Eyeing the Abyss: Lilium's Subsidiaries Teeter on the Edge of Bankruptcy as Stock Value Plummets

German air taxi developer Lilium announced today that its two subsidiaries, Lilium GmbH and Lilium eAircraft GmbH, will file for bankruptcy. This decision comes after unsuccessful negotiations with state and federal governments in Germany to address the company's urgent financial issues. The news led to a sharp decline in the company's shares traded on the US stock exchange, with shares plummeting by 57% to 23 cents.

The bankruptcy filings result from the subsidiaries' excessive indebtedness and the projection that they will not meet debt obligations in the coming days. Lilium also stated that the parent company itself is considering whether to file for bankruptcy.

Lilium's financial difficulties are partly due to developing an aircraft not yet approved for passenger transport. The company was in the process of securing funding and had applied to the German federal government for a 50 million euro guarantee, which would be part of a larger 100 million euro convertible loan from the German state development bank KfW. However, indicators suggest that the federal government will not approve this guarantee. Similarly, negotiations with the Bavarian state government for a guarantee of at least 50 million euros did not result in an agreement.

A potential bankruptcy in Germany could have significant consequences for Lilium, including the delisting of its common shares from NASDAQ or suspension of trading.

Founded in 2015, Lilium distinguishes itself from many competitors in the air taxi market by focusing on regional transport with a jet capable of a 250-kilometer (155 miles) range and carrying up to six passengers. This contrasts with other companies focusing on shorter intra-city trips.

The mentioned exchange rate is 1 dollar to 0.9240 euros.