- Vertical Aerospace secures agreement under which Mudrick
Capital will commit up to $50 million in the next equity round,
promoting financial stability.
- Transaction is expected to add approximately $180 million to
Vertical’s balance sheet, including through the conversion of
approximately $130 million of debt into equity, significantly
reducing Vertical’s debt. The conversion price of the remaining
convertible notes will be fixed.
- Founder, Stephen Fitzpatrick, retains a strategic role as a
board director to guide the company through its Flightpath 2030
Strategy.
Vertical Aerospace (Vertical) [NYSE: EVTL], a global aerospace
and technology company pioneering electric aviation, today
announced the signing of a term sheet among the Company, its
majority shareholder Stephen Fitzpatrick, and its primary creditor
Mudrick Capital Management.
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the full release here:
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The VX4 during piloted, untethered
testing (Photo: Business Wire)
This term sheet secures a commitment to $50 million in new
funding, strengthening Vertical’s financial position. The funding
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.
The term sheet includes:
- $50 million funding commitment by Mudrick Capital:
commitment includes $25 million in upfront funding, and an
additional $25 million backstop that will be reduced by any amounts
raised from third parties. The term sheet includes the option for
Stephen Fitzpatrick to invest a further $25 million on the same
terms.
- Balance sheet strengthening: approximately $130 million
of convertible notes (50% of the outstanding amount) 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.
- Greater certainty for future investors: by fixing the
conversion price for the remaining outstanding convertible notes at
$3.50 per share, Vertical’s future fundraising plans will be
supported.
- Remaining loan repayment date extended to December 2028:
extension of term provides further security through Vertical’s
certification programme.
- Renewed commitment to the UK: Vertical will continue to
operate from its UK headquarters, maintaining its brand identity
and focus on innovation.
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 programme.
Stephen Fitzpatrick, Founder of Vertical Aerospace:
“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.
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.”
Jason Mudrick, Founder and Chief Investment Officer at
Mudrick Capital:
“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 partners, as Vertical
brings the safest and most versatile aircraft to market.”
Stuart Simpson, CEO of Vertical Aerospace:
"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."
Vertical’s piloted flight test programme is progressing further
toward certification, recently achieving untethered, piloted
thrustborne flight in Phase 2 of testing. With the VX4 prototype
performing beyond expectations, the company is now working with the
UK Civil Aviation Authority to secure permits to move into Phase 3
— wingborne flight tests, which is a critical step toward
certification.
The parties have signed a non-binding term sheet reflecting the
material terms of the agreement in principle. It 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 November 25, 2024.
About Vertical Aerospace
Vertical Aerospace is a global aerospace and technology company
pioneering electric aviation. Vertical is creating a safer, cleaner
and quieter way to travel. Vertical’s VX4 is a piloted, four
passenger, Electric Vertical Take-Off and Landing (eVTOL) aircraft,
with zero operating emissions. Vertical combines partnering with
leading aerospace companies, including GKN, Honeywell and Leonardo,
with developing its own proprietary battery and propeller
technology to develop the world’s most advanced and safest
eVTOL.
Vertical has c.1,500 pre-orders of the VX4, with customers
across four continents, including American Airlines, Japan
Airlines, GOL and Bristow. Headquartered in Bristol, the epicentre
of the UK’s aerospace industry, Vertical was founded in 2016 by
Stephen Fitzpatrick, founder of the OVO Group, Europe’s largest
independent energy retailer. Vertical’s experienced leadership team
comes from top tier automotive and aerospace companies such as
Rolls-Royce, Airbus, GM and Leonardo. Together they have previously
certified and supported over 30 different civil and military
aircraft and propulsion systems.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Any express or implied statements contained in this Form 6-K
that are not statements of historical fact may be deemed to be
forward-looking statements, including, without limitation,
statements regarding the consummation of the agreement in
principle, including the entry into final transaction agreements
and the satisfaction of all closing conditions, completion of the
committed funding from Mudrick Capital and use of proceeds
therefrom, the sufficiency of the proceeds from the committed
funding to meet the Company’s more immediate capital expenditure
requirements, the Company’s satisfaction of all closing conditions
to the committed funding, our ability and plans to raise additional
capital to fund our operations, as well as statements that include
the words “expect,” “intend,” “plan,” “believe,” “project,”
“forecast,” “estimate,” “may,” “should,” “anticipate,” “will,”
“aim,” “potential,” “continue,” “is/are likely to” and similar
statements of a future or forward-looking nature. These
forward-looking statements reflect our current views with respect
to future events and are not a guarantee of future performance.
Actual outcomes may differ materially from the information
contained in the forward-looking statements as a result of a number
of factors, including, without limitation, the important factors
discussed under the caption “Risk Factors” in the Company's Annual
Report on Form 20-F filed with the U.S. Securities and Exchange
Commission (“SEC”) on March 14, 2024, as such factors may be
updated from time to time in the Company’s other filings with the
SEC. Any forward-looking statements contained in this Form 6-K
speak only as of the date hereof and accordingly undue reliance
should not be placed on such statements. The Company disclaims any
obligation or undertaking to update or revise any forward-looking
statements contained in this Form 6-K, whether as a result of new
information, future events or otherwise, other than to the extent
required by applicable law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241125462402/en/
For more information:
Justin Bates, Head of Communications
justin.bates@vertical-aerospace.com +44 7878 357 463
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