Vertical Aerospace, a manufacturer of electric vertical takeoff and landing (eVTOL) vehicles, has been offered a $75 million financing deal from its primary creditor, Mudrick Capital Management.
The firm, which previously invested $200 million in Vertical in 2021 through convertible senior secured notes, has proposed an equity offering to support the company through 2026, according to a filing with the Securities and Exchange Commission (SEC).
As of June 30, 2024, Vertical Aerospace reported cash and cash equivalents totaling $84 million. The company’s response to the financing offer remains uncertain, as it may involve relinquishing control. “The company is exploring all options available to it with respect to its funding needs,” Vertical Aerospace stated in a separate SEC filing.
This proposal comes amid a challenging financial landscape for the eVTOL sector. German manufacturer Lilium recently announced it was facing insolvency after a request for a $54 million loan guarantee from the Bavarian government was denied.
In contrast, Joby Aviation, a competitor in the flying taxi market, has initiated a public offering of common stock expected to raise $202 million, following a $500 million investment from Toyota.
Vertical Aerospace has recently made strides in its flight testing program, successfully completing the first phase of piloted flight tests with its VX4 aircraft. This initial phase involved tethered flights at the Vertical Flight Test Center in the U.K.
Upcoming tests will include vertical takeoff and landing, as well as low-speed maneuvers powered by the aircraft’s propellers. The company is working with the U.K. Civil Aviation Authority (CAA) to expand its Permit to Fly in preparation for phase two, which will focus on piloted thrust-borne flight tests.
Additionally, Vertical Aerospace has secured a previous funding commitment of $50 million from its founder, Stephen Fitzpatrick, who stepped down as CEO earlier this year. The company has also partnered with industry leaders such as Honeywell, GKN Aerospace, and Leonardo to enhance its technology development.
While Rolls Royce, an original investor in Vertical, exited the electric flight business last year, Vertical Aerospace continues to advance its VX4 program, aiming for certification by the end of 2026, having already received design organization approval from the CAA.
