March 28, 2014 / 8:30 PM / 4 years ago

UPDATE 1-Canada to remove foreign investment limit on Nordion

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OTTAWA/WINNIPEG, March 28 (Reuters) - The Canadian government will remove the 25-percent foreign investment cap on medical isotope provider Nordion Inc in cases that are deemed to be of net benefit to Canada, under legislation introduced on Friday.

The proposed changes are contained in a lengthy bill that will implement February’s federal budget. Its passage is assured because of the Conservative government majority in Parliament.

“The foreign ownership restrictions with respect to the company were put in place when it was privatized in the early 1990s, and do not serve an ongoing purpose,” said Melissa Lantsman, spokeswoman for Finance Minister Joe Oliver.

“The removal of the foreign ownership restrictions will allow Nordion to access more investment capital, enabling it to better grow and create jobs, but is conditional on approval of a transaction under the Investment Canada Act.”

Nordion shares were down slightly in Toronto and New York in late Friday trading.

Ottawa-based Nordion hired advisers Jefferies & Company in early 2013 to examine options for its future. In July, the company sold its targeted therapies division to British health care company BTG PLC for $200 million in cash, completing the review’s first phase.

CEO Steve West said on March 7 that the review’s second phase is under way.

The company is one of the world’s leading producers of molybdenum-99, an isotope used in medical imaging, and it depends on raw material from an aging facility of the state-owned Atomic Energy of Canada Ltd (AECL) in Chalk River, Ontario. That supply runs out in 2016, raising questions about the future of that part of Nordion’s business.

A medical isotope is a radioactive substance used mainly to diagnose illness.

A spokeswoman for Nordion could not be immediately reached. (Reporting by Randall Palmer in Ottawa and Rod Nickel in Winnipeg; Editing by Steve Orlofsky and Ken Wills)

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