Lilium officially files for insolvency
The air taxi developer first announced its intention to file for insolvency for Lilium GmbH and Lilium eAircraft GmbH on Thursday in a notification to the US Securities and Exchange Commission (SEC). Lilium is now informing its investors that the company’s management filed for insolvency on 28 October. According to the German publication Handelsblatt, this means that more than 1,000 employees at the administrative headquarters in Gauting and at the special airport in Oberpfaffenhofen near Munich now have to fear for their jobs. Potentially around 1.5 billion euros in investor funds have been lost.
Last Thursday, Lilium wrote that it was not in a position to raise sufficient additional funds to continue operating the subsidiaries – “despite continuous and ongoing fundraising efforts.” The limited liability companies are “over-indebted […] and will not be able to pay their liabilities as they fall due within the next few days.”
Lilium has filed the insolvency petitions with the Weilheim district court, which is responsible for the company’s Oberpfaffenhofen site. 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 on Thursday, the company explained that this option under German insolvency law ‘is generally aimed at preserving and continuing the company’. In this context, Handelsblatt quoted a company spokesperson last week as saying: “After all, the application is not yet a death sentence. The proceedings will buy us time.”
Lilium endeavoured to obtain state aid in Germany for a long time. However, it has been clear since mid-October that neither the federal government nor the Free State of Bavaria will provide any funds. The Handelsblatt now writes that in the event of a positive decision on state aid, the existing investors would also have injected 32 million euros in fresh money. However, this hope vanished into thin air when the Bundestag’s budget committee voted in favour.
A few weeks ago, during the protracted decision-making phase regarding state aid, Lilium threatened to leave Germany. With the insolvency of the German subsidiaries, this scenario could materialise – should there still be a future for Lilium. This is not a matter of course. The parent company Lilium N.V, which is listed on the US stock exchange, is also in financial difficulties. And the company’s shares, which were already under pressure, have lost another three-quarters of their value since Thursday alone. Their price is now only in the cent range.
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