Li-Cycle announces $75M strategic investment from Glencore

Li-Cycle (LICY) has entered into an agreement to issue a senior secured convertible note in an aggregate principal amount of $75M to an affiliate of Glencore (GLNCY), a producer, recycler, and marketer of nickel and cobalt for the production of lithium-ion batteries. Glencore has designated Li-Cycle as one of its preferred recycling partners, and Li-Cycle and Glencore entered into a strategic commercial partnership aimed to create an integrated platform to supply a global customer base with both primary and recycled critical battery materials. As part of the partnership, Glencore previously made a $200M investment in Li-Cycle in June 2022 through the purchase of a convertible note. Glencore is a battery feedstock partner for Li-Cycle’s Spoke facilities, as well as a future supplier of both black mass and key reagents for Li-Cycle’s future Hub facilities. The Note will mature on the fifth anniversary of closing and will be convertible into common shares of the Company at an initial conversion price of 53c per Li-Cycle common share. Cash interest payments will be based on the Secured Overnight Financing Rate plus 5.0% per year, and PIK payments will be based on SOFR plus 6.0% per year. The Note is redeemable at the option of Li-Cycle at a redemption price equal to 100% of the then outstanding principal amount of the Note being redeemed plus accrued and unpaid interest. As security for the Company’s obligations under the Note, Li-Cycle has agreed to give Glencore a security interest in substantially all of its assets. In addition, certain of Li-Cycle’s subsidiaries organized in Canada, the United States, Switzerland and Germany have agreed to guarantee the Company’s obligations under the Note and provide security interests on substantially all of their assets.