MDS Inc writes off MAPLE assets

Thursday, 11 December 2008

MDS Inc, parent company of radioisotope producer MDS Nordion, is to write off the value of its assets in the abandoned MAPLE reactor project.

 

Inside one of the MAPLE reactors during commissioning trials

In an update on performance for fiscal 2008 the Canada-based company said that it will incur a non-cash after-tax charge of approximately C$260 million ($209 million) to write off the net value of its asset in the project to build two 10 MWt reactors at the Atomic Energy of Canada Ltd (AECL) Chalk River site. The units were intended to replace the radioisotope production of the ageing NRU reactor and could have met all the global demand for some key medical isotopes. Although the reactors went critical in 2000 and 2003 respectively, major technical problems during commissioning led to AECL's May 2008 decision to abandon the project.

 

MDS Inc says the write-down, along with a C$260-270 million ($209-217 million) writedown of MDS Pharma Services goodwill that it expects to make, will result in a net loss below the range expected for 2008, but will have no impact on the company's cash positions or the day-to-day operations at MDS Nordion and MDS Pharma.

 

MDS has launched proceedings against AECL claiming C$1.6 billion ($1.2 billion) in damages, but MDS Inc president and CEO Stephen de Falco said the company had been required to take a full write-down of the MAPLE assets because of the difficulty of forecasting the outcome of the dispute. "We continue to have a strong case against AECL and the Government of Canada relating to the MAPLE agreement," he said.