Vertical Aerospace Announces Launch of Proposed Underwritten Public Offering

Rhea-AI Summary

Vertical Aerospace (NYSE: EVTL) has announced the launch of a $75 million underwritten public offering of units. Each unit will consist of one ordinary share and two warrant components: one-half of a Tranche A warrant and one-half of a Tranche B warrant. The units' components will be issued separately, with ordinary shares trading on NYSE under 'EVTL', while the warrants will not be listed on any exchange.

William Blair will serve as lead bookrunner, with Canaccord Genuity as joint bookrunner. The company plans to use the proceeds to fund research and development of the VX4, expand testing and certification capabilities, and support general working capital needs. The offering will be made through a preliminary prospectus supplement to the company's Form F-3 registration statement.

Positive

• Secured $75 million in potential funding for R&D and operations
• Established partnership with reputable underwriters William Blair and Canaccord Genuity

Negative

• Potential dilution for existing shareholders through new share issuance
• Warrants will not be listed on any exchange, potentially limiting their liquidity
• Offering indicates need for additional capital to fund operations

Insights

Financial Analyst

Vertical Aerospace's $75 million public offering marks a critical financing move in the capital-intensive eVTOL sector. The unit structure, combining shares with two warrant tranches, suggests a strategic approach to balance immediate capital needs with future funding flexibility. For context, eVTOL development typically requires hundreds of millions in capital before certification, making this raise a important stepping stone.

The offering's structure merits careful analysis: The split between shares and two warrant types (Tranche A and B) indicates a sophisticated approach to minimize immediate dilution while providing potential upside for investors. However, if all warrants are eventually exercised, this could lead to significant additional dilution for current shareholders.

The specified use of proceeds for R&D and certification activities is particularly notable given the VX4's development timeline. With a market cap of $643.4 million, this offering represents approximately 11.7% of the company's current value. The timing suggests Vertical is likely looking to extend its runway through critical development milestones, particularly as certification testing intensifies.

The choice of a traditional underwritten offering, rather than alternative financing methods like convertible notes or PIPE deals common in the aerospace sector, indicates a preference for cleaner capital structure despite potentially higher immediate dilution. The non-listing of the warrants on any exchange suggests these are being structured as strategic instruments rather than trading vehicles.

For investors, this raise carries several implications: 1) It strengthens Vertical's balance sheet during a critical development phase, 2) The warrant structure could create additional future pressure on share price, but also provides potential upside participation and 3) The company's ability to secure underwriting from established firms like William Blair and Canaccord Genuity lends credibility to their development progress.

LONDON--(BUSINESS WIRE)-- Vertical Aerospace (Vertical) (NYSE: EVTL) ("Vertical” or the “Company”), a global aerospace and technology company that is pioneering electric aviation, today announced that it has commenced an underwritten public offering of $75 million of units (the "Offering”). Each unit consists of one ordinary share and one-half of one Tranche A warrant and one-half of one Tranche B warrant. The ordinary shares and the warrants comprising the units are immediately separable and will be issued separately in the Offering. The Offering is subject to market and other conditions, and there can be no assurance as to whether or when the Offering may be completed, or as to the actual size or terms of the Offering.

William Blair is acting as lead bookrunner and Canaccord Genuity is acting as joint bookrunner for the proposed Offering.

Vertical intends to use the net proceeds from the Offering to fund its research and development expenses as Vertical continues to develop the VX4 and its expenditures in the expansion of its testing and certification capacities, as well as for general working capital and other general corporate purposes.

The Company’s ordinary shares trade on the NYSE under the symbol “EVTL”. The offered warrants will not be listed on any exchange.

The proposed Offering will be made only by means of a preliminary prospectus supplement to the Company’s registration statement on Form F-3 (File No. 333-275430) previously filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 9, 2023 and declared effective by the SEC on November 16, 2023. Copies of the preliminary prospectus supplement relating to the proposed Offering may be obtained from the SEC’s website, or from: William Blair & Company, L.L.C., Attention: Prospectus Department, 150 North Riverside Plaza, Chicago, IL 60606, by telephone at (800) 621-0687, or by email at prospectus@williamblair.com; or Canaccord Genuity LLC, Attention: Syndication Department, One Post Office Square, Suite 3000, Boston, MA 02109, by telephone at (800) 225-6104, or by email at prospectus@cgf.com.

The final terms of the proposed public offering will be disclosed in a final prospectus supplement to be filed with the SEC. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Vertical Aerospace

Vertical Aerospace is a global aerospace and technology company pioneering electric aviation. Vertical is creating a safer, cleaner and quieter way to travel. Vertical’s VX4 is a piloted, four passenger, Electric Vertical Take-Off and Landing (eVTOL) aircraft, with zero operating emissions. Vertical combines partnering with leading aerospace companies, including GKN Aerospace, Honeywell and Leonardo, with developing its own proprietary battery and propeller technology to develop the world’s most advanced and safest eVTOL.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and views of future events. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements as contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any express or implied statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation, statements regarding the expected closing of and use of proceeds from the transaction, our future results of operations and financial position, our plans for capital expenditures, the design and manufacture of the VX4, our business strategy and plans and objectives of management for future operations, including the building and testing of our prototype aircrafts on timelines projected, certification and the commercialization of the VX4 and our ability to achieve regulatory certification of our aircraft product on any particular timeline or at all, expectations surrounding pre-orders and commitments, the features and capabilities of the VX4, the transition towards a net-zero emissions economy, as well as statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate,” “will,” “aim,” “potential,” “continue,” “are likely to” and similar statements of a future or forward-looking nature. Forward-looking statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: market conditions and satisfaction of customary closing conditions related to the Offering; our limited operating history without manufactured non-prototype aircraft or completed eVTOL aircraft customer order; our history of losses and the expectation to incur significant expenses and continuing losses for the foreseeable future; the market for eVTOL aircraft being in a relatively early stage; our potential inability to produce, certify or launch aircraft in the volumes or timelines projected; the potential inability to obtain the necessary certifications for production and operation within any projected timeline, or at all; any accidents or incidents involving eVTOL aircraft could harm our business; our dependence on partners and suppliers for the components in our aircraft and for operational needs; the potential that certain strategic partnerships may not materialize into long-term partnership arrangements; all of the pre-orders received are conditional and may be terminated at any time and any pre-delivery payments may be fully refundable upon certain specified dates; the inability for our aircraft to perform at the level we expect and may have potential defects; any potential failure to effectively manage our growth; our inability to recruit and retain senior management and other highly skilled personnel, our ability to raise additional funds when we need or want them, or at all, to fund our operations; our limited cash and cash equivalents and recurring losses from our operations raise significant doubt (or raise substantial doubt as contemplated by PCAOB standards) regarding our ability to continue as a going concern; the fact that we have previously identified material weaknesses in our internal controls over financial reporting which if we fail to properly remediate, could adversely affect our results of operations, investor confidence in us and the market price of our ordinary shares; the fact that as a foreign private issuer, we follow certain home country corporate governance rules, are not subject to U.S. proxy rules and are subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company; and the other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 20-F filed with the SEC on March 14, 2024, as such factors may be updated from time to time in our other filings with the SEC. Any forward-looking statements contained in this press release speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. We disclaim any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250122197067/en/

Enquiries please contact:

Vertical Aerospace Media

Justin Bates, Head of Communications

justin.bates@vertical-aerospace.com +44 7878 357 463

Investor Relations

Samuel Emden, Head of Investor Affairs

samuel.emden@vertical-aerospace.com +44 7816 459 904

Source: Vertical Aerospace

FAQ

What is the size of Vertical Aerospace's (EVTL) new public offering in 2023?

Vertical Aerospace announced a $75 million underwritten public offering of units, consisting of ordinary shares and warrants.

How will EVTL use the proceeds from its 2023 public offering?

The proceeds will fund R&D expenses for the VX4 development, expand testing and certification capabilities, and support general working capital needs.

What is the structure of EVTL's 2023 unit offering?

Each unit consists of one ordinary share, one-half of a Tranche A warrant, and one-half of a Tranche B warrant, with components issued separately.

Will the warrants from EVTL's 2023 offering be tradeable on an exchange?

No, the warrants offered in the public offering will not be listed on any exchange.

Who are the underwriters for EVTL's 2023 public offering?

William Blair is acting as lead bookrunner, and Canaccord Genuity is acting as joint bookrunner for the offering.