Vertical Aerospace announces $50m funding from Mudrick Capital

Vertical Aerospace has announced $50m in new funding as part of a transaction worth $180m with Mudrick Capital.

The signing of a non-binding term sheet by Vertical, its primary creditor Mudrick Capital and majority shareholder Stephen Fitzpatrick has secured a commitment in principle to $50m in new funding for the eVTOL developer.

Vertical said the funding will support the its newly launched Flightpath 2030 Strategy which includes ongoing development and certification of the VX4.

As part of the agreement, Vertical’s founder Fitzpatrick will remain on the board. 

“It is great to be able to announce this new funding today,” he said. “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.” 

The term sheet includes:

• $50m funding commitment by Mudrick Capital: commitment includes $25m in upfront funding, and an additional $25m backstop that will be reduced by any amounts raised from third parties. The term sheet includes the option for Fitzpatrick to invest a further $25m on the same terms. 
• Approximately $130m of convertible notes (50% of the outstanding amount) will be converted into equity at $2.75 per share.
• By fixing the conversion price for the remaining outstanding convertible notes at $3.50 per share, Vertical said its future fundraising plans will be supported.
• Remaining loan repayment date extended to December 2028.
• Vertical will continue to operate from its UK headquarters, maintaining its brand identity and focus on innovation.

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 $50m to the business and converting substantial debt into equity, we’re supporting a company, its leadership team and partners, as Vertical brings the safest and most versatile aircraft to market.”

The term sheet remains subject to implementation and execution of final transaction agreements, as well as shareholder approval of amendments to Vertical’s articles of association. 

Additional information can be found in the Company’s Form 6-K furnished to the Securities and Exchange Commission on Monday November 25th, 2024.