Lilium NV, the US Nasdaq-listed parent company of Lilium’s German subsidiaries, has warned it may need to file for insolvency as the subsidiaries are set to file for self-administration under German law due to overindebtedness and insufficient funds for operations.
The company’s financial struggles were exacerbated by the German parliament’s refusal to approve a €50m guarantee for a convertible loan, leading to Lilium’s inability to secure vital funding necessary for their continued operations.
Lilium faces significant international competition for funding and emphasised the necessity of German government support to maintain investor confidence, as the absence of such backing forced the subsidiaries to resort to insolvency proceedings.
The potential filing for insolvency and self-administration may result in the delisting or suspension of Lilium’s shares on the Nasdaq, further jeopardizing the value of shareholders’ investments, while the company’s anticipated first manned flight of its eVTOL aircraft has been postponed to early 2025.
Lilium GmbH was founded in 2015 by four engineers from the Technical University of Munich, aiming to develop electric air taxis, and debuted its unmanned two-seat prototype, the Lilium Eagle, in April 2017.
The five-seat Lilium Jet prototype first flew in May 2019, featuring 36 electrically powered propellers for vertical takeoff and horizontal flight, with plans to launch an air taxi service by 2025.
The company has faced financial challenges, reporting significant losses and needing funding to cover operational costs, despite securing partnerships and completing a SPAC merger to go public in September 2021.
Controversies regarding Lilium’s aircraft performance and development challenges have emerged, with reports from former employees and experts questioning the feasibility of its goals and technology.
