Li-Cycle, a battery recycler in Canada, files for bankruptcy protection

Toronto-based Li-Cycle, a lithium battery recycling company, announced on Wednesday it had filed for bankruptcy in Canada. It expects to begin a formal sales process for its assets or business.

The U.S. divisions of the firm have also filed bankruptcy proceedings with the U.S. Bankruptcy Court of the Southern District of New York.

Li-Cycle, the largest secured creditor of Li-Cycle, has signed a debtor-in-possession agreement worth $10.5 million and a stalking-horse credit offer for at least 40 million dollars with Glencore listed in London.

Li-Cycle announced in March that it was looking for buyers of its assets or business, as it needed additional funding to continue operations. Glencore offered to buy the Toronto-based firm as part of an effort to address operational and financial problems.

The company filed for bankruptcy under Chapter 15 of the Companies' Creditors Arrangement Act, a Canadian federal act that allows insolvent companies that owe creditor debts in excess $5 million to restructure and reorganize their financial affairs.

The U.S. Department of Energy approved a $475-million loan to Li-Cycle in November of last year. This was a lifeline for a company that had been plagued by cost overruns, technical problems, and other issues. Gursimran K. Kaur, Bengaluru. Mrigank Dhaniwala & Sonia Cheema edited the article.

(source: Reuters)