Lilium Finds a Lifeline with Investor Consortium Amid Financial Struggles

Lilium, a pioneering electric aircraft startup based in Munich, has faced a tumultuous end to 2024. Founded in 2015, the company has been on the brink of insolvency in recent months, unable to secure crucial follow-on funding to sustain its operations. The situation escalated just before Christmas when the company was forced to terminate all employee contracts and prepare for closure. However, a surprising development on December 24, 2024, may offer the embattled firm a chance at recovery.

Lilium Finds a Lifeline with Investor Consortium Amid Financial Struggles
Lilium Finds a Lifeline with Investor Consortium Amid Financial Struggles

Lilium, a pioneering electric aircraft startup based in Munich, has faced a tumultuous end to 2024. Founded in 2015, the company has been on the brink of insolvency in recent months, unable to secure crucial follow-on funding to sustain its operations. The situation escalated just before Christmas when the company was forced to terminate all employee contracts and prepare for closure. However, a surprising development on December 24, 2024, may offer the embattled firm a chance at recovery.

Earlier today, Lilium announced the signing of an asset purchase agreement with Mobile Uplift Corporation, a company established by an experienced consortium of investors from Europe and North America. The agreement outlines plans to acquire the operational assets of Lilium GmbH and Lilium eAircraft GmbH, which had been under self-administration due to financial difficulties. According to the company, this deal is expected to enable the subsidiaries to restart operations, contingent on meeting certain conditions.

The proceeds from the asset sale will be allocated in accordance with German Insolvency Law, with no distributions to Lilium N.V. stakeholders. While the exact purchase price remains undisclosed, the deal is considered substantial as Lilium requires significant funds to advance its certification process, scale production, and prepare for its first manned flights.

The M&A process has been managed by KPMG, which had been in discussions with multiple potential investors interested in acquiring Lilium’s assets or its business operations. These discussions played a critical role in shaping the current agreement, with the creditors' committee actively involved in reviewing and approving the deal. The next steps involve implementing a restructuring plan for the subsidiaries, allowing them to exit self-administration proceedings and rebuild operations.

As part of the insolvency process, Lilium’s subsidiaries terminated the contracts of their remaining employees on December 20, 2024, following German labor laws. However, many employees may have the opportunity to rejoin the company in early 2025, should the deal close as anticipated. The agreement's finalization is expected in January 2025, subject to customary conditions, including approval from the creditors' committee.

In a statement regarding the development, Lilium CEO Klaus Roewe remarked, “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.”

Despite the challenges, Lilium remains a significant player in the electric aviation industry, with approximately 700 firm and pre-orders for its aircraft from customers in the United States, the United Kingdom, and Saudi Arabia. Over the years, the company has received nearly €1.5 billion in investments, underscoring its potential as a disruptive force in the market.

While the road ahead remains uncertain, the agreement with Mobile Uplift Corporation marks a critical juncture for Lilium. If successful, the deal could provide the resources needed to overcome immediate financial hurdles and achieve long-term goals, including the company’s ambition to lead the electric air mobility revolution.