Flying Vehicle Company Offered $75M Financing Deal

Vertical Aerospace, an eVTOL (electric vertical takeoff and landing) vehicle maker, has been offered a $75 million financing deal from its main creditor.

Mudrick Capital Management, which invested $200 million in the form of convertible senior secured notes in Vertical in 2021, is proposing an equity offering to fund the company into 2026, according to a Securities and Exchange Commission (SEC) filing.

As of June 30, 2024, Vertical had cash and cash equivalents of $84 million, according to the company.

It is unclear how Vertical will respond to the offer, since it could mean relinquishing control of the company.

“The company is exploring all options available to it with respect to its funding needs,” stated Vertical Aerospace in a separate SEC filing.

This is the latest in the recent financial situation relating to the business of flying vehicles.

German eVTOL jet maker Lilium recently announced it was facing insolvency after the company was denied a $54 million loan guarantee it was seeking from the government of Bavaria.

On the other side, flying taxi company Joby Aviation recently announced a public offering of common stock expecting to raise $202 million for the electric aerial vehicle (EAV) maker, which followed a $500 million investment from Toyota.

Related:Flying Taxi Startup Faces Insolvency

For more flying vehicle and other embedded tech news  subscribe to our free newsletter!

As to the actual vehicles, Vertical Aerospace recently completed the first phase of its piloted flight test program with its VX4 flying vehicle.

This was the first phase of multiple piloted tethered flights conducted at the Vertical Flight Test Center in the U.K.

The next set of tests involve taking off and landing vertically and low speed flight maneuvers with lift generated by the propellers.  

Vertical is coordinating with the U.K. Civil Aviation Authority (CAA) to expand its Permit to Fly as it prepares for phase two testing, where the VX4 prototype is expected to undergo piloted thrust borne flight tests. 

Vertical Aerospace earlier had received a funding commitment of $50 million from Stephen Fitzpatrick, the company founder who stepped down as CEO earlier this year.

Vertical Aerospace flew its electric aircraft uncrewed at Cotswold Airport in Kemble U.K.

Vertical’s partners included Honeywell, which is designing the aircraft control system, and GKN Aerospace, Hanwha, Molicel, Leonardo and Syensqo. 

Rolls Royce, an original investor in Vertical, late last year decided to leave the electric flight business and put its advanced electric propulsion systems business up for sale.

Related:Air Taxi Company Seeks $200M From Stock Offering; $5.05 a Share

Vertical is developing a full-scale prototype to accelerate the VX4’s flight test program, with flight test learnings from both prototypes factored into the design of the certified VX4.

The EAV maker is building its flying vehicle to feature more advanced technology and is aiming for certification by the end of 2026. 

Vertical already has received design organization approval from the CAA.