(Bloomberg) -- Lilium NV said its main subsidiaries may be forced to file for insolvency proceedings within days as the electric flying taxi firm struggles to raise enough funding to continue operations.
The subsidiaries have become “overindebted” and won’t be able to pay existing liabilities, according to a filing on Thursday. Management of the units has told the parent company that they will have to file for insolvency under German law and will apply for self-administration proceedings, the filing said.
The startup’s shares fell as much as 63% as of 10:39 a.m. in New York on Thursday, marking a record drop for the stock.
The move comes after the German government denied Lilium a guarantee on a €50 million ($54 million) loan, which the company argued would have offered Lilium a financial lifeline as it burns through funds.
(Updates with shares in the third paragraph.)
©2024 Bloomberg L.P.