Project Reset Completed

Circle Holdings plc

("Circle" or the "Company")

Project Reset Completed

5 December 2014

Further to the announcement on 29 October 2014, the Company is pleased to announce that on 3 December 2014 the BVI court sanctioned the scheme of arrangement, and on 4 December the scheme became effective and accordingly the Company completed the acquisition of Circle Partnership Limited ("CPL"). All of the steps in respect of Project Reset, the group's organisational restructuring, have now been completed and the Company now owns 100% of Circle Health Limited and the group's operating entities. As a consequence, all of the intragroup debt of ca. £298 million will be eliminated.

Issue of shares

In accordance with the terms of the scheme of arrangement, the Company issued 23,093,930 Convertible Shares of £0.02 each in the Company, to the trustee of Circle Partnership Benefit Trust (the "CPBT"), split in two equal tranches, which shall automatically convert after 18 months and 36 months, respectively, into Ordinary Shares. The Convertible Shares cannot be traded or sold until they have converted into Ordinary Shares.

In addition, under the terms of Project Reset, the Company issued 38,855,367 ordinary shares of £0.02 each in the Company to the CPBT (the "CPBT Ordinary Shares"), which are to be used to satisfy options to be granted under the Company's new share incentivisation plans in accordance with the terms previously approved by the Company's shareholders. Application has been made for the CPBT Ordinary Shares to be admitted to AIM, with admission expected to occur on 8 December 2014 ("Admission"). Upon Admission, the shares will rank pari passu in all respects with the existing Ordinary Shares of the Company and cannot be traded or sold by the CPBT until option holders have exercised their options in accordance with the share plan rules. Initial options to be granted under the Partnership Incentive Plan ("PIP") rules are subject to performance criteria and holding periods determined by the Company's Remuneration Committee. The earliest that options can be exercised under the PIP is 31 December 2015. Options granted under the Management Incentive Plan ("MIP") to the Company's senior management team cannot be exercised until 1 December 2016 and are subject to share price triggers.

After issue of the Convertible Shares and the CPBT Ordinary Shares, the Company will have 23,093,930 Convertible Shares and 224,703,258 Ordinary Shares in issue.

Following the issue of the CPBT Ordinary Shares and the Convertible Shares, the CPBT will hold an interest of 25% in the issued share capital of the Company, with the existing shareholders owning the remaining 75%.

Directors' interests

Following completion of Project Reset and the grant of options under the MIP, the Directors shall have the following holdings in the Company:

* It is intended that Mr Melton will receive options under the MIP to acquire 3,701,953 Ordinary Shares, which shall be subject to performance conditions.

** It is intended that Mr Fouladi will receive options under the MIP to acquire 2,217,693 Ordinary Shares, which shall be subject to performance conditions.

*** It is intended that Mr Pieri will receive options under the MIP to acquire 1,446,281 Ordinary Shares, which shall be subject to performance conditions. In addition, Mr Pieri has been granted options to acquire 2,200,000 Ordinary Shares outside the MIP, of which 1,100,000 options have vested and 1,100,000 are unvested.

Relationship Agreement

As previously announced, the CPBT has entered into a Relationship Agreement with the Company, which sets forth the rights and responsibilities of each in relation to CPBT's holding in the Company, including the right of the CPBT to appoint a director to the Company's board of directors. Massoud Fouladi, currently an executive director of the Company, is the CPBT's initial designated director. 

New Articles of Association

Following the order to sanction the scheme of arrangement, the Company's new articles of association, which were provisionally approved at the Company's AGM in May, have been formally adopted.

The Company's Chairman, Michael Kirkwood, commented: "The completion of this organisational restructuring now fully aligns the interests of our external shareholders and our clinicians, managers and staff in our hospitals. Importantly, our hospital and management colleagues now have a substantive share in our listed company which brings the benefits of value transparency and, when vested, liquidity. The unification of interests also reduces the costs associated with running a parallel equity participation for our staff. The Board believes that the material stake in the business held by our clinical partners demonstrably improves motivation, efficiency and compassionate care to the benefit of our patients and thus to our wider community of stakeholders. I welcome all our partners into the shareholding of the Company."

Dr. Massoud Fouladi, the CPBT's designated director, added: "Today represents the fulfilment of a long-held ambition for our partnership. These organisational changes strengthen our identity and ethos as a co-owned company, and we hope it creates a blueprint for others to follow. I am privileged to act as the partnership's first designated director."

For further information, please contact:

Circle Holdings plc

Michael Kirkwood, Chairman +44(0) 20 7034 5258

Steve Melton, Chief Executive Officer

Gordon Hector, Head of Communications

Numis Securities Limited

Michael Meade, Nominated Adviser +44(0) 20 7260 1000

Alex Ham, Corporate Broking