June 23, 2021
Clifford Chance advises Avolon on world's largest eVTOL aircraft order
London, New York: A cross-border team has advised Avolon, the international aircraft leasing company, with respect to its ground-breaking aircraft order with Vertical Aerospace Ltd. (Vertical), an electric vertical take-off and landing aircraft (eVTOL) manufacturer.
Avolon, through newly incorporated affiliate Avolon-e, will become a customer for eVTOL aircraft manufactured by Vertical and, subject to certain conditions, has ordered aircraft valued at US$1.25 billion with delivery commencing in late 2024, and with an option to acquire additional aircraft up to a value of US$750 million. Vertical has also announced pre-orders and pre-order options from American Airlines and Virgin Atlantic which, together with Avolon-e's pre-orders and pre-order options, are valued at up to US$4 billion.
The transaction will combine Avolon’s scale and deep industry relationships with Vertical’s leading technological position in the eVTOL space, and will see both companies collaborate throughout the development, roadmap to certification and subsequent commercial roll-out of the aircraft.
Avolon joins Microsoft, Rolls-Royce, Honeywell, and American Airlines as equity investors in Vertical, by way of a private investment in public equity (PIPE). Vertical will be listed on the New York Stock Exchange following a special purpose acquisition company (SPAC) merger with Broadstone Acquisition Corp. The SPAC merger is expected to complete in the second half of 2021.
In addition to its PIPE investment in Vertical, Avolon will be issued warrants entitling Avolon to subscribe for further shares in Vertical upon certain pre-conditions being met.
This matter was led by London-based partners Oliver Hipperson and Nicholas Rees, supported by senior associate Ashley Cywicki, and partners Andrew Epstein and Anthony Candido, counsel Matthew Warner, and associate Hanah Kim in New York.