VinTech, had acquired a 51% stake in BQ in December 2018 to strengthen its smartphone manufacturing capacity.
Spanish media reported that it was 51% voting shares, which were worth about 36 million euros.
Meanwhile, in 2014, Spain-based mid-market investor Diana Capital had funded BQ with 15 million euros in exchange for a 10% stake.
Vingroup did not comment for the story. An email sent to Diana Capital has not elicited a response.
It was understood that BQ did not cooperate to provide its financial information to VinTech, which was why BQ’s performance was not included in Vingroup’s annual reports, a source with knowledge of the matter told DealStreetAsia.
Vingroup and BQ had planned to jointly develop a plant in northern Vietnam that was slated to manufacture both VSmart (Vingroup’s smartphone brand) and BQ devices with an initial capacity of 5 million phones a year, according to an acquisition announcement in 2018.
VinSmart had licensed two of BQ’s models to sell under the VSmart brand, BQ then said.
Vingroup has been widening its business scope out of real estate to automobile, healthcare, education and tech, aiming to become an industrial and technology group.
It has recently trumpeted a 7 trillion dong ($303.6 million) bond plan this year to fuel its automobile and smartphone units, after expressing its ambition to sell its VSmart 5G devices to North American market.
The firm has raised billions of capital from international investors such as Singapore’s GIC, South Korean magnate SK Group and global asset manager KKR.
Vingroup’s market capitalisation currently stands at nearly $15.9 billion.