Li-Cycle has completed commercial agreements with LG Energy Solution for the supply of manufacturing scrap for recycling and with each of LGES and LG Chem for the sale of nickel sulphate from Li-Cycle’s Rochester Hub. With the execution of these agreements, LGC and LGES will now proceed to close the previously announced $50 million investment to purchase common shares of Li-Cycle.
LGC, LGES and Li-Cycle held a signing ceremony on Thursday, April 21, marking the completion of the commercial agreements. In connection with the commercial arrangements, LGES and LGC have officially recognized Li-Cycle as their preferred lithium-ion battery recycling partner in North America. LGES, LGC and Li-Cycle continue to explore additional opportunities globally.
“We’re thrilled to advance our collaboration with LGC and LGES, two global industry leaders in the EV supply chain,” said Ajay Kochhar, co-founder and Chief Executive Officer of Li-Cycle. “Together, we are driving sustainable global electrification through the creation of this milestone closed-loop ecosystem in the lithium-ion battery supply chain.”
Li-Cycle, LGC, and LGES have entered into these strategic arrangements to help support the growing global market demand for lithium-ion batteries and their critical materials. The partnership will enable a closed-loop ecosystem for LGC and LGES for key materials in the lithium-ion battery supply chain and will provide further capital to Li-Cycle for its continued global expansion.
Completion of Commercial Agreements
Nickel is a key component for the production of lithium-ion batteries. Through a North America Scrap 10-year Offer Agreement, Li-Cycle will have the opportunity to recycle nickel-bearing lithium-ion battery scrap and other lithium-ion battery material from LGES’s North America manufacturing sites.
Additionally, under 10-year Nickel Sulphate Off-Take Agreements with each of LGC and LGES, Li-Cycle will sell a combined initial allocation of 20,000 tonnes of nickel contained in nickel sulphate produced at Li-Cycle’s Hub facility currently under construction in Rochester, New York to LGC and LGES, through its off-take partner, Traxys North America LLC. Li-Cycle estimates that the nickel sulphate to be sold to LGC and LGES under these arrangements will be enough to produce lithium-ion batteries that can power approximately 300,000 high-performing EVs.
Execution of Investment in Li-Cycle Common Shares
Under the terms of the Subscription Agreements with LGC and LGES previously announced on December 14, 2021, and as amended and restated on April 21, 2022, LGC and LGES will each subscribe for an equal number of Common Shares of Li-Cycle, for an aggregate investment in the Company of $50 million (the “Investment”).
The Investment will be split into two tranches: (i) an initial tranche of 4,416,960 Common Shares, in the aggregate, at a price of $10.00 per share (for an aggregate initial tranche subscription of approximately $44.2 million), and (ii) a second tranche of Common Shares having an aggregate value of approximately $5.8 million, based on the volume-weighted average trading price of Li-Cycle’s Common Shares for the 5-trading days ending immediately prior to April 29, 2022. The Investment is expected to be completed in full by May 13, 2022.
Additional information regarding this announcement may be found in a Form 6-K that will be filed with the U.S. Securities and Exchange Commission and the Ontario Securities Commission.
