A flying taxi venture backed by the millionaire founder of Ovo Energy is scrambling to avoid collapse as it battles a severe cash crunch.
Vertical Aerospace has hired restructuring experts in a last-ditch attempt to salvage the business, with the board believed to be drawing up contingency plans amid growing concerns about its survival prospects.
The Bristol-based company, which employs around 300 people, has been plunged into crisis after Stephen Fitzpatrick, its founder, reneged on a promise to inject $25m (£19m) into the business over the summer.
This has since prompted its largest creditor, US-based Mudrick Capital, to propose a $75m (£58m) lifeline for Vertical, while the board has also drafted in advisers at FRP and Teneo to hammer out a possible rescue deal.
However, Mr Fitzpatrick – who owns a 69pc stake in the start-up and has powers to overrule the board – is understood to be reluctant to wave through the deal amid fears it would lead to him losing control.
Vertical Aerospace, which was founded by the Ovo tycoon in 2016 and is listed on the New York Stock Exchange, has racked up tens of millions of pounds in losses over recent years.
As well as putting jobs at risk, the company’s prospective failure would also cost the taxpayer, after Vertical received £37m in government grants since its launch.
This includes £4m received this year alone, which was paid by the former Tory government despite the company warning repeatedly about its future.
Its recent struggles have led to the company losing almost the entirety of its value since its £2.2bn listing in the US three years ago. It is now worth just $95m.
In its latest update to investors in September, bosses warned its shrinking £48m cash pile could disappear by early next year, sparking a breach of its loan agreements.
At the time, it also said a “special committee” had been set up to seek emergency funding after Mr Fitzpatrick failed to fulfil a $25m instalment pledge in August.
It added: “We currently project that our existing resources will only be sufficient to fund our ongoing operations into the second quarter of 2025.
“The dependency on raising additional capital indicates that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern.”
The company’s cash crunch also raises questions for Stuart Simpson, its chief executive, who just last week said Vertical Aerospace was the “only credible European player in this space”.
He also hailed the role of Mr Fitzpatrick, who he said “has been absolutely exemplary” and is “wonderful to work with”. Mr Simpson replaced Mr Fitzpatrick as the company’s chief executive in May.
