Meeting with Principal Landlords

Thursday 14 April 2011

Southern Cross Healthcare Group PLC

('Southern Cross', 'the Company' or 'the Group')

Meeting with Principal Landlords

Southern Cross, the UK's largest care home operator, announces that it has held a meeting with its principal landlords today to discuss the financial restructuring of the business. A series of proposals were outlined at the meeting which landlords are now considering.

The meeting, attended by 20 of the Company's landlords, representing 92% of its homes, clearly outlined all of the options available to landlords. No decisions were made at this meeting but there is a general recognition of the value to all parties of moving forward to a solution in an orderly fashion.

Southern Cross reaffirmed that the provision of care remains the priority for all parties and that the negotiation process has not, and will not, compromise the quality of care Southern Cross provides to its 31,000 residents.

Jamie Buchan, Chief Executive commented:

"I wish to thank our landlords for attending today's meeting and I look forward to discussing the proposals further, in the weeks ahead. Southern Cross firmly believes that it is in our mutual interests to reach an equitable agreement with landlords. I am encouraged by the constructive nature of negotiations to date and I am confident that we will continue in that vein."

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About Southern Cross

Southern Cross is, in terms of number of beds, the largest UK provider of care home services for the elderly and a major provider of specialist services for people with physical and/or learning disabilities. The Group's care homes for the elderly operate under two distinct brands: Southern Cross Healthcare and Ashbourne Senior Living. Both brands provide a range of social and personal care services and nursing care services for elderly people with physical frailties and differing forms of dementia. The Group's specialist services operate under the Active Care Partnerships brand and provide long-term care services for people with physical and/or learning disabilities and for younger people with complex forms of challenging behaviour.

Southern Cross is focused on providing high quality care in well invested facilities, seeking to be the home of choice in each local community in which it operates. The Group provides care services for most of the local authorities in the UK which, together with the NHS, represent circa 78% of the Group's revenues. Its care home portfolio is largely purpose-built with a high percentage of single occupancy rooms and rooms with ensuite bathrooms.