Nordion Inc. (TSX:NDN) (NYSE:NDZ) announced today that Nordion and
Atomic Energy of Canada Limited (“AECL”) have entered into a
comprehensive settlement agreement to resolve the outstanding claims
between both parties related to the MAPLE facilities. Nordion has also
announced that, effective immediately, the parties have entered
into an amended and restated isotope supply agreement and a waste
management services agreement.
“This resolution provides greater clarity for Nordion and removes the
uncertainty and liability around these matters,” said Steve West, Chief
Executive Officer, Nordion Inc. “Nordion is now better positioned to
focus on the needs and priorities of our business, including our
important relationship with AECL, with a continued view to enhancing
shareholder value and creating new opportunities for the company and our
customers.”
Under the terms of the settlement agreement, Nordion will receive CAD$15
million in cash from AECL, and AECL has released its claim against
Nordion of approximately CAD$47 million for arbitration costs. Nordion
has correspondingly withdrawn its MAPLE-related lawsuit against AECL in
relation to the Isotope Production Facilities Agreement (“IPFA”) and the
parties have released each other from claims relating to the IPFA and
related litigation. The release of claims includes Nordion’s claim for
damages against AECL under the IPFA of approximately CAD$244 million and
AECL’s IPFA counterclaim for damages against Nordion of CAD$80 million.
The amended and restated isotope supply agreement is a non-exclusive
agreement for medical isotope supply by AECL to Nordion, which has a
term ending October 31, 2016. The supply agreement may also be
terminated upon, among other things, Nordion establishing a satisfactory
alternative supply of isotopes, the permanent shutdown of AECL's isotope
production facilities, Nordion's failure to meet a minimum purchase
quantity and any force majeure that continues for a period of more than
two years. The primary cost of supply of medical isotopes will continue
to be determined based on a revenue share methodology. Starting in 2014,
the percentage of revenue share that AECL receives each year will
increase throughout the term of the supply agreement contributing to a
mid single-digit decrease in Nordion’s Medical Isotopes gross margin
percentage over the course of the contract. In addition, Nordion has
entered into an agreement to continue waste disposal services from AECL
until October 31, 2026.
The settlement agreement will be available on Nordion's profile on SEDAR
at www.sedar.com
and on EDGAR at www.sec.gov.
About Nordion Inc.
Nordion Inc. (TSX:NDN) (NYSE:NDZ) is a global health science company
that provides market-leading products used for the prevention, diagnosis
and treatment of disease. We are a leading provider of medical isotopes
and sterilization technologies that benefit the lives of millions of
people in more than 40 countries around the world. Our products are used
daily by pharmaceutical and biotechnology companies, medical-device
manufacturers, hospitals, clinics and research laboratories. Nordion has
approximately 450 highly skilled employees in three locations. Find out
more at www.nordion.com
and follow us at http://twitter.com/NordionInc.
Forward-Looking Statements
This news release contains "forward-looking statements" relating to the
net amount expected to be realized from the transaction, the impact of
the amended and restated isotope supply agreement on Nordion’s gross
margin for Medical Isotopes and the duration of waste disposal services
that are not historical facts. Such statements are subject to known and
unknown important risks, uncertainties, assumptions and other factors
that may cause actual results or events to differ materially from the
forward-looking statements in this news release.
The forward-looking statements contained in this news release are made
as of the date of this release and, accordingly, are subject to change
after such date. Except as may be required by securities laws, we do not
undertake any obligation to update or revise any forward-looking
statements contained in this news release, whether as a result of new
information, future events or otherwise. Additionally, we undertake no
obligation to comment on expectations of, or statements made by, third
parties in respect of the transaction.
For additional information with respect to certain of these and other
beliefs, assumptions, risks and uncertainties, please refer to Nordion’s
Annual Information Form for fiscal 2012 available on SEDAR at www.sedar.com
and on EDGAR on www.sec.gov.
These documents are also available on Nordion’s website at www.nordion.com.
Copyright Business Wire 2013