end of life lithium-ion batteries conveyor
Li-Cycle's original spoke facility in Ontario processess end-of-life batteries into black mass.
Photo courtesy of Li-Cycle

Li-Cycle receives investment from Koch Strategic Platforms

The $100 million investment was made through a convertible note as the companies look for opportunities to accelerate Li-Cycle’s global growth strategies.

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September 30, 2021

Li-Cycle Holdings Corp., Toronto, says Koch Strategic Platforms (KSP), a subsidiary of Koch Investments Group, Wichita, Kansas, will make a $100 million investment in Li-Cycle through the purchase of a convertible note. The investment is designed to support Li-Cycle’s growth opportunities in North America, Europe and Asia.

Additionally, Li-Cycle says it will work with several Koch Industries subsidiaries to explore opportunities to accelerate its global growth strategies. This includes potentially working with Koch Engineered Solutions (KES), which provides engineering, procurement and construction services, as well as the Optimized Process Designs group (OPD), a capability of KES that provides detailed engineering packages, single-point procurement for all equipment and materials, fabrication and construction services. Li-Cycle and KES are exploring commercial opportunities to support the global deployment of incremental spoke facilities and to enhance execution and operational readiness for the company’s Rochester hub.

“KSP’s investment in Li-Cycle will further fund and accelerate the growth of our lithium-ion battery recycling footprint in North America and globally as we scale our efficient and proven technology globally to grow in lockstep with our customers and pursue new market opportunities,” Ajay Kochhar, co-founder and chief executive officer of Li-Cycle, says.

“Lithium-ion battery recycling and recovery is critical for the electrification of transportation. Li-Cycle is a true leader in the space with proven innovative technology and a robust portfolio of customers and strategic partners,” David Park, KSP president, says. “We’re confident in Li-Cycle’s cutting-edge technology and in the company’s ability to deliver long-term value to its stakeholders throughout the battery supply chain.”

As the deployment of new large electric vehicle battery manufacturing factories is occurring more quickly than initially anticipated, Li-Cycle says it recognizes the need to accelerate establishing its processing capacity. The company says its total addressable market (TAM) estimate for the quantity of lithium-ion batteries available for recycling globally in 2025 has grown by at least 50 percent.

Under the terms of the investment, KSP will purchase a convertible note in the aggregate principal amount of $100 million. The note will have an initial conversion price of approximately $13.43 per Li-Cycle common share, subject to customary anti-dilution adjustments, which was established based on 125 percent of the seven-day volume-weighted average price of Li-Cycle’s common shares prior to the date of the note purchase agreement. Li-Cycle says it will settle its conversion obligations through the delivery of common shares. The note will mature Sept. 29, 2026, unless repurchased, redeemed or converted earlier. In addition, KSP has committed to a standstill agreement, and Li-Cycle has granted certain registration rights to KSP.

Li-Cycle says it expects this strategic investment by KSP to provide it with the opportunity to tap into key industry expertise across the broader Koch Industries ecosystem to augment Li-Cycle’s existing expertise, on mutually acceptable terms and with aligned incentives for the long-term success of Li-Cycle. For instance, KES has capabilities to construct, test and ship modular spoke facilities at various KES construction facilities, including in Texas and Poland. With offices in 54 countries, KES can support Li-Cycle with the roll-out and ground execution of spoke facilities globally, as well as support the development of a tailored operational readiness plan for Li-Cycle’s Rochester hub.