Vertical Aerospace secures $50 million funding to bolster Flightpath 2030 strategy
The UK-based electric vertical take-off and landing (eVTOL) aircraft manufacturer, Vertical Aerospace (Vertical), recently signed a term sheet with its majority shareholder, Stephen Fitzpatrick, and primary creditor, Mudrick Capital Management.
The agreement secures a $50 million funding commitment to bolster the company’s financial position and advance its Flightpath 2030 Strategy, with a focus on the ongoing development and certification of the VX4 aircraft.
Key features of the agreement
As part of the agreement, Mudrick Capital has committed to providing $25 million in upfront funding and an additional $25 million backstop, which will be reduced by any third-party investments.
Meanwhile, Stephen Fitzpatrick, the company’s founder, has the option to invest a further $25 million on the same terms.
Approximately $130 million in convertible notes, representing 50% of the outstanding amount, will be converted into equity at $2.75 per share.
This move significantly reduces Vertical’s debt and strengthens its balance sheet.
To provide clarity for future fundraising, the conversion price for the remaining outstanding convertible notes has been fixed at $3.50 per share.
Additionally, the repayment date for the company’s remaining loans has been extended to December 2028, ensuring financial stability throughout its certification programme.
Furthermore, Vertical has also reaffirmed its commitment to operating from its UK headquarters, maintaining its identity as a British innovator in the aerospace sector.
Stephen Fitzpatrick, the company’s founder, will remain on the board, continuing to guide the company’s strategic direction as it progresses through its certification programme.
Executive comments
Stephen Fitzpatrick expressed optimism about the new funding, saying, “We have been working hard to find a way to support the company in the short term, but also set us up for long-term success. The additional equity and stronger balance sheet will enable us to fund the next phase of our development programme and deliver on our mission to bring the amazing electric aircraft to the skies.”
Jason Mudrick, Founder and Chief Investment Officer at Mudrick Capital, highlighted the transformative potential of the eVTOL market.
“This comprehensive deal – alongside the recent piloted flight campaign and launch of the Flightpath 2030 strategy – means Vertical is positioned to be a winner in one of the 21st century’s most exciting technologies,” he said.
He added, “The UK has been at the forefront of the aerospace industry for the last hundred years. Aviation is one of the hardest sectors to decarbonise, but ambitious British companies like Vertical are leading the world in pioneering zero-emissions electric aircraft.”
Stuart Simpson, CEO of Vertical Aerospace, echoed these sentiments, stating, “This funding agreement underscores the strong confidence of our investors in our Flightpath 2030 Strategy and our ambition to lead the global eVTOL market.”
He added, “By addressing our more immediate capital needs and positioning us well to secure funding for the long-term, we can focus on advancing our piloted flight test programme and bringing the VX4 to market.”
Progress towards certification
Furthermore, Vertical recently marked a major milestone in its piloted flight test programme, achieving untethered, piloted thrustborne flight in Phase 2 of testing.
With the VX4 prototype surpassing performance expectations, the company is now working with the UK Civil Aviation Authority to secure permits for Phase 3—wingborne flight tests—an essential step towards certification.
The term sheet is non-binding and remains subject to final transaction agreements, shareholder approval, and amendments to Vertical Aerospace’s articles of association.
Further details are available in the company’s Form 6-K furnished to the US Securities and Exchange Commission on 25 November 2024.