Air-taxi maker Lilium to file for insolvency after failed fundraising efforts (updated)

Lilium NV

04/11/2024 15:24

(Adds stock movement, details and background throughout)
    By Abhijith Ganapavaram
       Nov 4 (Reuters) - German air-taxi maker Lilium  5KD.F 
said on Monday it would file for insolvency "soon", after
efforts to solve its cash-crisis failed to yield results.
    The move highlights the difficulties faced by startup
aviation firms in an industry that is capital intensive and has
high entry barriers.
    It also comes as air-taxi makers navigate challenges in
developing batteries powerful enough for their aircraft and
convincing the public of their safety, even as they deal with an
evolving regulatory environment.
    Lilium was one of the few electric vertical take-off and
landing (eVTOL) makers that debuted on stock exchanges in the
U.S. earlier this decade following multi-billion dollar mergers
with blank-check firms.
    EVTOLs are seeking to revolutionize urban travel by
developing battery-powered aircraft that can take off and land
vertically.
    U.S.-listed shares  LILM.O  Lilium, which received a
delisting notice from Nasdaq last week, were down 8.8% in
morning trading.
    Founded in 2015, Lilium sought to target the regional
transport market with a 250 kilometer-range (155 miles) jet that
can carry up to six passengers, unlike many rivals, which are
mainly looking at shorter trips between cities and suburbs.
    However, the company ran into hurdles raising cash as it was
developing aircraft that are yet to receive approval to carry
passengers.
    Last month, two of its subsidiaries in Germany decided to
file for insolvency following unsuccessful talks with state and
federal governments to raise more money to keep them afloat.
    At that time, Lilium had said it was reviewing whether there
were grounds for its own insolvency as well.
    "Financing and other strategic alternative options have been
pursued without success and it has become apparent that funding
for the company is not feasible," Lilium said in a securities
filing on Monday.
    

 (Reporting by Abhijith Ganapavaram in Bengaluru; Editing by
Shilpi Majumdar)
 ((Email: Abhijith.G@thomsonreuters.com; Mobile:
+91-9019785574;))