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©Reuters.
TORONTO – Li-Cycle Holdings Corp. (NYSE: LICY), an industry leader in lithium-ion battery resource recovery, announced a $75 million strategic investment from Glencore (OTC:), a multinational commodity trading and mining company.
This investment, along with an amendment to the existing convertible notes, is expected to close on or about March 25, 2024 and demonstrates confidence in Li-Cycle’s patented recycling technology and the company’s future plans, particularly the Rochester Hub project. ing.
The company has focused on cash preservation plans, including organizational adjustments and operational streamlining, to effectively manage financial resources. Despite these cost-cutting measures, Li-Cycle produced his 6,825 tons of black ingot equivalents last year, exceeding production guidance.
Li-Cycle also has ongoing discussions with the U.S. Department of Energy for a conditional financing agreement of up to $375 million. The financing is part of the company’s broader financing strategy to support its growth and operational plans, including the development of its Rochester hub.
The Hub’s technology review recently confirmed the feasibility of manufacturing lithium carbonate and mixed hydroxide precipitates, an essential material in the battery supply chain.
As of March 15, 2024, Li-Cycle reported having cash and cash equivalents of approximately $35 million, excluding restricted cash. The anticipated proceeds from the Glencore investment are expected to increase the company’s pro forma cash to approximately $110 million.
Construction of the Rochester Hub project was paused in October 2023 for a strategic review, which has resulted in approximately $567 million in costs to date. Li-Cycle has revised its estimated cost to complete the project at its current scope to approximately $960 million.
The focus of the project has changed from the original plan, which included the production of nickel sulfate and cobalt sulfate, to solely the production of lithium carbonate and mixed hydroxide precipitate.
Terms of the investment from Glencore include senior secured convertible notes with a maturity of five years and an initial conversion price of $0.53 per common share. Li-Cycle retains the option to pay interest in cash or in-kind, and cash interest payments are based on the secured overnight financing rate plus 5.0% per annum.
Li-Cycle will hold a conference call and webcast on Tuesday to discuss these updates and its 2023 financial results. The company continues to navigate the complexities of the evolving battery recycling market and is working towards establishing a domestic supply chain for critical battery materials.
This news is based on a press release statement from Li-Cycle Holdings Corp.
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