24-Oct-2024 Source: HeliHub.com
eVTOL developer Lilium has its shares traded on the Nasdaq marked in the US, and has advised the SEC that it has run out of money and will not meet liabilities due in the next few days. Here are the pertinent extracts from the formal statement to SEC
As previously reported, Lilium N.V. (the “Company” or “Lilium”) has been engaged in fundraising initiatives to raise additional cash including from the German government and other sources. On October 17, 2024, Lilium received an indication that the budget committee of the parliament of the Federal Republic of Germany would not approve a €50 million guarantee of a contemplated €100 million convertible loan for Lilium from KfW. In addition, as of the date of this report, Lilium and the Free State of Bavaria have not reached an agreement in principle with respect to a guarantee of at least €50 million. Furthermore, despite its continuous and ongoing fundraising efforts, the Company has not been able to raise sufficient additional funds to continue the operations of Lilium GmbH and Lilium eAircraft GmbH, Lilium’s principal operating wholly-owned German subsidiaries (the “Subsidiaries”). As a consequence, the managing directors of such Subsidiaries have determined that they are overindebted and are or will become unable to pay their existing liabilities due within the next few days. The management of the Subsidiaries has informed the Company that they have to file for insolvency under German law and in doing so will apply for self-administration proceedings in Germany.
and finishes thus – a factual update of how administration works in Germany
In the German market a self-administration proceeding is generally perceived by suppliers, customers, and potential investors as a proceeding with improved chances for a successful in-court business restructuring. This perception in general may improve the chances of sustainably restructuring, recapitalizing, and realigning the business of the Subsidiaries in the interest of their creditors, suppliers, customers, and employees.
Following the filing of their applications, the Subsidiaries will be generally prohibited from repaying any pre-application debt. Furthermore, if and when the self-administration proceedings are admitted by the court on a preliminary basis, creditors typically will be prohibited from foreclosing against the companies on any claims they may have.
The filing for insolvency and application for self-administration in Germany could result in the Company’s ordinary shares being delisted from the Nasdaq Global Select Market (“Nasdaq”) or suspended from trading on Nasdaq. Following the trading suspension and/or delisting, the Company’s ordinary shares may commence trading over-the-counter. The over-the-counter market is a significantly more limited market than Nasdaq, and trading over-the-counter will likely result in a less liquid market and higher bid/ask spreads for existing and potential holders of the ordinary shares and could further depress the trading price of the ordinary shares. The Company can provide no assurance that its ordinary shares will commence trading or continue to trade on this market, whether broker-dealers will continue to provide public quotes of the ordinary shares on this market, or whether the trading volume of the ordinary shares will be sufficient to provide for an efficient trading market. As a result of the Subsidiaries’ self-administration proceedings, the shareholders of the Company are also likely to lose the value of their investment in the Company.
It is feasible that new investment could be forthcoming from sources outside Germany, which would be encouraging to everyone working in the company for certain.
Lilium shares peaked in early 2021 at $14.27. In latest trades a share is valued at $0.23, having closed yesterday at $0.54