Bristol-based Vertical Aerospace, a sustainable electric aviation company, has secured up to $50M (approximately €47.6M) in new funding from creditor Mudrick Capital Management by signing a term sheet. This funding is part of a $180M (nearly €171.1M) deal.
The funds will enable Vertical Aerospace to strengthen its balance sheet, reduce its debt, and provide the financial stability necessary to support the company’s Flightpath 2030 Strategy.
The term sheet includes $25M (€23.74M) upfront and an additional $25M backstop that can be reduced by third-party funds. Vertical Aerospace founder Stephen Fitzpatrick also has the option to invest up to $25M under the same terms.
As part of the deal, nearly $130M (€123.49M) in convertible debt will be converted into equity at $2.75 per share, reducing Vertical Aerospace’s debt and improving its balance sheet.
The remaining convertible notes will have a fixed conversion price of $3.50 per share, providing certainty for future fundraising.
Additionally, the repayment date for Vertical Aerospace’s loans has been extended to December 2028, adding security to the company’s operations during its certification programme.
Vertical Aerospace reports that it will continue to operate from its UK headquarters, maintaining its focus on innovation. Stephen Fitzpatrick will remain on the board to guide the company’s strategy as it works through its certification process.
Jason Mudrick, Founder and Chief Investment Officer at Mudrick Capital, says, “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.”
Capital utilisation
The funding will also help in the continued development and certification of Vertical Aerospace’s VX4 aircraft.
Stephen Fitzpatrick, Founder of Vertical Aerospace, says, “It is great to be able to announce this new funding today. 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.”
“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.”
Fitzpatrick adds, “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.”
Vertical Aerospace advances flight tests
Vertical Aerospace’s piloted flight test program is progressing toward certification, having recently completed untethered, piloted thrustborne flight in Phase 2.
The company is working with the UK Civil Aviation Authority to obtain permits for Phase 3, which involves wingborne flight tests, a key step for certification.
Stuart Simpson, CEO of Vertical Aerospace, says, “This funding agreement underscores the strong confidence of our investors in our Flightpath 2030 Strategy and our ambition to lead the global eVTOL market.”
“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.”
Brief about Vertical Aerospace
Vertical Aerospace is an aerospace and technology company specialising in electric aviation. Its VX4 is a piloted, four-passenger eVTOL aircraft, designed with zero operating emissions.
The company collaborates with aerospace firms such as GKN, Honeywell, and Leonardo, while also developing proprietary battery and propeller technology to create a safer and more advanced eVTOL.
Vertical Aerospace has received approximately 1,500 pre-orders for its VX4 aircraft from customers across four continents, including American Airlines, Japan Airlines, GOL, and Bristow.
Founded in 2016 by Stephen Fitzpatrick, Vertical Aerospace’s leadership team brings experience from companies like Rolls-Royce, Airbus, GM, and Leonardo, with a track record of certifying and supporting over 30 civil and military aircraft and propulsion systems.
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