On Thursday, Lilium (NASDAQ: LILM), the German air-taxi developer, said two of its subsidiaries in the country have decided to file for insolvency following unsuccessful talks with state and federal governments to solve its cash crisis.
The company’s U.S.-listed shares fell 60% to 21 cents after the subsidiaries – Lilium GmbH and Lilium eAircraft GmbH – told the parent they are over-indebted and will be unable to pay debts over the coming days.
Lilium is now “reviewing whether there are grounds for its own insolvency as well,” it said in a regulatory filing.
The company, one of a few air taxi makers aiming to revolutionize urban travel, was staring at a cash crunch as it is still developing aircraft that is yet to receive approval to carry passengers.
Lilium (NASDAQ: LILM) had asked the German federal government to guarantee 50 million euros ($54 million) of a contemplated 100 million euro convertible loan from KfW, the German state-owned development bank.
But the company received indications that the federal government would not approve it, Lilium said. Talks with Bavaria, where Lilium is based, for a guarantee of at least 50 million euros have not yielded an agreement so far.
The filing for insolvency in Germany could result in the company’s ordinary shares being delisted from the Nasdaq, or having its shares suspended, Lilium said.
Founded in 2015, Lilium is targeting the regional transport market with a 250-kilometer-range (155 miles) jet that can carry up to six passengers, unlike many rivals which are mainly looking at shorter trips between cities and suburbs.
($1 = 0.9240 euros)
(Source: Reuters)
