Vertical prices $90m public offering at $6 per unit

Vertical Aerospace has announced the pricing of its underwritten public offering of $90m through a sophisticated structure which combines ordinary shares and warrants – linked to future milestones.

The $90m offering is priced at $6 per unit which contains one ordinary share and a warrant with two tranches.

The tranche A warrants will expire upon the satisfaction of two conditions including successful demonstration of a wing-borne flight of its VX4 prototype aircraft and successful volume and price conditions or after a period of five years from the date of issuance.

The company has priced tranche A of the warrants to be exercisable at $6.00 per whole ordinary share with tranche B exercisable at a price of $7.50 per whole ordinary share with a five-year expiration.

The offering, expected to close around January 24, 2025, will be led by William Blair as lead bookrunner and Canaccord Genuity as joint bookrunners.

Proceeds will fund Vertical’s VX4 development, testing and certification expansion, and general corporate purposes.

Due to the EVTOL sector’s capital needs, the lower warrant exercise price poses a dilution risk for existing shareholders.

The premarket price of Vertical Aerospace (EVTL) nosedived by nearly 30%.