Vertical Aerospace, the UK-based aerospace and technology company working in the eVTOL electric aircraft arena has announced an additional investment of $50 million funded by its majority shareholder. The injection of cash will “support the company’s newly launched Flightpath 2030 Strategy to establish itself as a global leader in the eVTOL market by the end of the decade, including the ongoing development and certification of the VX4,” said a company statement.
The terms of the investment will see a commitment to $50 million of funding from shareholder Mudrick Capital made up of $25 million in upfront funding, plus an additional $25 million backstop that will be reduced by any amounts raised from third parties. Meanwhile, there is also an option for Stephen Fitzpatrick to invest a further $25 million on the same terms.
In other transactions, Vertical will undergo a strengthening of its balance sheet to the value of approximately $130 million through the issuing of convertible notes, 50% of which will be converted into equity at $2.75 per share, substantially reducing Vertical’s debt and significantly deleveraging the company’s balance sheet, enhancing its financial position. According to the company, there will be greater certainty for future investors through the fixing of the conversion price for the remaining outstanding convertible notes at $3.50 per share, while remaining loan repayment dates have been extended to December 2028 which should see the company through the certification program of its VX4 electric aircraft.
Other news reported by the firm on November 24. 2024, said that there will be a renewed commitment to the UK, with Vertical continuing to operate from its UK headquarters, maintaining its brand identity and focus on innovation. Also as part of the agreement, Vertical Aerospace’s founder, Stephen Fitzpatrick, will remain on the board, continuing to provide strategic direction as the company progresses through its certification program.
“It is great to be able to announce this new funding today,” said Stephen Fitzpatrick, Founder of Vertical Aerospace. “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 program and deliver on our mission to bring our amazing electric aircraft to the skies.”
“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. The UK has been at the forefront of the aerospace industry for the last hundred years. Aviation is one of the hardest sectors to decarbonize but ambitious British companies like Vertical are leading the world in pioneering zero emissions electric aircraft,” Fitzpatrick added.
Jason Mudrick, Founder and Chief Investment Officer at Mudrick Capital said, “This agreement underscores our appreciation of Vertical Aerospace’s position in the eVTOL sector and a team that has demonstrated its ability to deliver groundbreaking solutions for the future of sustainable aviation. By committing up to $50 million to the business and converting substantial debt into equity, we’re supporting a company, its leadership team and its partners, as Vertical brings the safest and most versatile aircraft to market.”
“This funding agreement underscores the strong confidence of our investors in our Flightpath 2030 Strategy and our ambition to lead the global eVTOL market,” added Stuart Simpson, CEO of Vertical Aerospace. 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 program and bringing the VX4 to market.”
Vertical’s piloted flight test program is progressing toward certification, recently achieving untethered, piloted flight in its Phase 2 of testing. The company is now working with the UK Civil Aviation Authority to secure permits to move into Phase 3 which will include wingborne flight tests – a critical step toward certification.
Vertical’s VX4 is a piloted, four-passenger, Electric Vertical Take-Off and Landing (eVTOL) aircraft, with zero operating emissions. Vertical is partnering with leading aerospace companies, including GKN, Honeywell, and Leonardo, to develop its own proprietary battery and propeller technology to develop its VX4 eVTOL aircraft. Vertical has already achieved around 1,500 pre-orders of the VX4, with customers spread across four continents, including American Airlines, Japan Airlines, GOL, and Bristow.