German eVTOL startup Lilium has started a reorganisation, appointing KPMG to conduct a structured M&A process to bring in new investment.
This comes after Lilium announced last month that its two main subsidiaries are filing for insolvency.
The local court of Weilheim approved Lilium’s insolvency filings, enabling the company to continue operations under self-administration while seeking a path to financial stability and program continuation.
The court has decided to keep Lilium’s management team in place, supported by a restructuring team that includes two Chief Insolvency Officers, Prof. Dr. Gerrit Hölzle and Dr. Thorsten Bieg.
Additionally, Mr. Ivo-Meinert Willrodt, an attorney specialising in insolvency, will work to protect creditors’ interests during this process.
Mr. Willrodt, who has experience with companies like Sono Motors and EMT, explained: “My primary goal as provisional custodian of Lilium is to support the investor process to give the company a perspective.” He added, “As the appointed provisional custodian, I do not take an active role in the implementation of measures in the company. I accompany the proceedings in the role of a supervisory body – always from the perspective of the creditors and the court.”
Shareholders express transparency concerns
The timing of Lilium’s restructuring has raised questions among shareholders.
Dr. Vivek Arunchalam, a Senior Investment Consultant at GBP International and Lilium shareholder, voiced concern over how the process has unfolded. He expressed doubts about the transparency of the restructuring, commenting that “If startups raise funds from the public investors, file bankruptcy and shareholders lose the wealth, and then the firm decides to resell or restructure, how are the shareholders compensated?
“The Board of Directors of Lilium have conveniently blamed the German government for the bankruptcy but have protected their wealth and themselves by the restructuring process, blaming the government and getting a “victim status” amongst the public.” He added that the timing of the bankruptcy filing, combined with the delisting, underscores broader challenges for investors in the startup ecosystem.
In a recent statement, Lilium’s CEO Klaus Roewe shared his optimism that with fresh capital, the company can emerge from restructuring and continue toward certification for the Lilium Jet. Currently, Lilium is advancing toward major program milestones, including static testing for its aircraft fuselage and the anticipated first manned flight.
NASDAQ delisting and the path forward
The restructuring announcement comes as Lilium prepares to face suspension from NASDAQ trading on November 6, with shares expected to move to over-the-counter trading. This change could significantly impact trading volumes and may further affect the share price.
With a current order pipeline of over 780 Lilium Jets and ongoing assembly of its initial jets, the company remains focused on its certification goals.
Amin Vafadar, Senior Advisor at the AAM Institute praised the KPMG move, saying: “Engagement with KPMG indicates a commitment to transparency and strategic growth. If successful, this process could provide the capital needed to sustain operations and maintain its leadership.”
However, questions linger as Lilium seeks strategic partners to support its vision for sustainable aviation amidst its complex financial challenges.
