Development and Management Agreement in China

29 June 2016

Circle Holdings plc

("Circle", the "Company" or "Group")

Development and Management Agreement in China

Circle Holdings plc (LSE: CIRC), the employee co-owned healthcare group, today announces that it has signed a 20-year management agreement with a Chinese investor group to develop and operate a state-of-the-art medical facility in Shanghai. The facility will be positioned as a premium brand within the market and offer a range of primary care, diagnostic and treatment services.  Patients will also have priority access to specialists and secondary care facilities through a unique clinical partnership Circle entered into earlier this year with Ruijin Hospital, one of China's leading state hospitals.  The reciprocal agreement with Ruijin also includes the opportunity for them to access training and research opportunities in the UK provided by or facilitated through Circle.

The investor group, which has committed RMB 200 million (ca. £22 million) to the Shanghai project, includes Taiping Life Insurance, one of the largest state-owned life insurance companies in China, Xinxing development group, a subsidiary of a Fortune 500 state-owned conglomerate and the investment divisions of two other private Chinese businesses. 

Circle will provide development and clinical management services in China under the "Circle Harmony" brand developed as a joint venture with Deep Sea Capital Limited, a Hong Kong-based private investment company.  Under the terms of the agreement, Circle will recover its costs to provide  advisory services during the facility's expected 16-month development phase.  Once the facility is operational in late 2017/early 2018, Circle Harmony will receive an annual profit-share of up to 20% for managing the facility.  Circle Harmony has also received warrants entitling it to acquire an interest in up to 20% of the investor group company prior to any future listing.  Circle expects to provide further details regarding the project's terms and timelines in its H1 2016 results.

The flagship Shanghai project is considered the first of an anticipated future roll-out of further facilities across major cities in China.  

Steve Melton, CEO of Circle, commented:

"The week after Britain voted to leave the EU, this is a reminder that our horizons as a country remain global.

Circle's ambition has certainly always been to work on an international stage. We see this project as the first step in taking our model to one of the most exciting markets for healthcare.

UK healthcare organisations have long been interested in China, for obvious reasons of demography and social change. That interest gathered new momentum with the Thirteenth 5-Year Economic Plan, announced by the Chinese Government in late 2015, which promoted healthcare and public-private partnerships as an area of growth.

But translating that potential into firm projects has sometimes been a challenge.

What marks out this project is the range of organisations involved - particularly with a major insurer like Taiping Life and Ruijin, a leading Chinese state hospital. The Chinese public healthcare system tends to attract its best doctors, and our partnership with Ruijin is a reflection of Circle's reputation as a clinically-led organisation providing excellent, high-end care.

Circle is above all else a partnership - and that spirit of partnership defines this deal. I thank our partners at Deep Sea Capital, Taiping Life, Ruijin, Xinxing and others for the work that has taken us to this stage - and I am excited about the development of this project in coming months and years."

For further information, please contact:

Circle Holdings plc

Michael Kirkwood, Chairman

Steve Melton, Chief Executive Officer                         

Paolo Pieri, Chief Financial Officer

Elizabeth Matthews, Investor Relations Lead

Tel: +44 20 7034 5250

Numis Securities Limited

Michael Meade, Nominated Adviser

Alex Ham, Ben Stoop Corporate Broking

Tel: +44 20 7260 1000