Toronto-based lithium battery recycling firm Li-Cycle said on Wednesday that it has filed for bankruptcy protection in Canada and expects to start a formal sale for its business or assets.
The firm’s U.S. units have also commenced proceedings in the U.S. Bankruptcy Court for the Southern District of New York.
Li-Cycle has entered into a $10.5 million debtor-in-possession financing and a stalking horse credit bid for at least $40 million with London-listed Glencore, its largest secured creditor.
In March, Li-Cycle said it is seeking buyers for its business or assets as it needs additional funding to maintain operations. Glencore made an offer to acquire the Toronto-based company as part of a proposal to offset operational and financial issues.
The company has filed for bankruptcy protection under Chapter 15 and the Companies’ Creditors Arrangement Act (CCCAA), a Canadian federal law that allows insolvent corporations that owe creditors in excess of $5 million to restructure their business and financial affairs.
In November last year, the U.S. Department of Energy finalized a $475 million loan for Li-Cycle, a financial lifeline for the company that kept running into cost overruns and technical issues. (Reporting by Gursimran Kaur in Bengaluru; Editing by Mrigank Dhaniwala and Sonia Cheema)
