Lilium reveals that German subsidiaries as insolvent

The air taxi developer announced the intended insolvency of Lilium GmbH and Lilium eAircraft GmbH in a notification to the US Securities and Exchange Commission (SEC) on Thursday. Lilium writes that it is not in a position to raise sufficient additional funds to continue the operations of its subsidiaries – “despite continuous and ongoing fundraising efforts.” The companies are “over-indebted and not in a position to settle their due liabilities within the next few days.”

Lilium intends to submit the insolvency applications to the Weilheim district court, which is responsible for the company’s location in Oberpfaffenhofen. However, it is not clear whether the applications will be granted. According to Lilium, it hopes to be able to go through the insolvency proceedings in self-administration. In the SEC announcement, the company explains that this option under German insolvency law is “generally aimed at preserving and continuing the company.” In this context, the German business publication Handelsblatt quotes a company spokesperson as saying: “After all, the application is not yet a death sentence. The proceedings give us time.”

Lilium intends to use this time to find further sources of financing. According to the SEC announcement, the sale of parts of the company is also conceivable. Meanwhile, the e-taxi developer does not specify how heavily indebted the German subsidiaries are. However, Handelsblatt writes that Lilium still had around 109 million euros in cash at the end of June. Without new revenue, however, this sum is likely to be almost exhausted. This is because Lilium spent 190 million euros in the first half of 2024.

Lilium endeavoured to obtain state aid in Germany for a long time. However, it has been clear since last week that neither the federal government nor the state of Bavaria will provide any funding. During the protracted decision-making phase, the company threatened a few weeks ago to consider leaving Germany. With the impending insolvency of the German subsidiaries, this scenario could materialise – should there still be a future for Lilium. This is not a matter of course. Because: “We are in the process of analysing the possible effects of the insolvency proceedings of the subsidiaries on Lilium N.V.. The management is constantly analysing whether there are also grounds for Lilium N.V. to file for insolvency and the result of such an analysis may be that Lilium N.V. also files for regular insolvency proceedings,” the company writes.

As the parent company, Lilium N.V. is listed on the US stock exchange. It is responsible for the development of the Lilium Jet. The company launched small series production of the electric flying taxi in 2023. With the commercialisation of the Lilium Jet planned for 2026, the company has been preparing for larger-scale production for some time. According to information from the spring, Lilium has an order pipeline of more than 780 Lilium Jets, including binding orders and letters of intent from operators in the United States, South America, Europe, Asia and the Middle East.

So far, Lilium has been financed exclusively privately. Its backers include Tencent, Atomico, LGT Bank, Baillie Gifford, Palantir and Honeywell. According to Handelsblatt, investors have borne losses totalling 1.46 billion euros since Lilium was founded. With regard to the stock market, the company is now warning that “the filing for insolvency and self-administration in Germany could result in the company’s common stock being delisted from the Nasdaq Global Select Market or suspended from trading on Nasdaq.” In response to this warning, Lilium shares fell sharply on Thursday.

handelsblatt.com, investors.lilium.com (stock announcement)