Mudrick Capital makes play for control over eVTOL developer Vertical Aerospace

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Release Date
October 26, 2024
Mudrick Capital makes play for control over eVTOL developer Vertical Aerospac
Vertical Aerospace’s largest creditor, Mudrick Capital Management, is moving to wrest control of the U.K.-based electric vertical take-off and landing developer away from founder Stephen Fitzpatrick through a proposal that would finance the company into 2026 and lay the groundwork for future fundraising.

Led by Jason Mudrick, Mudrick Capital extended an initial lifeline to Vertical in October 2021 when it agreed to provide $192 million in funding in the form of convertible notes — debt that can be converted into shares. The funding provided essential operating cash for Vertical, which was late to take advantage of the short-lived enthusiasm for special purpose acquisition companies (SPACs) and raised just a fraction of the private investments in public equity (PIPEs) secured by competing eVTOL developers Joby Aviation, Archer Aviation and Lilium that year.

Related: Embraer SPAC deal reflects changed funding landscape for eVTOL developers

Even as Lilium stumbles into insolvency, Mudrick appears optimistic about the long-term prospects for Vertical, which has outpaced its German competitor in commencing piloted testing of a full-scale eVTOL prototype despite having a smaller team and much lower cash burn. Mudrick has been engaged in negotiations with Vertical’s board for over a year to provide additional funding, but an earlier proposal was blocked by Fitzpatrick, the company’s controlling shareholder, who instead committed up to $50 million of his own money to avoid a dilution of his holding.

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