German eVTOL developer Lilium has revealed the launch of an underwritten public offering of its Class A ordinary shares, alongside a concurrent private placement offering of shares and warrants, led by prominent investors such as Earlybird Venture Capital, BIT Capital, UVC Partners, and Frank Thelen, as well as several Lilium Board members and senior executives.
The private placement, also known as the PIPE (Private Investment in Public Equity), is bolstered by the commitment of Aceville Pte. Limited, an affiliate of Tencent Holdings Limited, to provide an additional $75 million in funding. This injection of capital will be used to partially prepay against the total exercise price of the warrants under the existing purchase agreement between Lilium and Aceville, subject to the successful generation of at least $75 million in gross proceeds from the underwritten public offering and concurrent PIPE.
To ensure flexibility, the underwriter of the public offering will have the option to purchase up to an additional 15% of the shares sold during the 30-day period following the offering, specifically to cover over-allotments. The renowned firm B. Riley Securities has been appointed as the sole bookrunner and underwriter for the offering.
Lilium intends to employ the net proceeds from this comprehensive financing initiative for general corporate purposes. However, the successful completion of the offering remains subject to various market, regulatory, and other conditions, and there is no guarantee as to its actual size or terms.
Simultaneously, the private placement involves a securities purchase agreement between Lilium and esteemed investors. This agreement entails the purchase of shares at a price of $1.30 per share, along with warrants to purchase shares at an exercise price of $2.00 per share. Each warrant will be immediately exercisable for one quarter of a share, with only whole shares issuable upon exercise.
The public offering is expected to conclude on July 18, 2023, with $21 million of the PIPE anticipated to close on the same date and the remaining $21 million expected to close on July 31, 2023. These closings are subject to customary closing conditions. With this significant financing milestone, Lilium fortifies its position in the small group of frontrunners in the rapidly evolving urban air mobility industry, driving toward the realization of its all-electric vertical take-off and landing technology.
Why it’s important: The substantial financing secured by Lilium underscores the growing recognition and support for the potential of urban air mobility, namely from Tencent, one of the highest revenue-generating multimedia companies in the world. With these funds, Lilium can accelerate the development and deployment of its eVTOL jets, paving the way for a transformative transportation solution that offers enhanced efficiency, reduced emissions, and increased accessibility in urban environments.