(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.

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.

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,