Munich-based Lilium, the developer of the first all-electric vertical take-off and landing (“eVTOL”) aircraft, announced that is planning to apply for self-administration proceedings in a German court for its main subsidiaries.
The announcement comes after the government approval process for a loan from KfW, which failed in the Budget Committee of the German parliament.
“Our plan was to obtain shareholder investment in a new funding round anchored by a German government-backed loan of €100M,” Lilium CEO Klaus Roewe says. “We had already conditionally secured additional private capital to complement the KfW loan. However, the Budget Committee was unable to agree on the loan and Bavaria couldn’t do it alone.”
As a result, the stock dropped 61 per cent to about 20 cents per share, hitting a new 52-week low. At the time of writing this article, the company’s share stands at $0.21.
Lilium’s bankruptcy: Failed to raise funds
According to the US SEC filing, the Munich company has been actively seeking additional funding from various sources, including the German government.
It includes Lilium‘s advanced discussions regarding a French government guarantee of a €219M loan to finance a battery factory and an assembly line in the Southwest of France.
Following the planned first flight of the Lilium Jet in early 2025, Lilium expects to receive pre-delivery payments and new investments to finance the company into 2026.
However, on October 17, 2024, the company received an indication that the budget committee of the German parliament is unlikely to approve a €50M guarantee for a proposed €100M convertible loan from KfW.
Additionally, as of this report’s date, Lilium has not reached an agreement with the Free State of Bavaria regarding a guarantee of at least €50 million.
Due to insufficient funds to support its main subsidiaries — Lilium GmbH and Lilium eAircraft GmbH, the managing directors have decided that they are overindebted and may soon be unable to meet their financial obligations.
As a result, they will file for insolvency under German law and apply for self-administration proceedings.
“We deeply regret the insolvency and its consequences for all stakeholders at such a crucial stage of our company’s development,” CEO Klaus Roewe says. “However, while there is no guarantee for success in insolvency proceedings, we hope that the Lilium Jet will get a chance for a fresh start after the self-administration process is completed.”
“We strongly believe that electric flying is our best hope for the decarbonisation of aviation,” Klaus Roewe adds.
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