Certification of the Lilium Jet could easily have been achieved by late 2027 through the restructuring central to Lilium’s revival had the abortive rescue of the business not collapsed due to a lack of funding, according to a senior staff member.
Although investors backing would-be saviour Lilium Aerospace had promised to inject €200 million ($207 million) into the operation to continue development of the Lilium Jet, only around one-third of the purchase price – understood to be a very low double-digit million-euro figure – was ever handed over, the source says, speaking on condition of anonymity.
Under the terms of the contract signed before Christmas by what was then Mobile Uplift Corporation (MUC), the payment for the operations and assets of Lilium GmbH and Lilium eAircraft GmbH – two Lilium NV subsidiaries that entered an insolvency process last October – was always intended to be split into two instalments, the person says.
“Normally you would do one closing [payment] but we knew already that [the investors] would have some trouble getting the funds,” they say.
The first “down-payment” enabled the transfer of employees during the early weeks of January “and then once the full payment of the purchase price had been received all the other assets would be transferred”.
But with the second tranche never handed over and Lilium Aerospace now insolvent, those assets – including the largely complete flight-test prototypes, jigs, tooling and the firms’ IP – “still belong to the old company”.
Goerg, the German specialist law firm overseeing the self-administration of Lilium GmbH and Lilium eAircraft GmbH, confirms this is the case.
“The assets to which these companies are still entitled will now be realised in favour of the creditors of these companies as part of the liquidation,” it says.
As is typical in this type of acquisition, the ‘sticker price’ was kept low due to the distressed condition of the business. “Everybody knows paying the purchase price isn’t a big deal – that’s finding the money to fund at least the first year of operations of the new company,” the source says.
“It doesn’t make sense to pay the purchase price if you don’t have the money for the second part.”
While the inability of Lilium Aerospace’s backers to get their hands on the cash has given rise to speculation that the money was never there, or that they were simply speculative time-wasters, the source indicates their intentions were genuine.
KPMG, which advised on the sale, had conducted due diligence and “proof of funds could be shown” otherwise the buyer “would not have had the right to sign the contract”, the person indicates, but “nobody thought about what it takes to transfer those [funds] from A to B”.
Ultimately, the source of the lion’s share of the money appears to have been the issue. Around 80% of the total was to be provided by a private investment fund run by Marian Bocek, a Slovakian entrepreneur who also heads InoBat, a battery maker and a supplier to the Lilium Jet programme.
A large proportion of that was drawn from sources in North America – pension investment funds, for example – which proved significantly more difficult than expected to transfer into a European commercial bank.
Bocek had a “strong legal obligation” – a notarized contract – to make the payment following the pre-Christmas agreement and genuinely “looked as though he wanted to help”, the person insists.
Zurich-based ISP Group was brought in to act as an “intermediary bank”, with its chairman Roy Tal at one stage joining Bocek on a video call with Lilium Aerospace’s more than 700 employees to brief them when the money – and critically their wages – would be paid.
Speculation has also suggested problems were found with the origin of the money, but this is not the case, the person maintains, ruling out both China and the Middle East as its source.
“All parties involved were convinced it was all sound and solid with no compliance issues at all.”
Had the €200 million been secured, in combination with significant reductions in cash burn – to between €20-25 million per month – it “would have given us life deep into the year, way beyond first flight”.
A maiden sortie of the Lilium Jet would also have triggered a first tranche of customer payments, further swelling the company’s coffers.
Thanks to the time lost to the self-administration and sale, a production-conforming Lilium Jet would “have flown in the summer [of 2025] then we would have had two to two-and-a-half years of flight tests in front of us”, the source says.
But the significant headcount reductions needed to cut costs – from around 1,200 pre-administration to about 750 as Lilium Aerospace – would have caused “about one year of delay” in the certification process, pushing it into the second half of 2027.
In fact, the plan would have given the company additional time in which to complete the flight testing and certification over a previous schedule which foresaw a flight in early 2025 and certification in late 2026.
This new timeline would have marked a change in strategy for Lilium. Originally, management pursued an even faster process, with a higher near-term cash-burn and some risk if things did not go to plan, but one offering a potentially quicker route to service-entry and cash generation.
Lilium had agreed with the European regulator to “go forward with a real aircraft” to enable a “really fast-track certification”.
The plan was to fly a total of six certification-conforming aircraft with a pilot on board for the flight-test campaign; no prototypes or demonstrators were planned beyond two scaled unmanned aircraft that had previously been tested in Spain.
“Our timeline was shorter [than others],” the source says. That view was shared by the financial community, by and large, who forecast that Lilium be among the first of its peers to become cash positive.
“We knew exactly how the powertrain would perform through all the flight phases because we had done so much testing. We knew with a high degree of confidence that the aircraft was working and didn’t anticipate running into trouble that would require a redesign,” the person says.
There had been slippage along the way, most recently in 2024 when problems with battery production and software saw the year-end target for first flight move into early 2025.
But such was the confidence in the underlying ducted-electric-fan technology that the fast-track approach was to be retained, albeit slowed, by Lilium Aerospace.
“The aircraft worked, and we had the technology and the team – we decided to go for the higher cash spend,” they say.
Lilium Aerospace’s failure to secure the funding, however, has put those plans on ice, albeit the source says Bocek is still hopeful that a solution can be found.
“It felt like we were in front of a big box of gold nuggets with an old, rusted lock on it. We were trying for four weeks to get it unlocked but it still won’t open.”
While the assets of the two subsidiaries “were not up for sale before now”, those managing the administration “will have a decision to make on what we are going to do now”.
There is “no need for a fire sale” just yet, the person says, but if Lilium Aerospace is liquidated then they will “will put it up for sale”.
Lilium Aerospace’s filing for insolvency on 21 February capped a year that was “really a roller-coaster” for Lilium employees and management alike.
Although Lilium – the old, listed company – had raised around a little over €100 million last spring, this was only enough to take it through to the autumn. More was obviously needed, but private investors questioned the competitiveness of Germany as an investment location.
“All our competitors had strong government support at their sites, we had nothing,” the insider says. “In fact, some of our investors offered to invest significantly more into Lilium if we were able to obtain what they felt was normal: government support in Germany.”
Lilium therefore turned to Germany’s KfW investment bank for a €100 million loan to be underwritten equally by the Federal government and the State of Bavaria.
Private sector backers promised “another €100m or more” if the company could secure the public funding.
“We were really optimistic that we would get at least €200 million, which would have got us to first flight then we would be good,” the person says.
Dealing with public officials was “slow” but “we finally thought we had a breakthrough”, they add.
But talks dragged on, pausing for a summer break and by the time the government turned down the guarantee in early October – ironically, given Lilium’s environmental credentials, due to objections from the Green party – “the time to react was limited”.
Lilium GmbH and Lilium eAircraft GmbH staggered on for another couple of weeks before they were forced on 24 October to file for self-administration insolvency, a means of seeking new owners.
Before that could happen, a company to handle the M&A process needed to be appointed, and by the time KPMG was selected, two weeks had elapsed.
“With the end of the year approaching fast, the time pressure was huge.”
Although there was “lots of interest” the “timeline was becoming a threat”, the source says.
With the clock ticking, an investor – understood to be from Switzerland – had come forward and by 19 December was ready to announce a €300 million deal.
“But the guy called up at 08:15 and said ‘there’s a problem with the financing – it is taking longer’.” That effectively “threw us under the bus”, the insider says, ultimately clearing the way for MUC to make its last-ditch offer.
“And then it is the same all over again. In the end, if you are successful you forget about the pain and carry on. But the last 12 months have been only pain.”
