Li-Cycle obtains creditor protection under CCAA and Chapter 15
On May 14, 2025, Li-Cycle Holdings Corp. (“Li-Cycle”) announced that Li-Cycle and its subsidiaries in North America (collectively, the “Li-Cycle Group”) sought and obtained an order from the Ontario Superior Court of Justice (the “Court”) providing them with creditor protection pursuant to Canada’s Companies' Creditors Arrangement Act (the "CCAA").
Alvarez & Marsal Canada Inc. was appointed as monitor during the CCAA proceedings (in such capacity, the "Monitor") to assist Li-Cycle with its restructuring efforts and to report to the Court. As part of the proceedings, the Li-Cycle Group expects to conduct a court-supervised sale and investment solicitation process (the “SISP”), a continuation of its previously disclosed efforts to seek buyers for its business or its assets.
The Li-Cycle Group has entered into a term sheet with an affiliate of Glencore Canada Corporation (“Glencore”), Li-Cycle's largest secured creditor, for a debtor-in-possession financing facility (“DIP Facility”), consisting of a credit facility of up to a maximum principal amount of US$12 million. Subject to approval by the CCAA Court, the facility is expected to be used to finance Li-Cycle’s working capital requirements, including for the continued operation of its Germany Spoke, and to implement the restructuring contemplated in the CCAA proceedings, such as the pursuit of the SISP.
Additionally, the Li-Cycle Group entered into an equity and asset “stalking horse” purchase agreement with Glencore, in which Glencore agreed to a “stalking horse” credit bid for at least US$12 million for certain of Li-Cycle’s subsidiaries and assets. The assets include Li-Cycle’s Spokes in Arizona, Alabama, New York, Germany and the Rochester Hub project, as well as the company’s intellectual property, and assumption of certain of its liabilities. The stalking horse agreement also remains subject to approval by the CCAA Court.
Li-Cycle’s U.S. subsidiaries (including Li-Cycle Inc., which owns the Arizona Spoke, Alabama Spoke, New York Spoke and Li-Cycle North America Hub, Inc., which owns its Rochester Hub project) commenced proceedings before the United States Bankruptcy Court for the Southern District of New York under Chapter 15 of the U.S. Bankruptcy Code for recognition of the CCAA proceedings as a “foreign main proceeding.” The U.S. Bankruptcy Court has imposed a broad stay, for the benefit of Li-Cycle’s U.S. subsidiaries, barring the commencement of legal action, the enforcement of remedies, any act to obtain possession of their property in the United States or to exercise control over such property, and other similar conduct.
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Li-Cycle is a leading global lithium-ion battery resource recovery company. Established in 2016, and with major customers and partners around the world, its mission is to recover critical battery-grade materials to create a domestic closed-loop battery supply chain for a clean energy future.
Glencore is one of the world's largest global diversified natural resource companies and a major producer and marketer of more than 60 commodities that advance everyday life. Through a network of assets, customers and suppliers that spans the globe, it produces, processes, recycles, sources, markets and distributes the commodities that support decarbonization while meeting the energy needs of today.