Lilium, the German air taxi company known for its development of flying electric passenger drones, is facing insolvency as its two main subsidiaries are set to file for insolvency.
The company cited a lack of funding as the main reason for the impending insolvency filings. Lilium GmbH and Lilium eAircraft GmbH, the company's subsidiaries, have determined that they are "overindebted" and unable to meet their liabilities. They will seek insolvency under German law, including self-administration proceedings.
Lilium's financial troubles have been worsened by unsuccessful attempts to secure state support from the German federal government. The company's request for a convertible loan of 100 million euros, including 50 million euros in loans from the state, was rejected. Lilium also failed to reach an agreement with Bavarian officials for separate funding.
The implications of the subsidiaries' insolvency filings are significant, potentially leading to Lilium's delisting from the Nasdaq Global Select Market or the suspension of its shares. The market's reaction to this news has been severe, reflecting concerns about Lilium's financial health. The drop in share price highlights skepticism about the company's ability to overcome its challenges.
Lilium's struggles may serve as a cautionary tale for other startups in the air taxi industry. The outcome of the insolvency process will not only impact Lilium's operations but also have broader implications for the air mobility market.