Canadian battery recycler Li-Cycle files for bankruptcy protection
Li-Cycle has entered into a USD 10.5 million debtor-in-possession financing and a stalking horse credit bid for at least USD 40 million with Glencore, its largest secured creditor.
Battery recycling firm Li-Cycle has filed for bankruptcy protection in Canada and is likely to start a formal sale for its business or assets, according to a Reuters report.
The Toronto-based lithium battery recycling company’s US units have also started proceedings in the US Bankruptcy Court for the Southern District of New York, the Reuters report said.
Li-Cycle has entered into a USD 10.5 million debtor-in-possession financing and a stalking horse credit bid, for some of its subsidiaries and assets, for at least USD 40 million with Glencore, its largest secured creditor.
Those entities include Li-Cycle North American Hub, which owns the Rochester Hub facility on McLaughlin Road, Greece, New York.
In March, Li-Cycle revealed it was seeking buyers for its business or assets, with the additional funding needed to maintain operations.
It filed for bankruptcy protection under Chapter 15 and the Companies’ Creditors Arrangement Act, a Canadian law that permits insolvent corporations to restructure their business and financial affairs, the Reuters report said.
Li-Cycle said its goal is to “identify a transaction or investment opportunity” that will allow it to continue to exist, to restart operations “at some or all of its paused spokes and to resume construction of the Rochester Hub.”
The company had secured a USD 475 million loan from the US Department of Energy (DOE) but before it can start drawing any money, it must first pay off USD 89.7 million in existing construction debts on the project and also ensure it has USD 173 million in reserve — neither of which has happened — according to a report by the Rochester Business Journal.
Founded in 2016, Li-Cycle expanded rapidly through late 2023, building facilities to process battery manufacturing scrap and end-of-life lithium ion batteries from EVs and electronics, according to Automotive News.
