SCHEDULE: Vertical Aerospace Secures $35M Convertible Note Funding

Sentiment:

Convertible Note Purchase Agreement Amendment 14 August 2026 5:08 PM

Vertical Aerospace Ltd. has amended and restated its convertible note purchase agreement with Mudrick Capital Management, L.P., securing an additional $35 million in funding.

Capital raiseVertical Aerospace Ltd. has issued an additional $35,000,000 in aggregate principal amount of 10.00% / 12.00% Convertible Senior Secured PIK Toggle Notes due 2030 to Mudrick Capital Management, L.P.

Summary

Vertical Aerospace Ltd. (the Issuer) has entered into an Amended and Restated Convertible Note Purchase Agreement with Mudrick Capital Management, L.P. (the Purchaser).
This agreement amends and supersedes a prior agreement dated April 20, 2026.
The company has issued an additional $35,000,000 in aggregate principal amount of 10.00% / 12.00% Convertible Senior Secured PIK Toggle Notes due 2030.
The conversion price for these notes has been fixed at $1.30 per ordinary share.
Mudrick Capital Management, L.P. now holds 100% of the existing notes and has provided consent for the issuance of these additional notes.
A Shareholder Agreement was also entered into, granting Mudrick Capital certain governance rights, including director nomination rights.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, indicating continued financial support and strategic alignment between Vertical Aerospace and its key investor, Mudrick Capital.

Positives

Secures an additional $35 million in funding, strengthening the company's financial position.
Confirms continued support from a significant investor, Mudrick Capital Management, L.P.
Establishes a fixed conversion price of $1.30 per ordinary share, providing clarity for future equity conversion.
The Shareholder Agreement grants governance rights to Mudrick Capital, potentially leading to more stable strategic direction.

Negatives

The issuance of convertible notes dilutes existing shareholders' equity upon conversion.
The increased interest rate on the notes (10.00% cash / 12.00% PIK) increases the company's debt servicing costs.
The company's reliance on convertible debt financing may indicate challenges in accessing traditional equity or debt markets.

Risks

Potential for significant dilution to existing shareholders if the notes are converted.
The company's ability to manage its debt obligations and interest payments.
The governance rights granted to Mudrick Capital could influence strategic decisions in ways that may not align with all shareholders' interests.

Future Outlook

The company has secured additional financing through convertible notes, which will support its operations. The fixed conversion price provides some certainty regarding future equity dilution. The company's ability to meet its debt obligations and the terms of the convertible notes will be crucial for its future financial health.

Management Comments

The Board of Directors has considered and is of the opinion that it is in the best interests of the Company to enter into this Agreement and to conduct a Board refreshment exercise at this time.
Mudrick Capital has dedicated significant resources in furtherance of the Board refreshment exercise in order to search for and nominate for appointment prospective members of the Board.

Industry Context

StockSavvy.ai notes that securing financing, especially through convertible instruments, is common for growth-stage companies in the aerospace sector, which often have high capital expenditure requirements and long development cycles. This move by Vertical Aerospace aligns with industry trends of leveraging investor capital for continued development and operational scaling.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Size Increase	The Board of Directors will be increased from eight to nine directors.	Promptly following execution of the Agreement	Increases board capacity and provides a seat for a nominee from Mudrick Capital.
Director Nomination Rights	Mudrick Capital gains the right to nominate directors based on its beneficial ownership percentage, subject to certain conditions.	Until termination of the Agreement	Enhances Mudrick Capital's influence on board composition and corporate strategy.
Committee Representation	Mudrick Capital has the right to designate directors to serve on the Board's committees.	So long as Mudrick Capital beneficially owns at least 10.0% of Ordinary Shares	Increases Mudrick Capital's involvement in key board oversight functions.

Related Party Transactions

The agreement is between Vertical Aerospace Ltd. and Mudrick Capital Management, L.P., a significant investor.
The Shareholder Agreement outlines specific governance rights and arrangements between the company and Mudrick Capital.

Stakeholder Impact

Shareholders may experience dilution if the convertible notes are converted into equity.
Existing shareholders' voting power and influence may be affected by the increased board representation for Mudrick Capital.
The continued financial support from Mudrick Capital could be viewed positively by other stakeholders, indicating confidence in the company's future.

Next Steps

The company will likely use the proceeds from the convertible notes for its ongoing operations and development.
The company is expected to hold a general meeting to vote on amendments to its Articles of Association as per the Shareholder Agreement.
Mudrick Capital will exercise its governance rights as outlined in the Shareholder Agreement, including director nominations.

Key Dates

Date	Description
2021-12-16	Issuer and Trustee entered into the Base Indenture, under which the Issuer issued Initial Notes.
2024-12-23	Issuer and Trustee entered into the First Supplemental Indenture, increasing interest rates and setting conversion prices.
2024-12-23	Issuer, Subsidiary Guarantor, and Trustee entered into the Second Supplemental Indenture, making the Subsidiary Guarantor a guarantor.
2026-04-20	Issuer, Subsidiary Guarantor, and Trustee entered into the Third Supplemental Indenture, extending maturity and permitting issuance of Series A Convertible Preferred Shares.
2026-05-20	Issuer issued $3,417,940.00 in aggregate principal amount of additional notes to the Purchaser.
2026-06-26	Issuer issued $3,224,471.00 in aggregate principal amount of additional notes to the Purchaser.
2026-07-27	Issuer issued $3,224,472.00 in aggregate principal amount of additional notes to the Purchaser.
2026-08-12	Amendment Date: Issuer and Purchaser entered into the Amended and Restated Convertible Note Purchase Agreement and the Shareholder Agreement.

Recommendation

hold

The company has secured necessary funding, which is a positive development. However, the issuance of convertible debt introduces potential dilution and increased debt servicing costs. The governance changes also indicate a significant influence from Mudrick Capital. While the funding is crucial, the long-term impact of dilution and the company's operational execution in the competitive aerospace market warrant a cautious 'hold' stance until further performance is demonstrated.

Keywords

convertible notes, financing, capital raise, aviation, aerospace, Mudrick Capital, Vertical Aerospace, governance

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