LONDON - Vertical Aerospace (NYSE: EVTL), a leader in electric aviation technology, has successfully closed its underwritten public offering, raising $90 million in gross proceeds. The company, currently valued at $406 million by market capitalization, has seen its stock price decline over 57% year-to-date according to InvestingPro data. The company, known for its pioneering VX4 electric vertical takeoff and landing (eVTOL) aircraft, initially targeted $75 million but increased the amount due to robust investor demand.
Over $60 million of the funds came from new investors, while Mudrick Capital contributed $25 million, following the investment agreement signed on December 20, 2024. This agreement also saw the conversion of $130 million of debt into equity, bolstering Vertical’s financial position.
The offering consisted of 15 million units priced at $6 each, with each unit including one ordinary share and half of two types of warrants, which could potentially bring in an additional $101 million if exercised.
The proceeds are earmarked for research and development of the VX4, expansion of testing and certification capacities, general working capital, and other corporate purposes. InvestingPro analysis indicates the company is quickly burning through cash, with a negative free cash flow yield, though it maintains a healthy current ratio of 5.33, suggesting strong short-term liquidity. The company aims to use the funding to meet its 2025 operational goals and accelerate spending in the latter half of the year, supporting its Flightpath 2030 strategy to achieve certification by 2028.
Vertical’s recent achievements include becoming the second company globally to complete piloted thrustborne flight maneuvers with a full-scale vectored thrust eVTOL aircraft in January 2025. While the stock has experienced significant volatility, with analyst price targets ranging from $1.97 to $13.58, InvestingPro subscribers have access to 13 additional key insights about the company’s financial health and market position. The company also welcomed aviation industry veteran Dómhnal Slattery as its new Chairman.
Stuart Simpson, CEO of Vertical, expressed confidence in the company’s trajectory and ability to lead in electric aviation, while Slattery highlighted the public offering’s success as a testament to investor confidence in Vertical’s vision and future in the eVTOL sector.
The offering was managed by William Blair as lead bookrunner and Canaccord Genuity as joint bookrunner. Following the offering, Vertical’s total shares outstanding, excluding treasury shares, number 84,552,721. The company also disclosed a cash and cash equivalents balance of $28 million as of December 31, 2024, and plans to announce its FY 2024 results on March 11, 2025.
This development is based on a press release statement from Vertical Aerospace.
In other recent news, Vertical Aerospace has seen a series of significant developments. Canaccord Genuity revised their price target for the company, lowering it to $13.50 from the previous $16.00, while maintaining a Buy rating. This adjustment came after the company’s recent capital raises, which according to analysts, have significantly mitigated financial risk for the company. In addition to this, Vertical Aerospace announced a proposed public offering of $75 million, aiming to fund research and development for the VX4 aircraft and expand testing and certification capacities.
The company also experienced a leadership transition with the appointment of Dómhnal Slattery as the new chairman of its Board of Directors. Canaccord Genuity had previously upgraded Vertical Aerospace’s price target to $16.00, maintaining a Buy rating for the stock. Furthermore, Vertical Aerospace secured a financial package involving the company’s majority shareholder Stephen Fitzpatrick and primary creditor Mudrick Capital Management, providing up to $50 million in new funding.
The company also completed the first phase of piloted flight tests for its electric Vertical Take-Off and Landing (eVTOL) aircraft, the VX4, and secured 1,500 pre-orders for the VX4 from clients across four continents. These developments highlight Vertical Aerospace’s ongoing efforts in the field of electric aviation.
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