Lilium woes show no sign of abating as insolvency looms
October 24, 2024
German air taxi startup Lilium saw its shares plunge on Thursday as two of its main subsidiaries look to file for insolvency.
Despite Lilium’s chief commercial officer Sebastian Borel expressing optimism about the company’s’ future amid its ongoing cash crisis at this year’s NBAA-BACE, shares in the company plummeted on Thursday. This decline followed the air taxi firm’s announcement in a US regulatory filing that its two main subsidiaries are to file for insolvency in the coming days.
Lilium’s shares plunged more than 60% on Thursday before recovering slightly following the news that the company had failed to raise sufficient additional funds to continue the operations of its two main subsidiaries: Lilium GmbH and Lilium eAircraft GmbH.
The filing stated that the management of the subsidiaries “determined that they overindebted… and are or will become unable to pay their existing liabilities… within the next few days.” Subsequently, they have informed the company they “have to file for insolvency under German law and in doing so will apply for self-administration proceedings in Germany.”
Earlier this week, Lilium failed to raise additional funds through a combined loan worth €100 million. The German federal government rejected a request to supply the company with €50 million in state support to match a similar guarantee already received by the state of Bavaria (which was also subsequently called into doubt).
Responding to the news, Iceberg Research, a financial analysis firm specialising in short selling, also released a report accusing Lilium of being “a fraud” and “adopting a bold PR strategy” that misrepresented its progress towards commercialisation.
While Lilium has previously suggested that a move within Europe could be on the cards, the filing for insolvency and application for self-administration in Germany could result in the company being delisted from the Nasdaq Global Select Market.
