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Insolvent German electric aircraft manufacturer Lilium is to receive €200 million ($206 million) from the investor consortium Mobile Uplift Corporation (MUC), the Bernstein Group consultancy firm announced on Friday.
The capital increase is intended to provide Lilium with the necessary funds to bring its small electric aircraft to market maturity, the consultancy said on behalf of MUC.
Lilium had filed for insolvency in recent months because it lacked the money to set up production. At the last possible moment, the investor consortium signed a purchase agreement for the business assets of Lilium’s two key subsidiaries, Lilium GmbH and Lilium eAircraft.
Terms of the deal have not been publicly disclosed. The injection of €200 million is not part of the purchase price.
However, according to MUC, several legal steps are still necessary, even if these are essentially formalities.
The creditors’ committee of the Lilium holding company has already approved the sale to MUC, but the decisive creditors’ committees for the two Lilium subsidiaries still have to be appointed by the German court overseeing the bankruptcy proceedings and then also approve the purchase agreement.
The electric aircraft, sometimes referred to as “air cabs,” are also intended to be used for other purposes, including as rescue aircraft for medical emergencies.
Several investors – both old and new – are involved in the rescue of the company, although not all of the investors involved in the consortium have been identified by name.
Among those who have put money into the deal are the German battery developer and manufacturer CustomCells, the venture capital fund Earlybird and the financial investment consultancy GenCap.
In the past, the Chinese Tencent Group was also among the investors, but has not been publicly connected with the bankruptcy purchase.
The partners involved are aware of the size of the task and the associated high risks and challenges, according to a press release announcing the investment. But the investors said that the loss of a company like Lilium would be a major setback for Germany and Europe.
The company, headed by former Airbus executive Klaus Roewe, has around 700 firm advance orders from customers in the United States, the United Kingdom, France, Saudi Arabia and other countries.
Customers and investors had already invested €1.5 billion in the company, which had been listed on the US NASDAQ stock exchange until it filed for bankruptcy.
The investor consortium MUC expects the reorganization to be completed before the end of the first quarter.
