Lilium, the German developer of electric flying taxis, has officially filed for insolvency for its two key subsidiaries, Lilium GmbH and Lilium eAircraft GmbH. The application for self-administration proceedings was submitted to the Weilheim Local Court on October 28, following the company’s announcement of its intention to file earlier in the week.
In a notification to the US Securities and Exchange Commission (SEC) on Thursday, Lilium indicated that it was unable to secure sufficient additional funding to sustain operations. The company cited that both subsidiaries are “over-indebted” and “will not be able to pay their liabilities as they fall due within the next few days.” This insolvency filing impacts over 1,000 employees at Lilium’s administrative headquarters in Gauting and its specialized airport in Oberpfaffenhofen, near Munich. It is estimated that approximately 1.5 billion euros in investor funds may be lost as a result.
Lilium hopes to navigate the insolvency process through self-administration, which is designed under German law to preserve and continue company operations. A company spokesperson noted that the application for insolvency “is not yet a death sentence,” and that the proceedings may buy them valuable time.
The air taxi developer has been seeking state aid in Germany for some time, but as of mid-October, it became clear that neither the federal government nor the Free State of Bavaria would provide financial support. Despite previous discussions that could have led to a 32 million euro cash infusion from existing investors contingent on state aid, hopes were dashed following a vote by the Bundestag’s budget committee.
Lilium has previously hinted at relocating operations outside Germany amid delays in securing aid, and the current insolvency of its German subsidiaries raises questions about the company’s future. Compounding its challenges, Lilium N.V., the parent company listed on the US stock exchange, is also facing financial difficulties, with its shares plummeting to the cent range, losing three-quarters of their value since the announcement of the insolvency.
