Lilium to conduct insolvency proceedings under self-administration & seeks investors

A few days after the electric flying taxi developer Lilium filed for insolvency, Weilheim Local Court has authorised restructuring under self-administration. This is only likely to succeed if Lilium finds new investors - and KPMG is now looking for them for Lilium.

Lilium endeavoured for a long time to obtain state aid in Germany. However, it has been clear since mid-October that neither the federal government nor the Free State of Bavaria will provide any funds. As a result, Lilium filed for insolvency for two of its companies last week in the hope that it would be able to carry this out under self-administration. And this is exactly what the Weilheim district court has now authorised. The aim of self-administration is to preserve and continue the company. The management remains in charge and leads the company through the process with the support of restructuring experts.

The debtor-in-possession reorganisation comes at a time when the first two Lilium jets, an electric vertical take-off aircraft with seven seats, are in final assembly. The fuselage and wings of the third aircraft are currently being assembled by aircraft manufacturers Aciturri and Aernnova. The company’s current order pipeline consists of firm orders, reservations, options and letters of intent for more than 780 Lilium jets for operators in the US, South America, Europe, Asia and the Middle East.

Work continues accordingly at Lilium’s subsidiaries and the more than 1,000 employees committed to the programme’s next major milestone, the first manned flight, have been informed of the details of the pay freeze. The company has also informed the affected suppliers and outlined expectations and procedural steps.

The court has appointed two lawyers with restructuring experience, Prof Dr Gerrit Hölzle and Dr Thorsten Bieg, as Chief Insolvency Officers (CIOs) to the management boards of the German subsidiaries with immediate effect. Both have already successfully advised a large number of companies in crisis situations. Most recently, they worked for Senvion and The Social Chain AG, among others. They will now oversee the reorganisation of Lilium’s German subsidiaries.

The Weilheim Local Court has also appointed lawyer Ivo-Meinert Willrodt, managing partner of Pluta Rechtsanwalts GmbH, as provisional administrator. The restructuring expert is a lawyer specialising in insolvency and restructuring law and has already acted as trustee for the solar car start-up Sono Motors and the drone manufacturer EMT, among others. His task is to protect the interests of creditors in the proceedings.

Lilium CEO Klaus Roewe welcomed the appointments: “With the support of our appointed trustee and restructuring experts, we at Lilium remain fully focused on re-emerging from restructuring with new investment to support the journey of the all-electric Lilium Jet through to certification and commissioning.”

Lilium has also called in the business consultancy KPMG. They are to look for buyers or investors for Lilium. Even though Lilium now feels like it is close to the finish line with the construction of its first aircraft, investors have already pumped 1.5 billion euros into the start-up, which was founded in 2015. They had recently hesitated to add more, which is why Lilium had hoped for state aid.

lilium.com, handelsblatt.com, arriva.de (all in German)