April 10 (Bloomberg) -- Thielert AG, the German manufacturer of aircraft engines, fell to the lowest since 2005 in Frankfurt trading after saying it will sell shares to cover a cash shortage and replace Chief Executive Officer Frank Thielert.

Thielert slumped 1.52 euros, or 33 percent, to 3.17 euros, the lowest level since its initial share sale in November 2005, giving the Hamburg-based company a market value of 67 million euros ($106 million). It's the second-biggest loser in Germany's 682-stock CDAX Performance Index.

Thielert faces an ``urgent'' liquidity crisis and plans to raise as much as 24.4 million euros selling shares, it said in a statement. The company requires about 13.6 million euros to cover its needs until June 30 and between 20 million euros and 24 million euros for the period until the end of the first quarter of 2009.

Chief Financial Officer Roswitha Grosser also has been asked to leave the two-person management board, the company said.

``Anyone who was surprised has been sleeping for the past weeks,'' said Jochen Klusmann, an analyst at BHF Bank in Frankfurt, who had a ``sell'' rating on the stock until last month, when the bank dropped coverage. ``The bottom line is the company has booked relatively high sales and profit, but never has had good cash flow.''

Last month, Thielert postponed publication of its 2007 financial report until the end of April because it said it needed more time to complete audits for previous years. The delay came after a German court invalidated financial statements from 2003 to 2005 because of a violation of valuation regulations.

`Urgent' Liquidity Crisis

Thielert ``is threatened by an urgent liquidity crisis, which was triggered by investments already made and delays with the series delivery of airplane engines to airplane manufacturers,'' the company said its statement.

Thielert Vermoegensverwaltung and other shareholders have granted a 2.65 million-euro loan, which is due for repayment March 14, 2010. In addition, banks have granted new credit lines totaling 5.5 million euros and have previously agreed to stand- still commitments with respect to existing credit lines.

Spokesman Sebastian Wentzler couldn't immediately be reached for comment.

The supervisory board has begun a search for a candidate to replace Thielert, who agreed to continue to serve on the management board as chief operating officer once a new CEO is appointed, the company said.

To contact the reporter on this story: Joseph Mapother in Frankfurt at jmapother1@bloomberg.net

Last Updated: April 10, 2008 12:19 EDT