TORONTO - Li-Cycle Holdings Corp. (NYSE: LICY), a prominent lithium-ion battery recycling firm, has announced the issuance of a $75 million senior secured convertible note to an affiliate of Glencore (OTC:GLNCY) plc (LON: GLEN). This move, expected to close around March 25, 2024, strengthens the existing partnership between the two companies and underscores Glencore's commitment to advancing sustainable practices in the battery materials sector.
The agreement modifies the terms of a previous Glencore convertible note, extending its maturity and revising its pricing based on market conditions. This strategic financial maneuver aims to bolster Li-Cycle's liquidity as the company undergoes a comprehensive review process and continues to develop its Rochester Hub project, which has been temporarily paused.
Glencore's investment is part of a broader collaboration between the two firms, where Li-Cycle has been designated as one of Glencore's preferred recycling partners. This partnership also involves a commercial agreement to create an integrated platform to supply customers with both primary and recycled critical battery materials. Glencore's role extends to supplying battery feedstock for Li-Cycle's facilities and marketing the end products and by-products of the recycling process.
The convertible note will mature five years after closing and can be converted into Li-Cycle common shares at an initial price of $0.53 per share. Li-Cycle retains the option to pay interest on the note in cash or through payment-in-kind (PIK), with interest rates based on the Secured Overnight Financing Rate (SOFR) plus a margin.
Li-Cycle has pledged a security interest in substantially all of its assets to Glencore as part of the agreement and has also granted Glencore registration rights related to the note. Further, the deal includes the amendment and restatement of the existing note in two future tranches, each with terms that activate upon the occurrence of specific events.
Li-Cycle's board, which formed a Special Committee excluding Glencore's representative, has overseen the evaluation of potential strategic alternatives with the assistance of Moelis (NYSE:MC) & Company LLC.
Li-Cycle anticipates releasing its full-year 2023 financial and operating results by March 15, 2024, as part of its Annual Report on Form 10-K for the year ended December 31, 2023.
This announcement is based on a press release statement.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.