Li-Cycle seeks buyers for business, assets

Citing the need for additional financing to meet its obligations and repay its liabilities arising from the ordinary course of its business operations and an inability to find financial alternatives to keep itself on track, Toronto-based lithium-ion battery recycler Li-Cycle Holdings Corp. says it has hired a financial services company to assist in a search for buyers for its business or its assets, including the company as a whole or any part.

Li-Cycle recently formed a committee of independent directors to evaluate financial and strategic alternatives, including a potential sale to longtime investor Glencore Ltd., but the battery recycler says no actionable transaction has been found that would work in the best interests of the company and its stakeholders.

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Li-Cycle has weathered financial struggles in recent years after a sharp spike in construction costs in late 2023 indefinitely paused construction on the company’s planned battery recycling “Hub” facility in Rochester, New York. The company was awarded $475 million from the U.S. Department of Energy in late 2024 but has been unable to access the loan due to an inability to meet certain benchmarks tied to the Hub’s construction. In February, the company was delisted from the New York Stock Exchange when its stock fell below the $1-per-share threshold for more than 30 straight days. Since then, it has traded on the OTCQX Best Market.

In a news release, Li-Cycle says that, considering its current circumstances, it will 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.

“No assurances can be made as to whether any such buyers will be found, or as to the terms of any resulting transactions,” the company says.

Leadership changes

Li-Cycle also has announced that co-founder Ajay Kochhar has stepped down from the company’s board of directors and, on May 15, will transition from his role as president and CEO to a senior advisory role to support the company’s sales process.

“Kochhar co-founded Li-Cycle in 2016 and has provided strong leadership and a strategic vision as Li-Cycle developed its patented technology, completed its successful initial public offering and grew to become a leading company in the lithium-ion battery recycling market,” the company says.

William Aziz has been appointed by the company’s board to serve as chief restructuring officer (CRO). According to the company, Aziz has more than 35 years of corporate restructuring experience, playing a key role in major Canadian restructurings, including as the CRO of Walter Energy Canada and U.K., the Toronto Star Group and U.S. Steel Canada. He currently is president and CEO of BlueTree Advisors Inc. and a board member of Maple Leaf Foods Inc.

Li-Cycle’s Chief Financial Officer (CFO) Craig Cunningham also has stepped down from his role, which he occupied since March 2024. Michelle Faysal will serve as the company’s interim CFO and brings “extensive experience as a hands-on senior executive and director,” Li-Cycle says.

“Li-Cycle’s mission and technology provide an important capability to the growing market need of critical materials recycling and energy security independence,” says Jacqui Dedo, independent chair of Li-Cycle’s board. “On behalf of the board, we want to thank all the stakeholders who have supported us in this key mission, and especially Ajay for his vision and leadership as co-founder and CEO, and our employees for their hard work and dedication to the company.”

Li-Cycle says it also is taking steps to curtail operations and optimize liquidity and support its sales process. The company says it has commenced the process to suspend operations in a safe and compliant manner at its Arizona and Alabama “Spoke” recycling facilities and, as a result, will be furloughing approximately 85 employees. The company also is reducing its workforce by approximately 32 positions, primarily at its Toronto headquarters.

Operations at the company’s Germany Spoke currently are continuing.