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.

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,

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.

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.

By Abhijith Ganapavaram (Reuters) -UK-based Vertical Aerospace and Mudrick Capital have signed a non-binding term sheet under which the investor will convert half of its outstanding convertible debt to equity and extend the repayment date on the remainder to December 2028,