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Li-Cycle Holdings Corp. is seeking a buyer for either its business or assets as it runs low on cash and a possible tie up with mining giant Glencore has failed to materialize.
The Toronto-based battery recycling startup, which has ties with General Motors, said May 1 that it has hired Hilco Corporate Finance to assist in finding a buyer for all or part of the company. Failing to secure a deal could force Li-Cycle to seek creditor protection, the company warned.
“Considering the company’s current circumstances, Li-Cycle, 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,” the company said in a statement.
Founded in 2016, Li-Cycle expanded rapidly through late 2023, building shredding plants to process battery manufacturing scrap and end-of-life lithium ion batteries from electric vehicles and electronics. The plants in Canada, the United States and Europe represented the first phase in the company’s two-stage process for readying valuable metals such as lithium, nickel and cobalt for reuse in new batteries.
General Motors has a vested interest in Li-Cycle.
Ultium Cells LLC, a joint venture between General Motors and LG Energy Solution, announced an agreement in 2021 that saw Li-Cycle agree to recycle up to 100 per cent of the material scrap from battery cell manufacturing.
Then, in 2022, Li-Cycle received a $50-million investment from the automaker’s battery suppliers LG Chem and LG Energy Solution.
The company was partway through construction on a chemical plant in Rochester, Ny. that would carry out the second stage in its recycling process, when cost overruns forced it to pause work in November 2023. The company has been unable to secure adequate financing to complete the project, despite locking in a $475-million loan from the U.S. Department of Energy in November 2024.
In March, the recycling company and longtime partner Glencore began talks about a “potential transaction involving Li-Cycle,” but to date, the two sides have not reached an agreement.
Retaining Hilco will broaden the company’s search for a buyer, but Li-Cycle warned that “no assurances can be made as to whether any such buyers will be found.”