Lilium Shares Plunge 45% as Air Taxi Firm's Subsidiaries Prepare to File for Insolvency

Lilium, the German aerospace startup focused on developing air taxis, announced on Thursday that it is facing significant financial challenges. The company disclosed in a U.S. regulatory filing that its two main subsidiaries, Lilium GmbH and Lilium eAircraft GmbH, will be filing for insolvency in the upcoming days.

Air taxi firm Lilium plunges 45%

The news led to a dramatic plunge in Lilium's shares, which nosedived by 45%. The announcement raised concerns about the company's financial stability and its ability to continue operations.

Lilium revealed that it has been unable to secure sufficient additional funds to sustain the operations of its two main subsidiaries. Consequently, the heads of Lilium GmbH and Lilium eAircraft GmbH have determined that they are overindebted and are or will become unable to fulfill their existing liabilities in the near future.

The management of the subsidiaries has informed Lilium that they are compelled to file for insolvency under German law. They will also apply for self-administration proceedings in Germany. Once the insolvency filings are initiated, the subsidiaries will generally be exempt from repaying any pre-application debt. Furthermore, creditors will be prohibited from foreclosing against the companies on any claims they may have.