Flying taxi start-up founder loses control to US hedge fund

Stephen Fitzpatrick, the Ovo Energy tycoon, has lost control of Vertical Aerospace as part of an emergency refinancing deal to rescue the flying taxi start-up.
Jason Mudrick, a New York-based hedge fund investor, has exercised convertible loans to take a 70 per cent stake in the Bristol-based developer of electric vertical take-off and landing aircraft.
Fitzpatrick, 47, who founded Vertical in 2015 and who has been funding the venture, had previously held a 70 per cent controlling stake in the business. He has now been diluted to just 20 per cent.
Mudrick, 49, had lent Vertical $260 million in convertible loans in 2021 when it was struggling to raise capital before what became a runaway $2 billion flotation on the US Nasdaq exchange, reversing into a special purpose acquisition vehicle or so-called blank cheque company.
After setbacks including the crash of an uncrewed prototype during testing at Kemble airport in the Cotswolds and then the withdrawal from the venture of Rolls-Royce, Vertical’s market value has collapsed to below $100 million. With cash reserves down to just $57 million at the end of September, Vertical was forced to open funding negotiations with Mudrick.
The hedge fund manager has converted $130 million of his loans into a 70 per cent equity stake and committed up to $50 million in equity to see the company through the next 12 months. News of the deal sent shares in Vertical up 45.5 per cent, or $2.18, to close at $6.97, in New York on Monday, valuing the company at $133.2 million.
Fitzpatrick said of the deal: “For me personally it is disappointing but for the company it is a very positive validation of the technology and our amazing team. I have no doubt we will become a global leader in the electric aviation sector which has been through challenging times. Now we have simplified our balance sheet, Vertical is a very attractive investment opportunity.”
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Vertical believes it will now be able to attract other equity investors to back its VX4, eight-rotor, battery-powered, four-seater aircraft, which is designed to fly at 150mph with a range of 100 miles, and make good its promise to go into production after it receives Civil Aviation Authority certification now re-scheduled for 2028.
The company plans to run public demonstration flights next year from a “vertiport”, a specially constructed take-off, landing and recharging station, under construction near Bicester in Oxfordshire.
A recent investment strategy document claimed Vertical was aiming to deliver 150 VX4s by the end of 2030, when production will be running pro rata at 200 per annum. Airlines including Virgin Atlantic have signed up to a 1,500-strong order book.
Virgin aims to use the VX4 to ferry wealthier passengers to Heathrow. Other applications for the VX4, which is envisaged as replacement for noisy and gas-guzzling helicopters, include city-to-city hops and tourism in areas without suitable transport infrastructure.