Vertical Aerospace a leader in electric aviation, has announced a major financial milestone to bolster its long-term strategy. The company has entered into a term sheet agreement with its majority shareholder Stephen Fitzpatrick and its primary creditor Mudrick Capital Management, securing a $50 million funding commitment. This funding aims to strengthen Vertical’s financial position and support the development of its innovative eVTOL (electric vertical takeoff and landing) aircraft, the VX4, as part of its Flightpath 2030 strategy.
Key Aspects of the Agreement
- $50 Million Funding Commitment
Mudrick Capital has committed $25 million in upfront funding, with an additional $25 million as a backstop, which may be reduced if other third-party investments are secured. The agreement also provides Fitzpatrick the option to invest an additional $25 million on the same terms. - Debt Conversion
To enhance its financial position, approximately $130 million of Vertical’s outstanding convertible notes (50% of the total) will be converted into equity at $2.75 per share. This move significantly reduces Vertical’s debt burden and strengthens its balance sheet. - Future Fundraising Certainty
The conversion price for the remaining outstanding convertible notes has been fixed at $3.50 per share, offering greater predictability for future investors and supporting Vertical’s fundraising efforts. - Extended Loan Repayment Timeline
Vertical’s remaining loan repayment date has been extended to December 2028, ensuring financial stability as the company progresses through its certification programme. - Continued UK Commitment
Vertical will maintain its UK headquarters, reinforcing its commitment to innovation and leadership within the region’s aerospace industry.
Strategic Vision and Leadership
Stephen Fitzpatrick, Vertical’s founder, will remain on the board, playing a vital role in steering the company through the next phases of development and certification.
Fitzpatrick emphasized the importance of this agreement, stating:
“This funding and strengthened balance sheet position us to advance our development programme and bring electric aircraft to the skies. Our comprehensive strategy, coupled with the launch of Flightpath 2030, positions Vertical as a leader in one of the century’s most transformative technologies.”
He also highlighted the UK’s historic leadership in aerospace innovation, noting the critical role Vertical plays in decarbonizing aviation and pioneering zero-emission aircraft.
Jason Mudrick, founder and Chief Investment Officer at Mudrick Capital, expressed confidence in Vertical’s mission:
Stuart Simpson, CEO of Vertical Aerospace, added:
“This agreement underscores investor confidence in our Flightpath 2030 Strategy. By addressing immediate capital needs and positioning us for long-term success, we can concentrate on advancing the piloted flight test programme and certifying the VX4.”
Progress Toward Certification
Vertical’s piloted flight test programme is advancing rapidly. The company recently achieved untethered, piloted thrustborne flight in Phase 2 of testing, with the VX4 prototype exceeding expectations. The next step involves securing permits from the UK Civil Aviation Authority for Phase 3 — wingborne flight tests, a critical milestone in the certification process.
Next Steps
The term sheet reflects a non-binding agreement in principle and is subject to the execution of final transaction agreements and shareholder approval for amendments to Vertical’s articles of association. Detailed information about the agreement is available in the Company’s Form 6-K, furnished to the U.S. Securities and Exchange Commission on November 25, 2024.
Vertical Aerospace’s comprehensive funding deal and Flightpath 2030 strategy position it to lead the eVTOL market. By prioritizing innovation, financial stability, and sustainable aviation, the company is set to revolutionize air travel with zero-emission electric aircraft, fulfilling its mission to transform the future of aviation.
