ROCHESTER, N.Y. (WROC) — Following a tough third-quarter earnings call, the CEO of Li-Cycle, Ajay Kochhar, spoke with News 8. The battery recycler paused construction of the large Rochester Hub in October.
Kochhar admits that this is a tough situation for the company, but remains committed to completing the hub in Rochester. As he puts it, Li-Cycle has “394 million in the ground” in Rochester.
He again cited a delay in financing, as well as the previously reported increase in construction costs. Kochhar said originally they estimated $700 million, but that number ballooned to a $850 million to $1 billion range.
He says that cost went up due to materials and time, adding the time taken is the biggest expense. When asked if they will keep their current contractors, he said they’re open to working with any contractor.
As for the timing, he believes they acted quickly as they could. He stated the decision that did indeed come after Monroe County Executive Adam Bello’s well-publicized visit.
He also briefly outlined a three-point plan as they re-evaluate:
- Looking at a phased construction model
- Continue to work with the Department of Energy on the $375 million conditional loan
- Look at more financing options
When News 8 spoke to Ethan Wade, a financial expert earlier, this week, Wade said some of the language in the Monday release indicated that bankruptcy could be on the table. News 8 asked if it was.
“No, no. We’re confident in our business,” Kochhar replied. When asked if the stock dive spelled trouble for their investment future, Kochhar said essentially that rechargeable batteries are here to stay and that it’s a sound business model.
“You know, we’re in a tricky situation for sure. I think had we continued and thought (that we could) get the financing together, let’s just keep going… That sort of mindset, then we were flying pretty close to the sun,” he said.
Kochhar also acknowledged that trust has been broken, and as a company, they are reluctant to release any big plans too soon because of that.
“You have to build back trust,” he said. “And the last thing we want to do is come out with very lofty other ideas for the new plan and then miss those. So we’re going to be communicating as often as we can. As we come back with answers, we’re going be back in front of folks talking about what the plan is.”
Their fourth-quarter earnings call will be in February.