Canaccord downgrades Lilium to Hold after German loan denial

Canaccord downgraded Lilium (LILM) to Hold from Buy with a price target of 70c, down from $1.85. The Federal Government of Germany has failed to advance an EUR 100M state-loan that Lilium was expecting to receive from the German State Development Bank, the analyst tells investors in a research note. The firm says the news follows Lilium’s first half financial results in which management indicated that although a positive decision was imminent, Lilium would need to substantially reduce costs or scale back its operations if the loan goes unfulfilled. Canaccord finds the denial as surprising, considering that German Chancellor Olaf Scholz, along with Federal Transport Minister Volker Wissing, had verbally promised government support for Lilium. Germany’s decision brings into question whether Bavaria will release the matching funds that were approved in September, adds the firm.