eVTOL aircraft developer Lilium has filed for administration in Germany after an application for €100 million (US$108 million) in government loans was refused.
Speculation about Lilium’s financial challenges has been rife since the company applied to the German Federal and local Bavarian state Governments for the loans, alongside a warning it was running out of cash. Fears for the company’s future grow further when the loan application was refused last week.
Lilium is structured in a way that lists the company on the USA’s NASDAQ stock market with two subsidiaries, Lilium GmbH and Lilium eAircraft GmbH, based in Germany, while the headquarters of the parent company is in the Netherlands. News of the administration therefore first emerged in the form of a SEC (Securities and Exchange Commission) filing made in the USA yesterday.
Company bosses then confirmed that the subsidiary businesses would be entering self-administration in a statement which blames the German Government. Lilium CEO Klaus Roewe said, “Our plan was to obtain shareholder investment in a new funding round anchored by a German government backed loan of €100 million.
“We had already conditionally secured additional private capital to complement the loan. However, the Budget Committee was unable to agree on the loan and Bavaria couldn’t do it alone.”
The statement also labels the loans as “critical to retain market confidence” and points out that its international competitors are receiving grants and loans in the USA, France, China, Brazil, and the UK.
Testing progress
Lilium, which was founded in 2015 has flown several prototypes and models and conducted years of ground testing for its Jet aircraft’s systems.
Most recently the company has been building its first two full scale test aircraft of six, with a maiden flight planned for early 2025 and certification and entry into service the year after.
As Lilium’s chief technical officer Stephen Vellacott told Aerospace Testing International in an interview in July, the first test aircraft MSN1 was to be used as an iron bird. That aircraft was powered on as planned at the start of this month for systems integration testing.
Production of a third test aircraft was expected to start before the end of this year. The company has also recently built a 26,000 square foot certification testing facility near its headquarters in Munich.
Lilium has also been in discussions with the French government for a €219 million (US$285 million) loan to finance a battery factory and assembly line in the Southwest of France.
Propulsion system
The five-seat Jet aircraft, which is intended for the regional market, uses a distributed electric propulsion system with ducted fans integrated into the wing and canard surfaces. The propulsion system and the company’s predictions for the performance of its inhouse battery pack had drawn scepticism from industry experts who saw the approach as too radical.
Lilium said that supporting insolvency proceedings was now its top priority and that necessary measures will be shared with customers, employees and suppliers in the coming days. The company employs around 1,000 people.
“We deeply regret the insolvency and its consequences for all stakeholders at such a crucial stage of our company’s development,” said Roewe. “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.”
