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Li-Cycle Holdings Corp. (LICYF) is seeking buyers for its business or assets, including the company as a whole or its parts, it announced Thursday morning.
The Toronto-based battery recycling company said it requires financing to repay its liabilities, despite extended waivers for its convertible notes from Glencore Canada Corporation and Wood River Capital.
Li-Cycle has been beset with financial and operational problems, including construction on its Rochester Hub in New York state being delayed, major layoffs, facility closures, pauses on its global network of recycling facilities, and large impairment charges.
Global mining company and Li-Cycle investor Glencore proposed to acquire Li-Cycle in March. But Li-Cycle’s directors have not yet found a transaction or alternative in the company’s best interests, the release says, so it may need to “significantly modify or terminate its operations and may need to dissolve and liquidate its assets under applicable insolvency laws or otherwise file for insolvency protection.”
Li-Cycle is retaining Northbrook, Ill.-based Hilco Corporate Finance to help it find potential buyers.
Li-Cycle’s facilities and finances
Li-Cycle oversees a web of facilities in North America and Europe called the Spoke & Hub model. At its Spoke facilities, lithium-ion batteries are shredded to output black mass, which contains valuable metals such as lithium and nickel. At its Hubs, the black mass is further refined into battery-grade materials that can be reused in new batteries.
The company has operating Spoke sites in Arizona, Alabama and Germany, with a facility in Rochester curtailed. Plans for a Spoke in Norway are said to be “paused indefinitely”. Its Spoke in Kingston, Ont., also the company’s first commercial recycling site, was closed in November 2023.
Li-Cycle’s planned Hub facility in Rochester, called a “cornerstone asset” by Li-Cycle’s CEO and president Ajay Kochhar, has been a source of troubles for the company after construction costs swelled dramatically, holding construction.
A loan facility with the U.S. Department of Energy to help finance the project closed at up to $475 million (all figures US) in November 2024, $100 million more than originally announced in February 2023, to help restart construction. However, that has not been enough to alleviate the company's overall financial distress.
As of Dec. 31, 2024, Li-Cycle reported $861.2 million in assets, largely made up of its properties, plants and equipment. Its liabilities stood at $598.1 million, primarily convertible debt.
The company ended 2024 with $31.9 million in cash and operated at a net loss of $137.7 million.
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