The electric air taxi sector is witnessing a significant development with Munich-based startup Lilium planning a comprehensive restructuring after recently halting operations and laying off 1,000 employees. The company, which raised over $1 billion prior to going public, is now restructuring with fresh investor backing. This move is pivotal for Lilium’s aspirations to re-enter the eVTOL (electric Vertical Take-Off and Landing) market and regain its stance in the industry. Despite its past challenges, including insolvency proceedings, Lilium’s commitment to sustainable, high-speed regional transportation remains undeterred.
Lilium’s history has been marked by ambitious goals and significant financial backing, as seen when the company raised substantial funds before its public listing. However, prior news reports highlighted operational struggles and financial challenges, culminating in the recent layoffs and the company’s insolvency status. The latest restructuring effort, supported by European and North American investors, signals a potential turning point for the company, providing it an opportunity to stabilize and pursue its initial mission of zero-emission air travel.
What’s Driving Lilium’s Restructuring?
A consortium of European and North American investors has agreed to purchase two of Lilium’s subsidiaries, facilitating the company’s restructuring efforts. This acquisition involves Lilium GmbH and Lilium eAircraft GmbH’s operating assets and is expected to help the company exit insolvency. The asset purchase agreement, pending certain conditions, aims to provide the necessary funding for these subsidiaries to resume operations, although the sale’s proceeds will be distributed according to German Insolvency Law without benefiting Lilium N.V.
What Are the Next Steps for Lilium?
Lilium expects the transaction to close by early January 2025, conditional upon proceeding approvals and creditor committee consent. The restructuring process, facilitated by KPMG through an M&A process, has been designed to support Lilium GmbH’s financial recovery. The company’s subsidiaries have already complied with German law by terminating employee contracts, with plans to rehire staff following the transaction’s completion. This strategy is aimed at stabilizing the workforce and preparing the company for future operations.
Lilium CEO, Klaus Roewe, expressed optimism about the restructuring, stating,
“We are very pleased to announce the signing of an investment agreement with a very experienced consortium of investors, which is a major breakthrough. Deal closing at the beginning of January will allow us to restart our business.”
This agreement is a crucial step toward achieving the company’s goals and overcoming the challenges it has faced in recent months.
Established in 2015, Lilium has been a key player in developing the Lilium Jet, an all-electric aircraft designed for efficient and sustainable transportation. Despite its recent setbacks, Lilium’s partnerships with global aerospace, technology, and infrastructure companies have enabled it to garner international interest. The company’s strategic focus on decarbonizing air travel aligns with global environmental objectives, and the restructuring could help it capitalize on increasing demand for sustainable travel solutions.
Lilium’s restructuring presents both opportunities and challenges. By securing new investor support, the company aims to navigate its financial hurdles and revive its operations in the eVTOL market. This development highlights the complexities of managing an innovative startup in a competitive industry. For stakeholders, Lilium’s renewed focus on its core mission could justify the risks associated with its past financial instability.
