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We recently announced an agreement with Global Emerging Markets (GEM) whereby GEM has committed a $200 million share subscription facility that will be made available upon HAV’s listing. This means HAV will have the option to sell shares to GEM in the future. This is HAV’s first major institutional funding commitment. These funds will be available for drawdown at HAV’s option over a three-year period. At the time of listing HAV will issue GEM 0.75% of the common stock of the company at par value.
This commitment to a future transaction is crucial to HAV’s plans for the near future in several ways:
Flexibility in meeting customer needs
Airlander is a leader in a new generation of aircraft that will unlock new options for mobility, travel, logistics and surveillance roles. As with other types of transportation, our customers are looking for greater flexibility in how they operate and finance aircraft – not every customer wants to hold aircraft on their balance sheet. The commitment from GEM will allow HAV to hold Airlander aircraft on our own balance sheet, giving us the ability to offer our customers lease, charter and service provision options from the very first aircraft to be delivered. You can find out more about our customers options here. We are delighted to be able to offer this level of flexibility to our customers, supporting how they access and finance Airlander.
Diversification through vertical integration
The ability to offer new Airlander ownership and finance options sees HAV become a more vertically integrated business. Our offering is now much deeper than that of just an aircraft manufacturer.
This depth, combined with our growing partnerships portfolio, like those with 2Excel Aviation and Vertex Aerospace, ensures we can offer our customers the full spectrum of support that they need to bring Airlander to market. This includes aircraft finance, service provision, maintenance, repair and overhaul. This will ensure the smooth adoption of Airlander technology.
Confirming our intention to go public
This recent announcement also confirms HAV’s plan to list via an Initial Public Offering (IPO) or merger with a Special Purchase Acquisition Company (SPAC), expected to be in the US.
While either IPO or SPAC route is possible, SPACs are of great interest to us having already helped a number of comparatively earlier stage eVTOL (electric Vertical Takeoff and Landing aircraft – also known as “air taxis” or Urban Air Mobility), space and electric vehicle companies to list. SPACs are solving a current failure in the venture capital market, where capital intensive businesses with longer lead-in times to revenue and profitability are seen as less attractive despite strong future profitability and high barriers to entry. The SPAC community also has an increased focus on sustainability, so Airlander’s ability to deliver a 90% reduction in emissions in the near term and 100% by 2030 puts HAV in an attractive place in the market.
Several eVTOL businesses have announced mergers with SPACs in the first half of this year. This demonstrates investor confidence in the Urban Air Mobility market, particularly at lower passenger volumes (2-7 seats). Inter-city transport represents 40% of the forecast Urban Air Mobility market by 2050, equivalent to $36bn, according to research performed by Roland Berger. Airlander 10 offers inter-city connections at a much larger scale with the ability to transport up to 100 people over a range of up to 750km, with a lower cost per seat.
Airlander’s ability to take off and land from virtually any flat surface, including grass and water, and its quieter operations means that, like the smaller eVTOL aircraft, it disrupts the current highly consolidated network model for air travel. Having already flown a full-scale prototype and holding our Design and Production Organisation Approvals, the path to Type Certification for Airlander 10 is well understood and significant progress has already been made. The fact that Airlander has applications across a number of sectors and a large total addressable market further enhances HAV's position and attractiveness to the SPAC market.
GEM’s commitment to invest $200 million post-listing marks a critical step in HAV’s readiness to launch the Airlander 10 production programme. We are now in a position to provide a more diversified offer to customers and push forward towards listing.