Li-Cycle to transition from regional to
centralized management model to increase efficiencies
Li-Cycle expected to generate approximately $10
million in cost savings on an annualized basis through workforce
reduction
Li-Cycle Holdings Corp. (NYSE: LICY) (“Li-Cycle” or the
“Company”), a leading global lithium-ion battery resource recovery
company, today provided a business update regarding its
organizational structure.
As part of its previously disclosed ongoing comprehensive review
and Cash Preservation Plan, which includes organizational
right-sizing and right-shaping, the Company has made the strategic
decision to transition from its regional management structure to a
centralized model to better position the Company for future success
and increase efficiencies.
Ajay Kochhar, Li-Cycle President and CEO, commented: “We are
recalibrating our organizational structure to better align with the
more focused priorities of Li-Cycle. We believe that a centralized
model, and the consolidation of our operational and commercial
teams, will increase efficiencies and facilitate cross-functional
partnerships to enhance our planning process and ability to execute
on our short- and long-term objectives. We remain focused on our
key initiatives of completing our review of the go-forward plan for
the Rochester Hub and evaluating additional financing and strategic
alternatives after securing and closing the recent strategic
financing from Glencore.”
To ensure the appropriate management organizational structure,
the Company made the following leadership changes, effectively
immediately:
Tim Johnston, Executive Chair, will transition to the role of
interim non-executive Board Chair, where he will provide
leadership, support, guidance and strategic advice to the Company.
Considering Glencore’s nomination rights associated with the
recently closed strategic financing, the Nominating and Corporate
Governance Committee of the Board will be considering changes to
Company’s Board and Committee composition, expected to be made
immediately following Li-Cycle’s next annual general meeting in May
2024. It is expected that these changes will include identifying an
independent Board Chair.
Conor Spollen, who has been with Li-Cycle since January 2022,
has assumed the role of Chief Operating Officer (COO). In this
role, Mr. Spollen will be responsible for Li-Cycle’s global Spoke
operations driving safety, productivity, and cost-efficiency. In
addition to overseeing Spoke operations, following the completion
of the technical and economic review of the Rochester Hub project,
he will be responsible for project delivery and the planned
operation of the Rochester Hub. Mr. Spollen has more than 33 years
of international mining and metallurgical experience, serving in
leadership roles in a number of global companies, including at
Vale, where he was, among other roles, Chief Operating Officer for
Vale Base Metals’ operating mines and processing facilities in
Canada, UK, China and Japan.
Dawei Li, who has been with Li-Cycle since July 2021, has
assumed the new role of Chief Commercial Officer (CCO). In his new
role, Mr. Li will lead Li-Cycle’s global commercial function and
consolidate the global team’s strategy and approach to continue
building strong partnerships with key battery market players. He
previously led Li-Cycle’s Asia-Pacific region and brings 20 years
of experience in strategy and business development and leading
growth in untapped markets to drive robust performance. Previous to
Li-Cycle, Mr. Li served as Global Business Director for lithium
carbonate at Albemarle Corporation.
With the changes to the centralized and reduced size of the
organization, Debbie Simpson, Chief Financial Officer, will be
leaving the Company to pursue new opportunities. Since joining the
Company in December 2021, Ms. Simpson has made a significant
contribution to Li-Cycle through her executive leadership in
financial management and strategic initiatives. She has helped lead
the strategic funding roadmap for the Company and built a finance
function to support the Company’s focus on fiscal responsibility
and strong governance. Ms. Simpson will continue to support the
team until May 31, 2024, to ensure a smooth transition.
The Company is pleased to announce that Craig Cunningham has
joined Li-Cycle as its interim Chief Financial Officer, effective
immediately. Mr. Cunningham has an extensive background in
executive level leadership and brings more than 17 years of
accounting, finance, operational, and capital markets experience.
Most recently, he was Chief Financial Officer at Electra Battery
Materials and prior to that served as Vice President and Regional
Financial Officer at Kinross Gold.
With the change to a centralized organization model, Richard
Storrie will cease serving as the Company’s Regional President,
Europe, Middle East and Africa (EMEA) to pursue other
opportunities. Mr. Storrie has provided strong leadership for the
Company in both the EMEA and North America regions and has made
significant contributions to Li-Cycle’s operations, commercial
activities, and execution of its growth strategy. He will continue
in an advisory role until May 31, 2024, to support the
transition.
“We would like to extend our sincere thanks to Ms. Simpson and
Mr. Storrie for their dedication and valuable contributions to the
Company. We wish them the very best in their future endeavors,”
said Mr. Kochhar. “We are also excited to welcome Mr. Spollen, Mr.
Li and Mr. Cunningham to their new roles. We believe their
leadership, expertise and experience will be key to Li-Cycle’s
future success.”
In addition to the leadership changes, and as part of the
Company’s Cash Preservation Plan and the change from a regional to
a centralized management model, the Company is taking other steps
to reduce its workforce, primarily at the corporate level. Overall,
the Company expects to reduce approximately 60 positions,
representing approximately 17% of the Company’s global workforce.
The Company estimates that it will incur total charges of
approximately $8.3 million in connection with the workforce
reductions, with the majority of these costs to be incurred as cash
severance payments over the next twelve months. These steps are
expected to generate approximately $10 million in payroll and
benefit cost savings on an annualized basis.
Mr. Kochhar continued, “I want to thank all of the impacted
Li-Cycle team members, as they played a key role in helping us work
towards our vision of creating a more sustainable lithium-ion
battery supply chain. Although our Cash Preservation Plan is
essential to position Li-Cycle for future success, we have deep
appreciation and gratitude for their high-quality work and
contributions and will provide the impacted Li-Cycle team members
with support through a period of transition.”
About Li-Cycle Holdings Corp.
Li-Cycle (NYSE: LICY) is a leading global lithium-ion battery
resource recovery company. Established in 2016, and with major
customers and partners around the world, Li-Cycle’s mission is to
recover critical battery-grade materials to create a domestic
closed-loop battery supply chain for a clean energy future. The
Company leverages its innovative, sustainable and patent-protected
Spoke & Hub Technologies™ to recycle all different types of
lithium-ion batteries. At our Spokes, or pre-processing facilities,
we recycle battery manufacturing scrap and end-of-life batteries to
produce black mass, a powder-like substance which contains a number
of valuable metals, including lithium, nickel and cobalt. At our
future Hubs, or post-processing facilities, we plan to process
black mass to produce critical battery-grade materials, including
lithium carbonate, for the lithium-ion battery supply chain. For
more information, visit https://li-cycle.com/.
Forward-Looking Statements
Certain statements contained in this press release may be
considered “forward-looking statements” within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995, Section 27A
of the U.S. Securities Act of 1933, as amended, Section 21 of the
U.S. Securities Exchange Act of 1934, as amended, and applicable
Canadian securities laws. Forward-looking statements may generally
be identified by the use of words such as “believe”, “may”, “will”,
“continue”, “anticipate”, “intend”, “expect”, “should”, “would”,
“could”, “plan”, “potential”, “future”, “target” or other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters, although not all
forward-looking statements contain such identifying words.
Forward-looking statements in this press release include but are
not limited to statements about: the expected reduction of
approximately 60 positions, representing approximately 17% of the
Company’s global workforce; the estimated total charges of
approximately $8.3 million in connection with the workforce
reductions, with the majority of these costs to be incurred as cash
severance payments over the next twelve months; the expected
approximately $10 million in payroll and benefit cost savings on an
annualized basis though the workforce reduction; the expectation
that transition to a centralized model will better position the
Company for future success and increase efficiencies; the
expectations regarding the review of the go-forward plan for the
Rochester Hub and the evaluation of additional financing and
strategic alternatives; the expectations regarding the new
management organizational structure; the expectations regarding
changes to the Company’s Board and Committee composition, including
identifying an independent Board chair; and the expectation that
the leadership, expertise and experience of Mr. Spollen, Mr. Li and
Mr. Cunnigham will be key to Li-Cycle’s future success. These
statements are based on various assumptions, whether or not
identified in this communication, including but not limited to
assumptions regarding the timing, scope and cost of Li-Cycle’s
projects, including paused projects; the processing capacity and
production of Li-Cycle’s facilities; Li-Cycle’s expectations
regarding near-term significant workforce reductions and the
ability to right size and right shape the organization; Li-Cycle's
ability to source feedstock and manage supply chain risk;
Li-Cycle’s ability to increase recycling capacity and efficiency;
Li-Cycle’s ability to obtain financing on acceptable terms or
execute any strategic transactions; Li-Cycle’s ability to retain
and hire key personnel and maintain relationships with customers,
suppliers and other business partners; the success of the Cash
Preservation Plan, the outcome of the review of the go-forward
strategy of the Rochester Hub; Li-Cycle’s ability to attract new
suppliers or expand its supply pipeline from existing suppliers;
general economic conditions; currency exchange and interest rates;
compensation costs; and inflation. There can be no assurance that
such estimates or assumptions will prove to be correct and, as a
result, actual results or events may differ materially from
expectations expressed in or implied by the forward-looking
statements.
These forward-looking statements are provided for the purpose of
assisting readers in understanding certain key elements of
Li-Cycle’s current objectives, goals, targets, strategic
priorities, expectations and plans, and in obtaining a better
understanding of Li-Cycle’s business and anticipated operating
environment. Readers are cautioned that such information may not be
appropriate for other purposes and is not intended to serve as, and
must not be relied on, by any investor as a guarantee, an
assurance, a prediction or a definitive statement of fact or
probability.
Forward-looking statements involve inherent risks and
uncertainties, most of which are difficult to predict and many of
which are beyond the control of Li-Cycle, and are not guarantees of
future performance. Li-Cycle believes that these risks and
uncertainties include, but are not limited to, the following:
Li-Cycle’s inability to economically and efficiently source,
recover and recycle lithium-ion batteries and lithium-ion battery
manufacturing scrap, as well as third party black mass, and to meet
the market demand for an environmentally sound, closed-loop
solution for manufacturing waste and end-of-life lithium-ion
batteries; Li-Cycle’s inability to successfully implement its
global growth strategy, on a timely basis or at all; Li-Cycle’s
inability to manage future global growth effectively; Li-Cycle’s
inability to develop the Rochester Hub as anticipated or at all,
and other future projects including its Spoke network expansion
projects in a timely manner or on budget or that those projects
will not meet expectations with respect to their productivity or
the specifications of their end products; Li-Cycle's history of
losses and expected significant expenses for the foreseeable future
as well as additional funds required to meet Li-Cycle’s liquidity
needs and capital requirements in the future not being available to
Li-Cycle on acceptable terms or at all when it needs them; risk and
uncertainties related to Li-Cycle’s ability to continue as a going
concern; uncertainty related to the success of Li-Cycle’s Cash
Preservation Plan and related past and expected near-term further
significant workforce reductions; Li-Cycle's inability to attract,
train and retain top talent who possess specialized knowledge and
technical skills; Li-Cycle’s failure to oversee and supervise
strategic review of all or any of Li-Cycle’s operations and capital
project and obtain financing and other strategic alternatives;
Li-Cycle’s ability to service its debt and the restrictive nature
of the terms of its debt; Li-Cycle's potential engagement in
strategic transactions, including acquisitions, that could disrupt
its business, cause dilution to its shareholders, reduce its
financial resources, result in incurrence of debt, or prove not to
be successful; one or more of Li-Cycle's current or future
facilities becoming inoperative, capacity constrained or disrupted,
or lacking sufficient feed streams to remain in operation; the
potential impact of the pause in construction of the Rochester Hub
on the authorizations and permits granted to Li-Cycle for the
operation of the Rochester Hub and the Spokes on pause; the risk
that the New York state and municipal authorities determine that
the permits granted to Li-Cycle for the production of metal
sulphates at the Rochester Hub will be impacted by the change to
MHP and the reduction in scope for the project; Li-Cycle's failure
to materially increase recycling capacity and efficiency; Li-Cycle
expects to continue to incur significant expenses and may not
achieve or sustain profitability; problems with the handling of
lithium-ion battery cells that result in less usage of lithium-ion
batteries or affect Li-Cycle’s operations; Li-Cycle’s inability to
maintain and increase feedstock supply commitments as well as
secure new customers and off-take agreements; a decline in the
adoption rate of EVs, or a decline in the support by governments
for “green” energy technologies; decreases in benchmark prices for
the metals contained in Li-Cycle’s products; changes in the volume
or composition of feedstock materials processed at Li-Cycle’s
facilities; the development of an alternative chemical make-up of
lithium-ion batteries or battery alternatives; Li-Cycle’s expected
revenues for the Rochester Hub are expected to be derived
significantly from a limited number of customers; uncertainty
regarding the sublease agreement with Pike Conductor Dev 1, LLC
related to the construction, financing and leasing of a warehouse
and administrative building for the Rochester Hub; Li-Cycle’s
insurance may not cover all liabilities and damages; Li-Cycle’s
heavy reliance on the experience and expertise of its management;
Li-Cycle’s reliance on third-party consultants for its regulatory
compliance; Li-Cycle’s inability to complete its recycling
processes as quickly as customers may require; Li-Cycle’s inability
to compete successfully; increases in income tax rates, changes in
income tax laws or disagreements with tax authorities; significant
variance in Li-Cycle’s operating and financial results from period
to period due to fluctuations in its operating costs and other
factors; fluctuations in foreign currency exchange rates which
could result in declines in reported sales and net earnings;
unfavorable economic conditions, such as consequences of the global
COVID-19 pandemic; natural disasters, unusually adverse weather,
epidemic or pandemic outbreaks, cyber incidents, boycotts and
geo-political events; failure to protect or enforce Li-Cycle’s
intellectual property; Li-Cycle may be subject to intellectual
property rights claims by third parties; Li-Cycle may be subject to
cybersecurity attacks, including, but not limited to, ransomware;
Li-Cycle’s failure to effectively remediate the material weaknesses
in its internal control over financial reporting that it has
identified or its failure to develop and maintain a proper and
effective internal control over financial reporting; the potential
for Li-Cycle’s directors and officers who hold Company common
shares to have interests that may differ from, or be in conflict
with, the interests of other shareholders; and risks related to
adoption of Li-Cycle’s shareholder rights plan and amendment to the
shareholder rights plan and the volatility of the price of
Li-Cycle’s common shares. These and other risks and uncertainties
related to Li-Cycle’s business are described in greater detail in
the section entitled "Item 1A. Risk Factors" and “Item 7.
Management’s Discussion and Analysis of Financial Condition and
Results of Operation—Key Factors Affecting Li-Cycle’s Performance”
in its Annual Report on Form 10-K filed with the U.S. Securities
and Exchange Commission and the Ontario Securities Commission in
Canada. Because of these risks, uncertainties and assumptions,
readers should not place undue reliance on these forward-looking
statements. Actual results could differ materially from those
contained in any forward-looking statement.
Li-Cycle assumes no obligation to update or revise any
forward-looking statements, except as required by applicable laws.
These forward-looking statements should not be relied upon as
representing Li-Cycle’s assessments as of any date subsequent to
the date of this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240326030918/en/
Investor Relations Nahla A.
Azmy Sheldon D’souza investors@li-cycle.com Media Louie Diaz media@li-cycle.com
Li Cycle (NYSE:LICY)
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