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.

(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, the air-taxi maker said.

Vertical Aerospace has unveiled a new provisional funding agreement involving a $130 million 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,

The rescue deal comes at a crucial moment for Vertical, which has been burning through cash to bring its VX4 aircraft to market.

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 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.