Catalyzes the step from penicillin N to deacetoxy-cephalosporin C. 2-oxoglutarate + O2 + penicillin N = CO2 + deacetoxycephalosporin C + H2O + succinate Antibiotic biosynthesis; cephalosporin C biosynthesis. Belongs to the iron/ascorbate-dependent oxidoreductase family.