German air-taxi maker Lilium's units to file for insolvency, shares plunge

Lilium NV

24/10/2024 19:19

Oct 24 (Reuters) - German air-taxi developer Lilium
 5KD.F  said on Thursday two of its subsidiaries in the country
have decided to file for insolvency following unsuccessful talks
with state and federal governments to solve its cash crisis.
    The company's U.S.-listed shares fell 57% to 23 cents after
the subsidiaries - Lilium GmbH and Lilium eAircraft GmbH - told
the parent they are over-indebted and will be unable to pay
debts over the coming days.
    Lilium is now "reviewing whether there are grounds for its
own insolvency as well," it said in a regulatory filing.
    The company, among a handful of air-taxi makers that are
seeking to upend urban travel, was staring at a cash crunch as
it is still developing aircraft that is yet to receive approval
to carry passengers.
    Lilium had asked the German federal government to guarantee
50 million euros ($54 million) of a contemplated 100 million
euro convertible loan from KfW, the German state-owned
development bank.
    But the company received indications that the federal
government would not approve it, Lilium said. Talks with
Bavaria, where Lilium is based, for guarantee of at least 50
million euros have not yielded an agreement so far.
    The filing for insolvency in Germany could result in the
company's ordinary shares being delisted from the Nasdaq, or
having its shares suspended, Lilium said.
    Founded in 2015, Lilium is targeting 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.
        
($1 = 0.9240 euros)

 (Reporting by Abhijith Ganapavaram in Bengaluru; Editing by
Maju Samuel)
 ((Abhijith.G@thomsonreuters.com | https://x.com/abhijithg4;
+91-9019785574;))