Li-Cycle Holdings, a lithium-ion battery recycling firm, has put itself up for sale as it struggles with a mounting debt load and the risk of insolvency.

The Toronto-based company announced a strategic review process that could result in a sale, merger, or other business combination, citing severe liquidity issues and an uncertain ability to meet financial obligations.

As part of a broader leadership shakeup, Li-Cycle also announced the departure of its CFO Debbie Simpson. Eric Riddle, previously vice-president and group controller at Carpenter Technology, has been appointed interim CFO effective immediately.

The leadership changes follow the exit of co-founder and CEO Ajay Kochhar, with executive chair and fellow co-founder Tim Johnston stepping in as interim CEO. The company is also undertaking major operational restructuring, including job cuts and cost-saving initiatives.

Li-Cycle had previously paused construction of its Rochester, N.Y., hub after costs soared to an estimated US$1 billion—more than double initial projections. The company continues limited operations at its spoke facilities in North America and Europe but is working urgently to preserve cash and avoid insolvency.

Despite receiving extended waivers from Glencore Canada, Wood River Capital and its other convertible note holders, Li-Cycle said it will “need to significantly modify or terminate its operations and may need to dissolve and liquidate its assets under applicable insolvency laws or otherwise file for insolvency protection.” Li-Cycle said it is seeking buyers for its business or assets, including all or part of the company.

The firm has engaged Moelis & Company as financial advisor and Freshfields Bruckhaus Deringer as legal counsel to support the review process.

Pictured: Worker toiling inside a Li-Cycle lithium-ion battery recycling plant.

Photo: Li-Cycle

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