Despite multiple fundraising efforts, management of Lilium GmbH and Lilium eAircraft GmbH, Lilium’s principal operating wholly owned German subsidiaries, will file for insolvency under German law and in doing so will apply for self-administration proceedings in the country.
This follows a lengthy government approval process for a loan from KfW, which failed in the budget committee of the German parliament.
“Lilium’s international competition is receiving grants and loans in the US, France, China, Brazil, and the UK. Therefore, German government support was seen by Lilium investors as critical to retain market confidence and potential future investment,” said the company in a statement.
In a filing to the US Securities and Exchange Commission (SEC) on October 24, 2024, Lilium stated: “The company expects that the subsidiaries will file for insolvency in the competent court in Germany and apply for self-administration proceeding pursuant to Section 270(a) of the German Insolvency Code. However, there can be no assurances that the applications for self-administration proceedings will be approved by the court.”
“Our plan was to obtain shareholder investment in a new funding round anchored by a German government backed loan of €100 million,” said Klaus Roewe, CEO of Lilium. “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.”
Lilium was also in advanced discussions regarding a French government guarantee of a €219 million ($236.9 million) loan to finance a battery factory and an assembly line in the Southwest of France.
Following the Lilium Jet’s planned first flight in early 2025, Lilium anticipated receiving pre-delivery payments and new investment to finance the company into 2026 when the company expected delivery would begin on its current order pipeline consisting of firm orders, reservations, options, and memoranda of understanding for more than 780 Lilium Jets to operators in the US, South America, Europe, Asia, and the Middle East.
Roewe continued: “We deeply regret the insolvency and its consequences for all stakeholders at such a crucial stage of our company’s development. 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.”
Plans for affected stakeholders and the operational implementation of the necessary measures are expected after the filing and related procedures have been launched.