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Lilium runs out of cash

Lilium runs out of cash

Business news |
By Nick Flaherty

Cette publication existe aussi en Français


European electric aircraft developer Lilium is entering administration after its fundraising collapsed.

Lilium had been looking to raise up to €200m from the German federal and Bavarian governments, which was turned down last week. It was also raising €219m from the French government for a battery factory.

“Despite its continuous and ongoing fundraising efforts, the company (Lilium NV) has not been able to raise sufficient additional funds to continue the operations of Lilium and Lilium eAircraft, Lilium’s principal operating wholly-owned German subsidiaries,” it said in a filing in the US.

As a result the subsidiaries are planning to apply for self administration in the German courts in the next few days. This would see the company continue under the supervision of a custodian.

“The managing directors of such subsidiaries have determined that they are overindebted (Überschuldung) and are or will become unable to pay their existing liabilities due (Zahlungsunfähigkeit) within the next few days.”

The company had raised $1.4bn, including $25m last year. It powered up its 16 seater electric aircraft earlier in the month. It saw the maiden flight of its prototype in May 2019 and planned its first flight in early 2025 which would unlock pre-delivery payments and new investment to finance the company into 2026. It has orders and agreements for 780 electric aircraft.

German eVTOL pioneer Lilium raises another $250m in a bid to survive

“We are in the process of analyzing the potential implications for the Company resulting from the insolvency proceedings of the Subsidiaries. This includes examining whether obligations exist under applicable insolvency law. The management of Lilium NV is continuously reviewing whether there are grounds for its own insolvency as well and the result of any such review may be that Lilium NV files for regular insolvency proceedings as well.”

Within the next few days, the Company expects that the Subsidiaries will file for insolvency in the competent court in Germany and apply for self-administration. However, there can be no assurances that the applications for self-administration proceedings will be approved by the court.”

Like Chapter 11 in the US, this will give the company protection from creditors for a limited time to arrange a rescue deal. If that fails, the assets will be sold off.

The company pointed to financial support for competing eVTOL airtaxi designs in US, France, China, Brazil, and the UK.

“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.  

Lilium was also in advanced discussions regarding a French government guarantee of a €219 million loan to finance a battery factory and an assembly line in the Southwest of France. 

“We deeply regret the insolvency and its consequences for all stakeholders at such a crucial stage of our company’s development,” said Roewe. “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.”

www.lilium.com

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