It has been confirmed by electric vehicle takeoff and landing (eVTOL) aircraft developer Lilium that two of its principal subsidiaries will file for insolvency and apply for self-administration proceedings in Germany.
The announcement came on October 24, 2024, in a SEC filing in which the parent company Lilium N.V. spelled out the dire situation for its units Lilium GmbH and Lilium eAircraft GmbH.
Lilium declared that fundraising efforts had failed after the German government refused to approve a loan from state-owned development bank KfW for €100 million ($108 million).
“Our plan was to obtain shareholder investment in a new funding round anchored by a German government-backed loan of €100 million,” Lilium CEO Klaus Roewe said. “We had already conditionally secured additional private capital to complement the KfW loan.”
German government support of the KfW loan was a closing condition to already committed private funding and without this support Lilium was left with no alternative but to cause the principal German subsidiaries to file for self-administration.
Lilium also failed to reach an agreement for at least €50 million with the Free State of Bavaria, according to the SEC filing.
In a statement, Lilium said that it was also in advanced discussions regarding a French government guarantee of a €219 million ($237 million) loan to finance a battery factory and assembly line in the Southwest of France, but it seems that this did not bear fruit either.
Lilium GmbH and Lilium eAircraft GmbH have “determined that they are overindebted and are or will become unable to pay their existing liabilities due within the next few days”.
Lilium N.V is now reviewing whether there are grounds for its own insolvency.
Self-administration proceedings typically aim to preserve and continue the business that is in financial distress.
The self-administration procedure is also used to initiate a new investor process, “aimed at creating the maximum outcome for the creditors of the debtor”.
Roewe said: “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.”
Other eVTOL developers have received grants and loans from the countries where they are based, such as the United States, France, China, Brazil and the UK.
German government support was seen by Lilium investors as critical in order to retain market confidence and potential future investment.
Following the Lilium Jet’s planned first flight in early 2025, the developer anticipated receiving pre-delivery payments and new investment to finance the company into 2026. The company then expected that delivery would begin on its current order pipeline, consisting of firm orders, reservations, options and memorandums of understanding for more than 780 aircraft.