Advanced Air Mobility News

Lilium Plans to Raise USD$250 Million, Secures USD$100 Million from Tencent

Lilium Plans to Raise USD$250 Million, Secures USD$100 Million from Tencent

Lilium, the German eVTOL manufacturer, has secured USD$100 million in funding from Tencent Holdings affiliate Aceville as part of grand plans to raise a total of USD$250 million for the development of Lilium Jet eVTOL.

Aceville, the Singapore-based unit of Tencent Cloud, will get 184.2 million Lilium warrants worth $1 per Class A share and will give the German company USD$100 million of cash once the fundraising process concludes. It also promised to provide a further capital injection of USD$75 million contingent on Lilium raising an additional USD$75 million of equity, debt, or grants from certain third parties.

Lilium said the capital raise will enable it to continue developing its Lilium Jet eVTOL, as well as pay for a majority of the costs the company will incur to conduct the first manned flight of its type-confirming electric aircraft that is slated for the second half of 2024. 

Before this capital raise, Aceville held 22% of the shares in Lilium. With the significant amount of capital being invested this time around, it would see the Tencent subsidiary retain its position as the largest single shareholder in the eVTOL firm.

Upon the announcement, Lilium’s U.S.-listed shares surged 43.24% to USD$0.55 in premarket trading.

Lilium is currently facing a financial conundrum as it risks being delisted on the Nasdaq Stock Market. Its stock price fell below USD$1 on March 1 and has failed to surpass that benchmark for over a month. This puts the company in a race against time as it would have a 180-day grace period to lift its stock price back over $1. Failing to do so would result in Lilium being delisted from the Nasdaq stock exchange.

“The capital raise announced today marks an important development in our ongoing mission to revolutionize the aviation industry. With this financing, we are excited to continue our development program at full pace,” Lilium CEO Klaus Roewe said. 

To address future fundraising needs, he said Lilium is engaged in fruitful discussions with a myriad of investors, including those that have previously invested in the company.

“We remain in multiple constructive discussions with existing and potential new investors. We hope to announce further updates soon,” Roewe said. 

The capital raise comes after Lilium announced in March that it was exploring new funding avenues. The electric aircraft developer also defended its battery technology after it was criticized for needing more power in comparison to other eVTOL firms. 

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