Glencore approached battery recycler Li-Cycle for potential deal

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(Reuters) – London-listed Glencore has made an offer to acquire Canadian lithium battery recycling company Li-Cycle as part of a proposal to offset operational and financial issues.

In a letter to a board chair, dated March 14, Glencore said it would like to commence discussions with the company and Li-Cycle’s other stakeholders regarding the potential transaction as soon as possible.

Li-Cycle’s debt held by Glencore is convertible to roughly 84 million shares in the recycling company.

The Toronto-based company also amended its limited duration shareholder rights plan last year to exempt Glencore Canada, allowing it to acquire more than 20% of the company.

Li-Cycle, which has a market capitalization of $10.45 million, according to data compiled by LSEG, said its board has formed a special committee to evaluate Glencore’s letter and the proposed acquisition.

“There can be no assurance that any particular transaction will be proposed, recommended or consummated,” said Li-Cycle spokesperson Louie Diaz, who declined further comment.

The company has developed a network of facilities in Arizona, Alabama and Ontario, producing black mass, which is essentially shredded battery parts. A planned Rochester, New York, facility breaks down that black mass into lithium and other metals — the only facility of its kind in North America.

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.

Glencore did not immediately respond to a Reuters request for comment.

(Reporting by Seher Dareen in Bengaluru and Ernest Scheyder in Houston; Editing by Alan Barona)