Lithium-ion battery recycler Li-Cycle Holdings Corp. said that Koch Strategic Platforms will make a $100 million investment through a convertible note. Proceeds will support the company’s growth in North America, Europe, and Asia.
In addition to the new capital, Li-Cycle and several Koch Industries business units are exploring ways to speed up Li-Cycle’s global growth efforts. This includes potentially working with Koch Engineered Solutions, which provides engineering, procurement, and construction services; as well as the Optimized Process Designs group, which provides engineering packages, single-point procurement for equipment and materials, fabrication, and construction services.
Mississauga, Ontario-based Li-Cycle said its total addressable market estimate for the quantity of lithium-ion batteries available for recycling globally in 2025 has “accelerated significantly” in the past five months. Estimates in North America, Europe, and China have all increased by at least 50%, the company said.
Among the growth drivers are battery mega-factory announcements that have exceeded original expectations. The company said this drives additional battery manufacturing scrap available for recycling.
Under terms of the investment, Koch will buy a convertible note in the aggregate principal amount of $100 million. The note will have an initial conversion price of around $13.43 per Li-Cycle common share. The company is traded on the New York Stock Exchange as “LICY.” Li-Cycle will settle its conversion obligations by delivering shares of its common stock.
The note matures on Sept. 29, 2026 and interest will be payable semi-annually. Interest payments made in cash will be based on an interest rate of London Interbank Offered Rate (LIBOR) plus 5.0% per year. Payment in kind (PIK) interest payments will be based on an interest rate of LIBOR plus 6.0% per year. LIBOR is specified to have a floor of 1.0% and a cap of 2.0%.
Hub and spoke
In June, Li-Cycle announced a partnership with Renewance, a life-cycle battery management company. The two had collaborated on energy storage projects since early 2020.
Li-Cycle also recently announced plans to build a third North American “spoke” plant in the Phoenix area, becoming the first such plant west of the Mississippi. The facility will produce black mass from spent lithium-ion batteries. This material is then sent to a “hub” facility, a wet chemistry/hydrometallurgical plant, that will refine battery-grade materials. The company’s first hub is set to be operational in 2022 in Rochester, New York.
