$475 million loan amount represents an increase
of $100 million over the original conditional commitment
First DOE loan facility to be finalized for a
battery resource recovery facility and sustainable lithium-ion
battery materials recycling company
Agreement represents affirmation of Li-Cycle’s
sustainable Spoke & Hub Technologies™ and the Company’s
position as a leading supplier of recycled critical materials for
lithium-ion batteries
Li-Cycle Holdings Corp. (NYSE: LICY) (“Li-Cycle” or the
“Company”), a leading global lithium-ion battery resource recovery
company, is pleased to announce that it has entered into an
agreement for a loan facility (“DOE Loan Facility”) of up to $475
million (including up to $445 million of principal and up to $30
million in capitalized interest) through the U.S. Department of
Energy (“DOE”) Loan Programs Office’s (“LPO”) Advanced Technology
Vehicles Manufacturing (“ATVM”) program.
This is the first DOE loan facility to be finalized for a
lithium-ion battery materials recycling company, which further
demonstrates Li-Cycle’s important role in the U.S. battery
materials supply chain as a domestic supplier of recycled critical
battery materials.
The entry by Li-Cycle into definitive documentation with the DOE
follows the DOE's detailed technical, market, financial and legal
due diligence. The DOE Loan Facility is expected to support the
development of the Company’s flagship Rochester Hub project,
located in upstate New York.
Key features of the DOE Loan Facility are summarized below:
DOE Loan Facility
Amount
- Up to $475 million, an increase of $100 million over the
original conditional commitment
- Principal of up to $445 million
- Capitalized interest during the construction period of up to
$30 million
Interest Rate
- Interest rates fixed from the date of each advance to the
maturity date of the loan at the applicable long-dated U.S.
Treasury rate, with a 0% spread
Maturity Date and
Tenor
- Final maturity of March 15, 2040, for an approximately 15-year
term
Principal and Interest Grace
Period
- Grace period on scheduled principal repayments until June 15,
2027
- Interest during the construction period can be capitalized (up
to $30 million), instead of being paid in cash
Conditions Precedent to First
Advance
- First advance under the DOE Loan Facility (“First Advance”1) is
subject to satisfaction or waiver of certain conditions and
requirements, including completing the Company’s base equity
contribution (“BEC”) to the Rochester Hub project. The BEC
includes:
- Settling certain existing commitments relating to the project
for costs incurred but not yet paid (approximately $92 million as
of September 30, 2024)
- Funding approximately $173 million in reserve account
requirements2 of which up to approximately $97 million can be
satisfied through letters of credit
- The amounts above represent a significant portion of the
remaining BEC, are based on current estimates and may change prior
to First Advance, and are among other components of the BEC that
will need to be satisfied prior to First Advance
Other Key Terms
- Customary covenants and events of defaults for a project
finance loan facility
The Company expects the Rochester Hub to be North America's
first commercial hydrometallurgical resource recovery facility and
a significant domestic source of recycled critical materials for
producing lithium-ion batteries, including battery-grade lithium
carbonate and mixed hydroxide precipitate (“MHP”). MHP is an
intermediate product containing nickel, cobalt, and manganese
metals.
Once the Rochester Hub is fully operational, Li-Cycle expects to
produce up to approximately 8,250 tonnes of lithium carbonate and
up to approximately 72,000 tonnes of MHP per year at the Rochester
Hub under the MHP scope. The planned nameplate processing capacity
at the Rochester Hub remains at 35,000 tonnes of black mass per
year. The Rochester Hub project is expected to create approximately
825 construction jobs at peak construction and more than 200
permanent jobs.
The Company estimates the total capital cost of the Rochester
Hub project through to mechanical completion to be approximately
$960 million, of which the remaining estimated cost to complete
(“CTC”) the project is approximately $487 million. The CTC includes
commitments related to the project for costs incurred but not yet
paid (approximately $92 million as of September 30, 2024). The
total capital cost for the Rochester Hub project through to
mechanical completion excludes costs for project commissioning,
ramp-up, working capital or financing.
The Company is actively exploring financing and strategic
alternatives for a complete funding package needed to restart the
construction of the Rochester Hub (of which the DOE Loan Facility
is a key component) and for general corporate purposes. The funding
package would assist in satisfying the funding conditions for First
Advance under the DOE Loan Facility, including funding the
remaining BEC (which includes the reserve account requirements) and
a minimum cash balance.
Ajay Kochhar, Li-Cycle President and CEO, commented:
“Throughout 2024, one of Li-Cycle’s primary objectives has been to
finalize negotiations with the DOE in order to enter into
definitive documentation to obtain a DOE loan. Today, we are
excited to announce our achievement of this significant milestone,
which we believe represents a strong vote of confidence in
Li-Cycle's patented and environmentally friendly recycling
technology and business model. Securing the DOE Loan Facility
through our close collaboration with the DOE is a critical step
toward our goal of restarting construction at the Rochester Hub
project.
“We believe that the DOE Loan Facility offers attractive terms
relative to other third-party financing alternatives available to
us. We believe it will also enhance our financial flexibility and
support our mission to create a sustainable, closed-loop battery
supply chain, which is vital to the electrification transition and
securing energy independence in North America.”
Additional information regarding this announcement may be found
in a Current Report Form 8-K filed with the U.S. Securities and
Exchange Commission.
About Li-Cycle Holdings Corp.
Li-Cycle (NYSE: LICY) is a leading global lithium-ion battery
resource recovery company. Established in 2016, and with major
customers and partners around the world, Li-Cycle’s mission is to
recover critical battery-grade materials to create a domestic
closed-loop battery supply chain for a clean energy future. The
Company leverages its innovative, sustainable and patent-protected
Spoke & Hub Technologies™ to recycle all different types of
lithium-ion batteries. At our Spokes, or pre-processing facilities,
we recycle battery manufacturing scrap and end-of-life batteries to
produce black mass, a powder-like substance which contains a number
of valuable metals, including lithium, nickel and cobalt. At our
future Hubs, or post-processing facilities, we plan to process
black mass to produce critical battery-grade materials, including
lithium carbonate, for the lithium-ion battery supply chain. For
more information, visit https://li-cycle.com/.
Forward-Looking Statements Certain statements contained
in this press release may be considered “forward-looking
statements” within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995, Section 27A of the U.S. Securities
Act of 1933, as amended, Section 21 of the U.S. Securities Exchange
Act of 1934, as amended, and applicable Canadian securities laws.
Forward-looking statements may generally be identified by the use
of words such as “believe”, “may”, “will”, “continue”,
“anticipate”, “intend”, “expect”, “should”, “would”, “could”,
“plan”, “potential”, “future”, “target” or other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters, although not all
forward-looking statements contain such identifying words.
Forward-looking statements in this press release include but are
not limited to statements about: the expectation that the DOE Loan
Facility will support the development of the Rochester Hub project;
the expectation that the Rochester Hub project will be completed;
the ability of the Company to satisfy the conditions for First
Advance under the DOE Loan Facility and to draw on the DOE Loan
Facility; the expectation that the Rochester Hub will be the first
commercial hydrometallurgical resource recovery facility in North
America, and a significant domestic source of recycled critical
materials for producing lithium-ion batteries, including
battery-grade lithium carbonate and MHP; the expected production
targets and the planned nameplate processing capacity at the
Rochester Hub; the estimated capital cost to complete the Rochester
Hub project; the expected job creation; and the expectation that
Li-Cycle will play a key part in the development of a domestic
sustainable and circular supply chain of battery-grade
materials.
These statements are based on various assumptions, whether or
not identified in this press release, including but not limited to
assumptions regarding the timing, scope and cost of Li-Cycle’s
projects, including paused and curtailed projects; the processing
capacity and production of Li-Cycle’s facilities; Li-Cycle’s
ability to source feedstock and manage supply chain risk;
Li-Cycle’s ability to increase recycling capacity and efficiency;
Li-Cycle’s ability to obtain financing on acceptable terms or at
all; the success of Li-Cycle’s cash preservation plan; the outcome
of the go-forward strategy of the Rochester Hub; Li-Cycle’s ability
to retain and hire key personnel and maintain relationships with
customers, suppliers and other business partners; expectations
related to the outcome of future litigation; general economic
conditions; currency exchange and interest rates; compensation
costs; and inflation. There can be no assurance that such estimates
or assumptions will prove to be correct and, as a result, actual
results or events may differ materially from expectations expressed
in or implied by the forward-looking statements.
These forward-looking statements are provided for the purpose of
assisting readers in understanding certain key elements of
Li-Cycle’s current objectives, goals, targets, strategic
priorities, expectations and plans, and in obtaining a better
understanding of Li-Cycle’s business and anticipated operating
environment. Readers are cautioned that such information may not be
appropriate for other purposes and is not intended to serve as, and
must not be relied on, by any investor as a guarantee, an
assurance, a prediction or a definitive statement of fact or
probability.
Forward-looking statements involve inherent risks and
uncertainties, most of which are difficult to predict and many of
which are beyond the control of Li-Cycle and are not guarantees of
future performance. Li-Cycle believes that these risks and
uncertainties include, but are not limited to, the following:
Li-Cycle’s inability to fund the anticipated costs of, and realize
the anticipated benefits from, its Spoke optimization plan;
Li-Cycle’s inability to satisfy the drawdown conditions and access
funding under the DOE Loan Facility; Li-Cycle’s inability to
develop the Rochester Hub as anticipated or at all, and other
future projects including its Spoke network expansion projects in a
timely manner or on budget or that those projects will not meet
expectations with respect to their productivity or the
specifications of their end products; risk and uncertainties
related to Li-Cycle’s ability to continue as a going concern;
Li-Cycle’s insurance may not cover all liabilities and damages;
Li-Cycle’s reliance on a limited number of commercial partners to
generate revenue; Li-Cycle’s failure to effectively remediate the
material weaknesses in its internal control over financial
reporting that it has identified or its failure to develop and
maintain a proper and effective internal control over financial
reporting; and risks of litigation or regulatory proceedings that
could materially and adversely impact Li-Cycle’s financial results.
These and other risks and uncertainties related to Li-Cycle’s
business are described in greater detail in the sections titled
“Item 1A. Risk Factors” and “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operation—Key
Factors Affecting Li-Cycle’s Performance” in its Annual Report on
Form 10-K and the sections titled “Part II. Other Information—Item
1A. Risk Factors” and “Part I. Financial Information—Item 2.
Management’s Discussion and Analysis of Financial Condition and
Results of Operation—Key Factors Affecting Li-Cycle’s Performance”
in its Quarterly Reports on Form 10-Q, in each case filed with the
U.S. Securities and Exchange Commission and the Ontario Securities
Commission in Canada. Because of these risks, uncertainties and
assumptions, readers should not place undue reliance on these
forward-looking statements. Actual results could differ materially
from those contained in any forward-looking statement.
Li-Cycle assumes no obligation to update or revise any
forward-looking statements, except as required by applicable laws.
These forward-looking statements should not be relied upon as
representing Li-Cycle’s assessments as of any date subsequent to
the date of this press release.
___________________________________ 1 First Advance shall occur
on or prior to November 7, 2025. 2 The Loan Facility reserve
accounts required for First Advance includes reserves for project
construction, project ramp-up, and Spoke capital expenditures.
Funding of these reserve accounts does not constitute capital
expenditure on the project and the requirement to fund these
reserve accounts is in addition to the total capital cost of the
Rochester Hub project through to mechanical completion. The
majority of these reserve account funds are expected to be released
to the Company on or before the completion of the Rochester Hub
project.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107111197/en/
Investor Relations & Media
Louie Diaz Sheldon D'souza
Investor Relations: investors@li-cycle.com Media:
media@li-cycle.com
Li Cycle (NYSE:LICY)
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