Out Of Options, Lilium To File For Self-Administered Bankruptcy

Even before Lilium debuted its Lilium Jet in 2019, critics had doubted the merits of the aircraft’s architecture and whether the mission promised could be achieved. But while the company has made significant progress in development and was nearing first flight of a production-standard aircraft, it has now run out of time and money.

The company said in an Oct. 24 filing to the U.S. Securities and Exchange Commission (SEC) that its principal German subsidiaries Lilium and Lilium eAircraft “are overindebted and are or will be unable to pay their existing liabilities due within the next few days.” Management therefore has decided “to file for insolvency under German law and in doing so will apply for self-administration proceedings in Germany.” That move is expected “within the next few days.”

Insolvency in self-administration, unique to German bankruptcy law, allows corporate management to continue leading under the supervision of an administrator who is in charge of seeking buyers for the company as a whole or for its assets. In aviation, leisure carrier Condor is the latest example of a successful restructuring in self-administration. However, the application for self-administration must be approved by a court and could be rejected.

• German federal budget committee rejects loan guarantee
• No potential investors have emerged

Lilium now has to hope that an investor will buy the program out of insolvency. In the past, state-backed investors from Saudi Arabia and China have been named as potential candidates to step in should the company run out of money. However, even with insolvency an imminent threat, no sale has been achieved.

Lilium’s decision follows the German federal Parliament’s budget committee rejecting a proposed €50 million ($54 million) loan guarantee that would have been complemented by another €50 million from the Free State of Bavaria, where Lilium is based. The move was unexpected, as the federal government had previously thrown its support behind the company and Chancellor Olaf Scholz personally had assured Lilium CEO Klaus Roewe of his help.

“Despite its continuous and ongoing fundraising efforts, the company has not been able to raise sufficient additional funds to continue the operations of . . . the principal German affiliates,” Lilium stated in the SEC filing. Parent company Lilium N.V. is registered in the Netherlands and trading on the Nasdaq for now.

Volocopter, the other prominent German advanced air mobility (AAM) player, also had its loan guarantee rejected but has secured more funding from its shareholders.

The budget committee members asserted that it was not the German government’s job to bail out a company in the middle of a highly risky development program. The Greens, part of the ruling coalition, traditionally have been hesitant about support for aviation matters.

Lilium has secured about €1.4 billion in funding from private investors but has spent almost as much. Its shareholders had indicated they were willing to inject another €100 million, according to industry sources, but only with positive signals for government backing in parallel. The company repeatedly has complained that its competitors in the U.S. have received hundreds of millions of dollars in nonrepayable grants while Chinese AAM manufacturers are fully funded by the state.

Lilium also has received clearance in principle for a €220 million package from the French government should it build a production site in France—which has now become much more doubtful.

Lilium said in an Oct. 1 SEC filing that it needed fresh funds immediately. After the loan guarantee rejection, the company stated in an Oct. 17 filing that it was “continuing discussions with the Free State of Bavaria with respect to a guarantee of at least €50 million,” indicating its hope at that time that the state would increase its support to compensate for the lack of federal funding.

The first flight of the Lilium Jet had moved into early 2025, a milestone that had been planned for late 2024. The delay—lengthening to two years since the launch of the startup nine years ago—added to the company’s financial woes. Three aircraft are in various stages of construction.

The Lilium Jet has seven seats and is piloted. The company had ambitions to build larger electric aircraft in the future, plans that are now highly unlikely to materialize. Lilium would need to find substantial additional funding next year even with a successful restructuring in order to be able to continue development, flight testing and certification.