TORONTO - Li-Cycle Holdings Corp. (NYSE: LICY), an industry leader in lithium-ion battery resource recovery, has announced a strategic investment of $75 million from Glencore (OTC:GLNCY), a multinational commodity trading and mining company.
This investment, along with the amendment of an existing convertible note, is expected to close around March 25, 2024, signaling confidence in Li-Cycle's patented recycling technology and the company's future plans, particularly for the Rochester Hub project.
The company has been focusing on a Cash Preservation Plan, which includes organizational adjustments and operational streamlining, to manage its financial resources effectively. Despite these cost-saving measures, Li-Cycle produced 6,825 tonnes of black mass and equivalents last year, surpassing their production guidance.
Li-Cycle is also in ongoing discussions with the U.S. Department of Energy for a conditional loan commitment of up to $375 million. This loan is part of the company's broader financing strategy to support its growth and operational plans, including the development of the Rochester Hub.
The Hub's technical review has recently confirmed the feasibility of producing lithium carbonate and mixed hydroxide precipitate, essential materials for the battery supply chain.
As of March 15, 2024, Li-Cycle reported having approximately $35 million in cash and cash equivalents, excluding restricted cash. The anticipated proceeds from the Glencore investment are expected to increase the company's pro forma cash to approximately $110 million.
The Rochester Hub project, which had its construction paused in October 2023 for a strategic review, has incurred costs of around $567 million to date. Li-Cycle has revised the estimated cost to complete the project under the current scope to approximately $960 million.
The project's focus has shifted to producing only lithium carbonate and mixed hydroxide precipitate, a change from the initial plans that included nickel and cobalt sulfate production.
The terms of the investment from Glencore include a senior secured convertible note with a five-year maturity and an initial conversion price of $0.53 per common share. Li-Cycle retains the option to pay interest in cash or kind, with cash interest payments 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 the financial results for 2023. 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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