Lilium subsidiaries pursue self-administration as German government loan fails
German electric vertical take-off and landing (eVTOL) aircraft manufacturer Lilium recently announced that its principal German subsidiaries—Lilium GmbH and Lilium eAircraft GmbH—will apply for self-administration proceedings.
The decision follows the failure of a critical government-backed loan from Germany’s KfW to pass the country’s Budget Committee, ending a lengthy approval process.
Lilium CEO Klaus Roewe expressed disappointment and explained that the company’s strategy had relied on securing the KfW loan, which would have anchored a new funding round from shareholders.
“Our plan was to obtain shareholder investment in a new funding round anchored by a German government-backed loan of €100 million,” Roewe said.
“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.”
The loan was essential for Lilium to maintain investor confidence and secure future investments amid robust international competition in the rapidly evolving electric aviation landscape.
Competitors in the US, France, China, Brazil, and the UK are already receiving government grants and loans, adding pressure for similar support from the German government.
With the KfW loan withdrawn, Lilium stated that it had no alternative but to file for self-administration for its German subsidiaries.
Path to restructuring
The self-administration procedure, if approved, would allow the company to continue operations under its management team while a court-appointed custodian supervises.
According to Liliam, it is a path toward business restructuring and can attract new investors or lead to the sale of assets or the company as a whole.
Furthermore, the company was also pursuing a €219 million loan from the French government to fund a battery production facility and an assembly line in France’s southwest.
It has forecasted its Lilium Jet’s first flight for early 2025 and anticipates that pre-delivery payments and fresh investments will secure financing until 2026 when Lilium aims to begin deliveries.
Lilium’s current order pipeline consists of firm orders, reservations, and options for over 780 Lilium Jets with operators in regions including the US, South America, Europe, Asia, and the Middle East.
Currently, the company is prioritising communication with customers, employees, and suppliers regarding the insolvency proceedings.
Roewe expressed regret over the impact of the insolvency but remained hopeful about a future for the Lilium Jet.
“We deeply regret the insolvency and its consequences for all stakeholders at such a crucial stage of our company’s development,” he said.
“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.”
The company will disclose plans for affected stakeholders and necessary measures shortly after the filing.