Nordion suspends dividend after arbitration loss
By Allison Martell
(Reuters) - Nordion Inc NDN.TO, a Canadian provider of medical isotopes, said on Monday that it would suspend its quarterly dividend after an arbitration panel rejected its claim for damages from its main supplier, sending its shares into a tailspin.
Nordion had hoped to compel state-owned Atomic Energy of Canada Limited (AECL) to pay damages or complete mothballed reactors that would replace the ageing National Research Universal (NRU) reactor. The panel rejected Nordion's claim.
"We are extremely disappointed with the outcome of the arbitration," said Tamra Benjamin, Nordion's vice president for public and government relations. "But regardless of that, we still have a strong business, we've got solid results, we've got good cash flow and margins."
Benjamin said Nordion would need some time to look at the ruling and consider its next steps.
The company said it would stop buying back shares after completing or cancelling its current stock repurchases.
The arbitration decision allows Nordion to continue a lawsuit against AECL, but could substantially reduce its C$1.6 billion ($1.6 billion) claim in that suit. Nordion may also be required to pay some of AECL's arbitration costs, which it said could be material.
In a brief, separate statement, AECL said it would review the panel's decision.
The NRU reactor in Chalk River, Ontario, supplies raw material that Nordion uses to produce molybdenum-99. Nordion is one of the world's leading producers of moly-99, used in medical imaging. Continued...