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Lilium Board approves application for self-administration of German subsidiaries Lilium GmbH and Lilium eAircraft GmbH

Lil­i­um has announced its prin­ci­pal Ger­man sub­sidiaries will apply for self-admin­is­tra­tion pro­ceed­ings in the next few days with the com­pe­tent court in the coun­try.

In an announce­ment released yes­ter­day (Thurs­day), this fol­lows a lengthy and com­plex gov­ern­ment approval process for a loan from KfW, which failed in the Bud­get Com­mit­tee of the Ger­man par­lia­ment. 

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.

The com­pa­ny was also unable to reach an agree­ment in prin­ci­ple with the Bavar­i­an gov­ern­ment to guar­an­tee a €50 mil­lion loan.

Direct­ly impact­ed by the fil­ing are Lil­i­um GmbH and Lil­i­um eAir­craft GmbH.  Lil­i­um said plans for affect­ed stake­hold­ers and the oper­a­tional imple­men­ta­tion of the nec­es­sary mea­sures will be shared in the com­ing days after the fil­ing and relat­ed pro­ce­dures have been launched.

Klaus Roewe, Lil­i­um CEO, said.“Our plan was to  obtain share­hold­er invest­ment in a new fund­ing round anchored by a Ger­man gov­ern­ment backed loan of €100 mil­lion. 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’s inter­na­tion­al com­pe­ti­tion is receiv­ing grants and loans in the USA, 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.

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. 

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.

This would be 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 USA, South Amer­i­ca, Europe, Asia, and the Mid­dle East.

Sup­port­ing the insol­ven­cy pro­ceed­ings is now the top pri­or­i­ty for Lil­i­um. Cus­tomers, employ­ees and sup­pli­ers will be noti­fied by the com­pa­ny as soon as pos­si­ble.

Self-admin­is­tra­tion, if and when grant­ed by the court, aims to pre­serve and con­tin­ue the busi­ness that is the sub­ject of the pro­ceed­ings.

Man­age­ment would retain con­trol and would con­tin­ue oper­at­ing the busi­ness under the super­vi­sion of a cus­to­di­an. The pro­ce­dure is often used to ini­ti­ate invest­ment by new par­ties or a process to sell the company’s assets and/or busi­ness as a whole.

In Ger­many, the pro­ce­dure is gen­er­al­ly per­ceived as pro­vid­ing an improved chance for a suc­cess­ful in-court busi­ness restruc­tur­ing. 

Roewe added: “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.

“We strong­ly believe that elec­tric fly­ing is our best hope for the decar­boniza­tion of avi­a­tion.”

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Jason Pritchard

Jason Pritchard is the Editor of eVTOL Insights. He holds a BA from Leicester's De Montfort University and has worked in Journalism and Public Relations for more than a decade. Outside of work, Jason enjoys playing and watching football and golf. He also has a keen interest in Ancient Egypt.

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