Flying taxi startup Vertical Aerospace Ltd. said it had secured as much as $50 million in new funding from Mudrick Capital Management, giving it financial breathing room to test and certify its first model.

By Abhijith Ganapavaram (Reuters) -UK-based Vertical Aerospace said on Monday that investor Mudrick Capital has agreed to convert half of its outstanding convertible debt to equity and extend the repayment date on the remainder to December 2028,

Vertical Aerospace has unveiled a new provisional funding agreement involving a $130 debt-to-equity swap and the provision of up to $50 million from primary creditor Mudrick Capital. Mudrick Capital is committing $25 million up-front with a potential $25 million backstop,

Vertical Aerospace Ltd. (NYSE:EVTL) shares are trading higher premarket on Monday. The company disclosed a signed term sheet with its majority shareholder, Stephen Fitzpatrick, and primary creditor, Mudrick Capital Management.

UK entrepreneur Stephen Fitzpatrick will cede control of Vertical Aerospace, the air taxi start-up he founded, as part of a rescue deal with its largest creditor, ending a protracted fight for the future of the company.

Pressure on Vertical's balance sheet will be eased by a new funding round as it strives to complete type certification of its VX4 eVTOL aircraft in 2028.

Vertical Aerospace's largest creditor Mudrick Capital has submitted fresh financing proposals that could see it inject up to $50 million into the UK-based electric vertical take-off and landing developer.

UK-based Vertical Aerospace said on Monday that investor Mudrick Capital has agreed to convert 50% of its outstanding convertible debt notes to equity and extend the repayment date on the rest to December 2028,