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German air-taxi developer Lilium said on Thursday two of its subsidiaries in the country have decided to file for insolvency following unsuccessful talks with state and federal governments to solve its cash crisis.
The company's U.S.-listed shares fell 57% to 23 cents after the subsidiaries - Lilium GmbH and Lilium eAircraft GmbH - told the parent they are over-indebted and will be unable to pay debts over the coming days.
Lilium is now "reviewing whether there are grounds for its own insolvency as well," it said in a regulatory filing.
The company, among a handful of air-taxi makers that are seeking to upend urban travel, was staring at a cash crunch as it is still developing aircraft that is yet to receive approval to carry passengers.
Lilium had asked the German federal government to guarantee 50 million euros ($54 million) of a contemplated 100 million euro convertible loan from KfW, the German state-owned development bank.
But the company received indications that the federal government would not approve it, Lilium said. Talks with Bavaria, where Lilium is based, for guarantee of at least 50 million euros have not yielded an agreement so far.
The filing for insolvency in Germany could result in the company's ordinary shares being delisted from the Nasdaq, or having its shares suspended, Lilium said.
Founded in 2015, Lilium is targeting the regional transport market with a 250 kilometer-range (155 miles) jet that can carry up to six passengers, unlike many rivals which are mainly looking at shorter trips between cities and suburbs.
(Score: 4, Interesting) by aafcac on Sunday October 27, @02:26PM
Using this in populated areas makes no sense though. You're not going to be able to ever get enough of these going to make sense versus more efficient alternatives like subways. And, that's before you consider that there's products like Honda's Motocompacto and those various electric bikes, skateboards and scooters that are practically everywhere and can often be just picked up at the side of the road or carried with you. Those can be used pretty much wherever you like, and can be used more or less up to the doorstep of the place you're trying to reach.