Hard on the heels of its annual results announcement which precipitated a 30%+ fall in its share price eVTOL developer Vertical Aerospace has an ‘agreement in principle’ for further funding package valued at up to USD 850 million.
Vertical says that as a result of the package it will have a total of USD160m available in near term working capital when the USD50m raised today is combined with USD30m available when the agreed facilities are executed, anticipated tax relief and government grants and the company’s existing cash on hand. Funding which will allow it to complete transition flight with the VX-4 prototypes carry out a series of public demonstration flights using the VX-4s as progress development of its hybrid demonstrator and begin production of the Valo aircraft.
The overall package includes Equity Capital Issuance – USD50 million. The Company has closed the new issuance of ordinary shares, raising $50 million of immediate working capital..
Convertible Secured Notes – Maturity Extension and Up to USD 50 million of New Notes.
Mudrick Capital has agreed as part of the agreement in principle to amend the Company’s existing 10.00% / 12.00% PIK Convertible Secured Notes to extend their maturity from December 2028 to December 2030 – ensuring debt matures after planned certification in 2028. Mudrick Capital also agreed in principle to provide a facility under which it would purchase up to $50 million of new additional convertible secured notes subject to certain conditions, issuable in tranches over 12 months, and on the same terms as the existing notes.
Series A Convertible Preferred Equity – Up to $250 million. Yorkville has agreed in principle to purchase up to $250 million of Series A Convertible Preferred Shares of the Company, issuable at the Company’s option in tranches over 24 months, subject to certain undisclosed conditions. The preferred shares are to carry a 0% dividend, and convert at a share price determined at individual tranche issuance and conversion dates, in the ordinary course.
Equity Line of Credit — Up to $500 million. Yorkville also has agreed in principle to provide an equity line of credit of up to $500 million over 36 months, with the ability for the Company to draw on it from time to time subject to customary conditions. This structure would enable Vertical to raise common equity at progressively higher prices as it achieves milestones, capturing the full benefit of valuation appreciation for existing shareholders.
The agreement in principle calls for the participants to use their best efforts to execute the definitive documents by mid April at which point the full suite of capital facilities would become available to the Company.
Following the announcement of the package the company’s shares surged by 12% recovering some of the recent lost ground.
Image: Vertical Aerospace
