Circle Holdings PLC : Issue of Equity and Capital Reorganisation

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THIS ANNOUNCEMENT INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL.

Circle Holdings plc

("Circle" or the "Company")

Cash placing and subscription to raise £25 million

Introduction

The Company today announces that it intends to raise £25 million by way of a fully underwritten placing of 46,000,000 Placing Shares and a subscription of 4,000,000 Subscription Shares (which is not being underwritten) at a price of 50 pence per new Ordinary Share with institutional shareholders. The Placing and the Subscription are conditional, inter alia, upon Shareholder consent. In addition, the Company has granted an option to Numis under the Placing Agreement in order to meet any additional demand under the Placing (up to 5 million new Ordinary Shares) in the period from the date of this Announcement to 6.00 p.m. on 7 January 2014.

The Company is also announcing plans to award Circle partners with tradable shares in Circle Holdings plc, to be held through a newly formed Circle Partnership Benefit Trust based in the United Kingdom.

Michael Kirkwood, CMG, Chairman of Circle Holdings, commented:

"This placing and subscription strengthens the Group's ability to exploit the available market opportunities. The Board is gratified by the support for the Circle model shown by its investors.

The Board is also delighted to welcome our dedicated employee-partners as direct joint-owners of the business through the quoted company."

Steve Melton, Chief Executive Officer of Circle Holdings, commented:

"This announcement reflects our ambition to seize the growing opportunities in the public and private health markets, building on our solid achievements to date, and we are delighted by the continued confidence we have seen in the future of our business.

Additionally, in simplifying our ownership structure, we will give all employees, including those in NHS facilities, access to our share scheme, aligning incentives across our organisation and continuing to build on our proven track-record of employee-led innovation."

Details

The Company today announces that it intends to raise £25 million by way of a placing of 46,000,000 Placing Shares and a subscription of 4,000,000 Subscription Shares at a price of 50 pence per new Ordinary Share with institutional investors. The Placing and the Subscription are conditional, inter alia, upon Shareholder consent. The Placing is fully underwritten by Numis.

The Extraordinary General Meeting, at which Shareholders will be asked to pass the Placing Resolution necessary to implement the Placing and the Subscription, has been convened for 12.00 noon on 8 January 2014.  Subject to the passing of the Placing Resolution and the Placing Agreement between Numis and the Company becoming unconditional (save only for Admission) it is anticipated that the New Ordinary Shares will be admitted to trading to AIM at 8.00 a.m. on 9 January 2014.

At the EGM, Shareholders will also be asked to pass the Project Reset Resolution which is necessary to implement the proposals known as Project Reset (as more particularly described below).  Under the terms of Project Reset it is proposed that the Company will, pursuant to the Scheme of Arrangement, acquire all of the issued shares of Circle Partnership in exchange for the Consideration Shares to be issued to the New Trustee who will hold these on behalf of the CP Shareholders.  As a result of the implementation of Project Reset, Circle Health (the main operating company within the Group) will become wholly owned by the Company.  The Acquisition is the essential feature of Project Reset, which also involves the issue of the Additional Shares to the New Trustee, the waiver of the Intragroup Debt and the adoption of the MIP and the PIP. The Project Reset Resolution required to implement Project Reset is conditional upon Shareholders passing the Placing Resolution. The Placing Resolution, and therefore the Placing and the Subscription, is not conditional on the Project Reset Resolution being passed.

At this time Project Reset has only been agreed with the CP Board in principle and although good progress is being made with the preparation of the documentation necessary to implement Project Reset, there can be no guarantee that such documentation will be entered into on the terms described in this Announcement or at all. In the event that material changes to Project Reset are required, the Board will, if it is advised necessary, seek Shareholder approval. Project Reset will also be subject to a number of other conditions including the sanction by the BVI Court of the Scheme of Arrangement, CP Shareholder approval, the receipt of certain consents from the JFSC and the receipt of certain statutory and non-statutory tax clearances from HMRC, and therefore Project Reset may not be implemented as currently intended or at all.

The Company has received Irrevocable Undertakings to vote in favour of the Placing Resolutions from Shareholders representing in excess of 64.5 per cent. of the Adjusted Issued Share Capital.

Background to and reasons for the Placing and Subscription

On 10 September 2013, the Company reported its half-year results and provided a trading update noting that, given the growth opportunities in the sector, the Company would consider appropriate options for improving its balance sheet strength over the coming months.  Subsequent to the Results Announcement, the Board has continued to monitor developments in the market and the opportunities available to the Group.  Following consultation with its major Shareholders, it has decided to proceed with the Placing and the Subscription.

In deciding to structure the equity fundraising as a Placing and Subscription, and the price at which the Placing would be made, the Board considered a number of factors including the opportunity to widen the Shareholder base of the Company by introducing new institutional investors, a desire to achieve certainty within the shortest permissible timeframe, the relatively illiquid nature of the Company's shares and the volume weighted average share price at which the Company's shares have traded previously. The Board also took into consideration the fact that Shareholders representing over 90 per cent. of the Existing Issued Share Capital have been given the opportunity to participate in the Placing. In addition, the Company has granted the Option to Numis under the Placing Agreement in order to meet any additional demand under the Placing in the period from the date of this Announcement to 6.00 p.m. on 7 January 2014 (with the agreement of the Company and subject to applicable laws and regulations).

Option to issue further new Ordinary Shares

The Company has granted the Option to Numis under the Placing Agreement in order to give Numis, with the agreement of the Company (and subject to applicable laws and regulations), the flexibility to meet any additional demand under the Placing in the period from the date of this Announcement to 6.00 p.m. on 7 January 2014.

The Option is exercisable on one or more occasions at any time prior to 6.00 p.m. on 7 January 2014. Any Option Shares issued pursuant to the exercise of the Option will be issued on the same terms and conditions as other New Ordinary Shares issued pursuant to the Placing and the Subscription. The Option may be exercised by Numis with the agreement of the Company and there is no obligation on Numis to exercise the Option or to seek to procure subscribers for Option Shares. The maximum number of new Ordinary Shares that may be issued pursuant to the exercise of the Option is 5,000,000 new Ordinary Shares. The maximum number of New Ordinary Shares (including Option Shares) that may be issued pursuant to the Placing and the Subscription is 55,000,000 New Ordinary Shares.

Anticipated use of proceeds

The Group intends to use the proceeds of the Placing and Subscription as follows:

§  c.£19 million will be used for funding the Group's growth including:

§  set-up costs, commissioning and working capital for a mix of up to 3-5 generic service lines and/or hospital franchises;

§  potential expansion into large markets such as Manchester and Birmingham with independent hospitals; and

§  continue to pursue growth opportunity in current operating assets e.g. expansion of service offerings; and

§  c.£6 million will be used for costs associated with the Placing and Subscription, existing working capital/regulatory requirements including funding the existing operations through to EBITDA break even, pre central overheads.

The proceeds will also assist in demonstrating to the Government, NHS and real estate financiers the strength of the Group's balance sheet.

Current trading and outlook

The first half of 2013 saw a period of continued growth and progress for the Group in pursuing its commercial objectives and the Group has continued to progress during the second half of 2013.

Current trading 

The Group continues to trend towards profitability as each asset matures and proves its business model.

Hinchingbrooke

The significant improvements to patient experience and clinical quality in the Group's Hinchingbrooke hospital continue to be sustained and have resulted in increased activity over the past year along with an improved underlying financial performance. The hospital trust generated revenue of £53.9 million for the six month period ended 30 September 2013 (£50.9 million for the same period in 2012). Further, the projected £10 million deficit for the year ended 31 March 2013 was reduced to £3.7 million and the total deficit for the six month period ended 30 September 2013 was £1.16 million (reduced from £4.13 million for the same period in 2012). Consequently, Hinchingbrooke is currently expected to finish at or near break-even by the end of its financial year (being 31 March 2014)

CircleNottingham

Services at CircleNottingham (formerly the Nottingham NHS Treatment Centre) smoothly transitioned to a new five-year contract at the end of July 2013.  This innovative contract is based on developing services for local patients through the introduction of an integrated care approach. The Directors expect profitability under the new contract to rise gradually, from a lower base, as services are reconfigured. The Directors are encouraged that patient volumes under the new contract have remained consistent with the prior year. Accordingly, the Company expects a strong finish to the full-year results. CircleNottingham generated revenue for the 6 month period ended 30 June 2013 of £46.6 million (£43.6 million for the same period ended 30 June 2012) and EBITDA (pre-exceptionals) was £4 million (£2.5 million for the same period in 2012).  The Group is currently constructing a new ten bed inpatient facility which is due to be completed by the end of the first quarter of 2014.

Independent hospitals - CircleBath and CircleReading

As stated in the Results Announcement, CircleBath private revenue growth had seen a slower upturn than expected and since the end of Q1 2013 the focus has been redirected to NHS growth. EBITDA (pre exceptionals) losses of £2.7 million were incurred for the 6 month period ended 30 June 2013, the same as those for the same period in 2012. However, the business has shown continued progression and NHS volumes are now gaining traction with total revenue for August, September and October 2013 up 18 per cent. year-on-year. Total admissions for November are also up 28 per cent. on last year. In addition, clinical outcomes and patient satisfaction levels remain high, with CircleBath commanding an approximately 40 per cent. share of the local orthopaedic (hip, knee, ankle) market.

Revenues also continue to grow at CircleReading as it enters its second year of operation, with revenue growth in August, September, and October 2013 up 156 per cent. year-on-year. Since opening in August 2012, CircleReading has delivered a significant proportion of committed private revenues and EBITDA (pre exceptional) losses for the 6 month period ended 30 June 2013 were £3.4 million.  Since early 2013, the Group has focused on driving NHS revenue growth and margin improvements.  The Group has seen steady progress to date, although some initiatives are approximately 6 months behind plan. Circle has developed patient procedure P&Ls to drive margin improvement and has secured its first NHS block contract for approximately £1.4 million revenue.

Pipeline of NHS opportunities

The NHS continues to face challenges in maintaining quality whilst achieving financial balance; it is believed that between 60-70 NHS Trusts are failing either for financial reasons and/or due to the quality of services being provided. It is expected that the Group's demonstrated ability to transform NHS services in clinical and financial difficulty will continue to strengthen the Group's partnership with the NHS and assist the NHS in meeting these challenges.

The Directors have been encouraged by the vigour with which many of the newly formed CCGs have grasped challenging financial and clinical issues in their regions. This has led to a number of them already tendering for better integrated services that focus on quality as much as value. Currently there are approximately £5 billion of contracts being tendered by the new CCGs.  It is expected that the volume of contracts will rise significantly over the next 18 months as more CCGs acknowledge the issues affecting their local health economies.

The Company believes the Group's clinically led model and previous track record in quality and financial turnarounds will put the Group in a strong position to bid for many of these new tenders.

At a policy level, the Directors believe that the Government will continue to look to the employee co-owned and private sectors for options in reforming many of the existing failing hospitals and specifically those unlikely to achieve Foundation Trust status.  The Department of Health has recently enlisted the assistance of independent provider groups, including Circle, to address the capacity constraints posed by forecasted winter pressures at NHS facilities. The Board considers that this demonstrates that the NHS system is increasingly unable to provide services without assistance from independent providers.

George Eliot Hospital NHS Trust

The Group is currently participating in the procurement for the George Eliot Hospital NHS Trust - "Securing a Sustainable Future" project. The hospital, in Nuneaten Warwickshire, is seeking a potential merger with another NHS Trust or a franchise to secure the long-term sustainability of its services and finances. The major areas of concern are financial performance and clinical quality issues relating to mortality indicators. Based on current market knowledge and management expectations the Board believes that the total contract value would be in the region of £1.2 billion over a 7-10 year contract life.

Preferred Bidder for Musculosketal Service in Bedfordshire

The Group's model of clinical leadership and integrated care has again been endorsed following Circle's selection as "preferred bidder" for the landmark musculoskeletal integrated service in Bedfordshire. The Directors expect the contract to commence at the end of the first quarter of 2014, subject to agreement of the detailed commercial terms.

Capita partnership

The Group's collaboration with Capita, announced on 31 July 2013, combines Circle's clinical and healthcare transformation expertise with Capita's strengths in business process management and professional support services. Circle and Capita elected to withdraw from the Cambridgeshire community services for adults and elderly care procurement process after determining that the proposed terms were not commercially viable.  The Group will re-evaluate its options in respect to this innovative opportunity if the CCG alter the terms of the procurement.  In the meantime, Circle will continue to explore other bidding opportunities to run NHS services with Capita.

Other opportunities

The Group considers that a significant number of other NHS opportunities will arise in 2014 including the possibility of tendering for an additional three franchises at Weston Area Health NHS Trust, Wye Valley NHS Trust and Peterborough and Stamford Hospitals NHS Foundation Trust. In addition, the Group has also submitted a tender qualification for a further service line opportunity with regards to the provision of musculoskeletal services in Sussex. The expected total contract value and contract length of these opportunities are not certain yet but based on current market knowledge and management expectations these could be of substantial value over a five to ten year period. The Group's volumes are currently c.93 per cent. generated by the NHS and the Board considers the Group to be well positioned to take advantage of further NHS opportunities.

Private hospitals

The £3.5 billion private medical insurance market remains a focus for the Group and the Group intends to target another two to four areas to complete its independent hospital strategy with the North West and the West Midlands being the focus of such strategy. The Group is currently in advanced discussion with potential real estate funders on the financing of further hospital developments including CircleManchester and CircleBirmingham. Some of these discussions may result in a wider ongoing refinancing of the Group's properties which may lead to a reduction in the rent at Bath. The Company believes that the Competition Commission's recent proposed remedies to encourage and protect new market entrants should be a positive input to these financing discussions.

Outlook

Developments in the national healthcare market have highlighted more than ever the need for better quality and better value services in both the private healthcare and NHS markets.

The Group remains confident that 2014 will continue to demonstrate financial progression across all sites and significant opportunities for further growth.  The Group is targeting that all current operating assets should be at EBITDA breakeven, pre central overhead, by the end of 2014.

Details of the Placing and the Subscription

The Company proposes to raise approximately £25 million by the issue of 46,000,000 Placing Shares and a subscription of 4,000,000 Subscription Shares to new and existing institutional investors at a price of 50 pence per New Ordinary Share. The New Ordinary Shares (excluding Option Shares) will represent approximately 27.7 per cent. of the Enlarged Issued Share Capital. The Placing Price represents a discount of 27.0 per cent to the closing mid-market price of 68.5 pence per Ordinary Share as at 19 December 2013, being the last practicable date prior to the announcement of the Placing and the Subscription.

In connection with the Placing, the Company has entered into the Placing Agreement pursuant to which Numis has agreed, in accordance with its terms, to use reasonable endeavours to procure subscribers for the Placing Shares , failing which, to subscribe itself for the Placing Shares.

The Placing is conditional, inter alia, on:

§  Shareholders passing the Placing Resolution at the EGM;

§  the Placing Agreement becoming unconditional and not being terminated prior to Admission in accordance with its terms; and

§  Admission becoming effective by no later than 8.00 a.m. on 9 January 2014 (or such later time and date as the Company may agree with Numis, being no later than 10 February 2014).

Your attention is drawn to the detailed terms and conditions of the Placing described in the Appendix to this Announcement (which forms part of this Announcement).

The Placing Agreement contains certain customary warranties given by the Company to Numis as to matters relating to the Group and its business and an indemnity given by the Company to Numis in respect of liabilities arising out of or in connection with the Placing. Numis is entitled to terminate the Placing Agreement in certain circumstances prior to Admission, including, inter alia, a breach of the warranties, the failure of the Company to comply with its obligations under the Placing Agreement the occurrence of certain customary force majeure events any of which, in the good faith opinion of Numis, is material in the context of the Group, the Placing or Admission.

In connection with the Subscription, the Company has entered into the Subscription Agreement pursuant to which a subscriber has agreed to subscribe for all the Subscription Shares at the Subscription Price. The Subscription is conditional, upon (i) the Placing Agreement becoming unconditional in all respects (save for Admission) and not having been terminated in accordance with its terms and (ii) Admission becoming effective by no later than 8.00 a.m. on 9 January 2014 or such later time and date (being no later than 8.00 a.m. on 10 February 2014) as may be notified to the subscriber by the Company.

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective on 9 January 2014 and that dealings in the New Ordinary Shares will commence at 8.00 a.m. on 9 January 2014.

Application has been made for the New Ordinary Shares to be eligible for admission to CREST with effect from Admission. Accordingly, settlement of transactions may take place through CREST if the relevant Shareholder so wishes.

The New Ordinary Shares will be issued credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after Admission and will rank pari passu in all respects with the existing Ordinary Shares. The New Ordinary Shares are not being made available to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.

Project Reset

The Company has also reached agreement in principle with the directors of Circle Partnership on the terms of the Acquisition. Under the terms of Project Reset, the Company shall acquire all of the issued shares of Circle Partnership which owns 49.9 per cent. of the issued share capital of Circle Health.  The Acquisition will be effected by way of a Scheme of Arrangement under BVI law (being the jurisdiction in which Circle Partnership is incorporated) under the terms of which the Company will issue the Consideration Shares to the New Trustee. The New Trustee will hold the Consideration Shares on behalf of the CP Shareholders. After implementation of the Acquisition, it is proposed that the Company and its wholly owned subsidiary, Circle International will waive all of the debt (being approximately £257 million as at 30 November 2013) owed by Circle Health (and its operating subsidiaries) to the Company and Circle International.

In addition to the Consideration Shares which will be issued to the New Trustee to hold on behalf of the CP Shareholders, the Company shall, as part of Project Reset, issue the Additional Shares to the New Trustee (further details of which are set out below).

Accordingly, assuming that immediately prior to completion of the Acquisition, the Company's issued share capital is equal to the Enlarged Issued Share Capital (or if greater the Enlarged Issued Share Capital plus the Option Shares), the New Trustee will on completion of Project Reset hold 25 per cent. of the entire issued share capital of the Company and the remaining 75 per cent. of the issued share capital will be held by the existing Shareholders and those persons who acquire New Ordinary Shares pursuant to the Placing and Subscription.

As mentioned above, the New Trustee will hold 25 per cent. of the Company's entire issued share capital immediately following completion of Project Reset.  This can be further broken down as follows:

§  the Consideration Shares will be equal to approximately 9.6 per cent. of the entire issued share capital of the Company following completion of Project Reset; and

§  the Additional Shares will be equal to approximately 15.4 per cent. of the entire issued share capital following completion of Project Reset.

It is proposed that Additional Shares equal to approximately 4.7 per cent of the entire issued share capital post-Reset (excluding the Option) will be used to satisfy (when exercised) share options granted by the Company following recommendation from the Remuneration Committee under the terms of the MIP and Additional Shares equal to approximately 10.7% of the entire issued share capital post-Reset (excluding the Option) will be used to satisfy (if, or when exercised) share options granted by the Company following recommendation from the Remuneration Committee under the terms of the PIP. It is expected that the majority of the options will be granted under the MIP or the PIP (as appropriate) shortly following completion of Project Reset. However, it is intended that a portion of the Additional Shares will be used to satisfy (if, or when exercised) share options to be granted in the future to new employees and self-employed clinicians as new facilities are built or acquired and/or as future awards to such persons who will be entitled to participate in the MIP and/or the PIP from completion of Project Reset.

In the event that the Company issues any Ordinary Shares after the Placing and Subscription and the implementation of Project Reset, the shareholding of PBT, as with all other Shareholders, may decrease should shares in the Company be issued, in accordance with the provisions of the Articles or the relevant Shareholder authorities, on a non pro-rata basis. However, in the event that Ordinary Shares are issued to the Group's chief financial officer following an exercise of the CFO Options, the Company shall issue to the PBT such number of additional Ordinary Shares as is required to ensure that the interests of the PBT in the Company (as a percentage) immediately prior to such exercise remains the same following the issue of such Ordinary Shares to the chief financial officer.

Background to and reasons for Project Reset

The Board believes that there are compelling reasons for the Company to acquire Circle Partnership and thereby consolidate the ownership of Circle Health on the terms proposed by Project Reset.

The current ownership structure of the Group is overly complex and costly to administer.  Circle Health, together with its operating subsidiaries, is 50.1 per cent. owned by the Company (through its sub-holding company, Circle International) and 49.9 per cent. owned by Circle Partnership.  Circle Partnership operates the Current Share Scheme whereby the Group's employees and self-employed clinicians who work in its facilities have historically acquired an ownership interest in Circle Partnership through annual allocations of CP Shares based on their contributions to the development and growth of the Group's activities. To date, such growth has been funded by the Company and Circle International through shareholder loans to Circle Health (and its subsidiaries), which funding has resulted in a cumulative intragroup debt of approximately £257 million (as at 30 November 2013) being owed by Circle Health and its subsidiaries to the Company and Circle International.  This Intragroup Debt accrues interest of 7 per cent. per annum on a compounding basis.  As a consequence, the value of the CP Shares beneficially owned by the CP Shareholders has not increased in value and is not expected to for the foreseeable future. 

Only when the Intragroup Debt is paid down (or significantly paid down) by Circle Health would Circle Health be in a position to distribute dividends to its shareholders, which then would enable the Circle Partnership to repurchase CP Shares beneficially owned by the Partners.  As a result, although the Company considered the Current Share Scheme to offer a compelling means of creating economic value for Partners when it was originally implemented in 2008, the obligations arising from the Intragroup Debt undermine its effectiveness as an incentivisation scheme for Partners.  In addition, participation in the Current Share Scheme is limited to Group employees and self-employed clinicians.  Project Reset envisages the Company establishing the New Share Scheme to enable the Group to extend ownership to current and future NHS staff working in facilities or in services operated by the Group.   

The Directors believe that the Acquisition and the adoption of the New Share Scheme will align the interests of Shareholders, Group employees, clinicians, and NHS staff, whilst retaining and enhancing the distinctive Circle "partnership" ethos in the business, and will create a simplified group structure comprised of a single listed ownership entity that will be attractive to investors and will facilitate the future growth of the business.

The CP Board has agreed the terms of Project Reset and intends to recommend that the CP Shareholders vote in favour of the proposed Scheme of Arrangement and that to the extent that the CP Shareholders are unable to vote due to being beneficial holders of CP Shares only, that they provide the registered holder of such CP Shares with a positive voting direction.

Each of Dr. Massoud Keyvan-Fouladi, an executive director of the Company and the chairman of Circle Partnership, and Steve Melton, chief executive of the Group and a director of Circle Partnership intends to direct the trustee who operates the Current Share Scheme (being Computershare Trustees (Jersey) Limited) to vote their CP Shares, being, in aggregate, 11.9 per cent. of the current issued share capital of Circle Partnership, in favour of the Scheme of Arrangement.

Financial impact of Project Reset

No changes to the operation of the Group's businesses are anticipated as a result of the implementation of Project Reset.

The estimated £500,000 in cash consideration to be paid for the CP Shares will be used to satisfy the unpaid subscription amounts owed by the CP Shareholders in respect of their CP Shares to the Circle Partnership. This sum will be returned to the Company, net of administrative costs, following the winding up of Circle Partnership, which shall occur following completion of Project Reset.

It is intended as part of Project Reset that the Intragroup Debt will be cancelled. As this will be an intragroup transaction it will not have an impact on the consolidated net assets of the Group. The Group intends to fund the on-going administrative costs associated with the New Trustee and the Partnership Benefit Trust which are estimated to be £100,000 per annum less than those incurred under the current structure. The Directors consider that the Group will realise significant savings and administrative efficiencies by virtue of Circle Health and the Group's operating subsidiaries becoming wholly owned by the Company.

Implementation of Project Reset

The central aspect of Project Reset will be implemented by way of a recommended Scheme of Arrangement whereby the Company will acquire all of the CP Shares.  Upon completion of the Acquisition, Circle Health will become a wholly owned subsidiary of the Company. 

The Scheme of Arrangement will require the approval of CP Shareholders at the Circle Partnership EGM. The Scheme of Arrangement will also be conditional on the following conditions being satisfied:

§  the passing of the Placing Resolution (if not already passed);

§  the passing of the Project Reset Resolution (if not already passed);

§  the receipt of certain statutory and non-statutory tax clearances from HMRC;

§  the receipt of certain consents from JFSC;

§  the approval of the BVI Court;

§  the approval of the CP Board;

§  the approval of the Board of the Company; and

§  such other conditions as shall be imposed by the BVI Court in its absolute discretion.

In the event that any of these conditions is not satisfied on or before 31 May 2014 (or such later date as may be agreed between the Company and Circle Partnership (with, where applicable, the approval of the BVI Court) Project Reset will not be implemented.

As the Partnership Benefit Trust will hold 25 per cent. of the issued share capital of the Company following implementation of Project Reset, it is proposed that, subject to agreement of its terms with the Board, that the PBT and the Company will enter into a relationship agreement.

Timetable

It is intended that the Scheme of Arrangement will be submitted to the BVI Court for initial consideration following the passing of the Project Reset Resolution, receipt of certain statutory and non-statutory tax clearances from HMRC and receipt of certain consents from JFSC. It is currently expected that these approvals will have been received by mid to late January 2014. Following submission to the BVI Court, a document containing details about the Scheme of Arrangement will be distributed to CP Shareholders which will contain a notice convening the Circle Partnership EGM, and assuming the relevant resolutions are passed by the CP Shareholders, a final BVI Court hearing will then be required to approve the Acquisition. It is expected that the timetable for the Scheme of Arrangement will take approximately 8-10 weeks following the initial BVI Court hearing and accordingly, assuming that all conditions are satisfied, that the Scheme of Arrangement will be completed no later than 31 May 2014.

CFO Options

In addition to the Additional Shares to be issued to the New Trustee as part of Project Reset, the Company has agreed to grant to the Group's chief financial officer, Paolo Pieri, options to subscribe for 2,200,000 Ordinary Shares at an exercise price of £0.02 per Ordinary Share. This separate incentive arrangement has been agreed as Mr Pieri is not a participant of the Current Share Scheme nor has he previously received as remuneration any shares or options in the Company since joining in 2010. The CFO Options shall vest over a two year period, with half of the CFO Options vesting on 1 December 2014 and the balance on 1 December 2015.

It is intended that the new Ordinary Shares to be issued upon exercise of the CFO Options shall not dilute the PBT's interest in the Company. Accordingly, upon exercise of the CFO Options, the Company shall issue to the PBT such number of additional Ordinary Shares as is required to ensure that the interests of the PBT in the Company (as a percentage) immediately prior to such exercise remains the same following the issue of such Ordinary Shares.

Related party transaction

Project Reset

By virtue of its 49.9 per cent. holding in Circle Health, the Circle Partnership is considered to be a "related party" as defined under the AIM Rules and accordingly the Acquisition will constitute a related party transaction for the purposes of Rule 13 of the AIM Rules. Accordingly, the Independent Directors, having consulted with the Company's nominated adviser, Numis, consider that the terms of the Acquisition are fair and reasonable insofar as Shareholders are concerned.

The Placing

Lansdowne, which has an interest in 37,967,008 Ordinary Shares (representing an interest of 29.1 per cent. of the Existing Issued Share Capital) has indicated an intention to subscribe for 16,200,000 Placing Shares at the Placing Price. Assuming Lansdowne participates in the Placing, immediately upon Admission, Lansdowne will be interested in 29.96 per cent. of the Enlarged Issued Share Capital.

Invesco, which has an interest in 30,368,920 Ordinary Shares (representing an interest of 23.2 per cent. of the Existing Issued Share Capital) has indicated an intention to subscribe for 22,900,000 Placing Shares at the Placing Price. Assuming Invesco participates in the Placing, immediately upon Admission, Invesco will be interested in 29.47 per cent. of the Enlarged Issued Share Capital.

By virtue of their current interests in the Company both Lansdowne and Invesco are considered to be "related parties" as defined under the AIM Rules and accordingly their participation in the Placing would constitute separate related party transactions for the purposes of Rule 13 of the AIM Rules. Accordingly, for the purposes of the AIM Rules, the Directors, having consulted with the Company's nominated adviser, Numis, consider that the terms on which Lansdowne and Invesco are proposing to participate in the Placing to be fair and reasonable insofar as Shareholders are concerned.

Irrevocable voting undertakings

The Company has received Irrevocable Undertakings to vote in favour of the Resolutions to be proposed at the EGM from certain Shareholders holding, in aggregate, in excess of 64.5 per cent. of the Adjusted Issued Share Capital.

Importance of Vote

If the Placing Resolution is not passed by Shareholders, the Placing and the Subscription will not proceed and in these circumstances the Company would need to pursue alternative sources of funding and may also need to consider disposing of certain assets in order to fund the Company's ongoing working capital requirements. The Directors would also need to revise their growth plans in respect of pursuing further NHS and independent opportunities.

If the Project Reset Resolution is not passed by Shareholders, Project Reset will not proceed and the Directors and the CP Board will need to consider other alternative incentive schemes for the Group's employees, NHS staff and self-employed consultants working at the Group's facilities.

Shareholder Approval

The Placing and the Subscription are conditional upon, inter alia, Shareholder approval. A circular will be posted to Shareholders by no later than tomorrow, providing further details of the Placing and the Subscription and incorporating a notice convening the Extraordinary General Meeting at which the Resolutions will be proposed. The Board considers that the Placing and the Subscription are in the best interests of the Company and the Shareholders as a whole, and intends to recommend that Shareholders vote in favour of the Resolutions.

The Extraordinary General Meeting will be held at the offices of Lawrence Graham LLP, 4 More London Riverside, London, SE1 2AU at 12.00 noon on 8 January 2014.

The Company will also make copies of the Circular all of which will be sent to Shareholders at the same time as the Circular, available on its website at www.circleholdingsplc.com.

For further information, please contact:

For further information, please contact:

Circle Holdingsplc		[phone]
Steve Melton, Chief Executive Officer Paolo Pieri, Chief Financial Officer Tom Muir, Head of Communications
	Numis Securities Limited		[phone]
	Michael Meade/Richard Thomas, Nominated Adviser Alex Ham/Ben Stoop, Corporate Broking

PLACING AND SUBSCRIPTION STATISTICS

Number of Ordinary Shares in issue at the date of this announcement	130,785,122
Placing Price	50 pence
Number of Placing Shares to be issued pursuant to the Placing	46,000,000
Number of Subscription Shares to be issued pursuant to the Subscription	4,000,000
Maximum number of Option Shares to be issued pursuant to the Option	5,000,000
Number of Ordinary Shares in issue immediately upon Admission (assuming no Option Shares are issued)	180,785,122
Number of Ordinary Shares in issue immediately upon Admission (assuming the maximum number of Option Shares are issued)	185,785,122
Placing Shares as a percentage of the Enlarged Issued Share Capital (assuming no Option Shares are issued)	27.7 per cent
Placing Shares as a percentage of the Enlarged Issued Share Capital (assuming the maximum number of Option Shares are issued)	29.6 per cent
Gross proceeds of the Placing and the Subscription (assuming no Option Shares are issued)	£25.0 million
Gross proceeds of the Placing and the Subscription (assuming the maximum number of Option Shares are issued)	£27.5 million
Estimated net proceeds of the Placing and the Subscription receivable by the Company (assuming no Option Shares are issued)	£23.9 million
Estimated net proceeds of the Placing and the Subscription receivable by the Company (assuming the maximum number of Option Shares are issued)	£26.3 million

PROJECT RESET STATISTICS

Total number of Reset Shares to be issued pursuant to Project Reset(1)		60,261,707
Total issued share capital of the Company immediately following Project Reset(1)		241,046,829
Reset Shares as a percentage of the total issued share capital of the Company immediately following completion of Project Reset(1)		25 per cent.
Ordinary Shares not held by the New Trustee as a percentage of the total issued share capital of the Company immediately following completion of Project Reset(1)		75 per cent.

(1)Assumes the issued share capital of the Company immediately prior to completion of Project Reset is 180,785,122 Ordinary Shares and accordingly that (i) Numis does not exercise the option over the Option Shares; (ii) the CFO Options to subscribe for 2,200,000 Ordinary Shares granted to the Group's chief financial officer have not been exercised; and (iii) none of the Warrants have been exercised. It is agreed that following the exercise of the CFO Options, the Company shall issue to the PBT such number of additional Ordinary Shares as is required to ensure that the interests of the PBT in the Company (as a percentage) immediately prior to such exercise remains the same following the issue of such Ordinary Shares. Other than in the event that Ordinary Shares are issued pursuant to the exercise by Numis of the Option, all other future issues of share capital, including the exercise of the outstanding Warrants, will dilute all shareholdings on a pro rata basis.

Definitions

The following definitions apply throughout this Announcement unless the context requires otherwise.

"Acquisition"                                                     the proposed acquisition by the Company of all of the issued shares of Circle Partnership pursuant to the Scheme of Arrangement and as part of Project Reset

"Additional Shares"                                         the new Ordinary Shares to be issued to the New Trustee, in its capacity as trustee of the Partnership Benefit Trust, as part of Project Reset which, subject to the terms of the PBT, will be used to satisfy the exercise, over time, of options granted to employees of the Group as well as consultants and NHS staff working in facilities or services operated by the Group pursuant to the MIP and/or the PIP

"Adjusted Issued Share Capital"                 the Existing Issued Share Capital less such number of Ordinary Shares which has been agreed with  the Company will not be cast at the EGM

"Admission"                                                     the admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules

"AIM"                                                                   the market of that name operated by London Stock Exchange

"AIM Rules"                                                       the AIM Rules for Companies, which sets out the rules and responsibilities for companies listed on AIM, as amended from time to time

"Board" or "Directors"                                     the board of directors of the Company

"BVI"                                                                   British Virgin Islands

"BVI Court"                                                        High Court of Justice of the Eastern Caribbean Supreme Court of the British Virgin Islands

"Capita"                                                             Capita Business Services Limited

"Circular"                                                           the circular which is expected to be posted today in respect of the Placing and Subscription and Project Reset

"CCG"                                                                Clinical Commissioning Group

"CFO Options"                                                 options to acquire, in aggregate, 2,200,000 Ordinary Shares granted to the Group chief financial officer, further details of which will be set out in the circular

"Circle Health" or "Circle"                              Circle Health Limited, a company incorporated in England and Wales with registered number 05042771

"CircleBath"                                                      Circle's independent hospital at Foxcote Avenue, Peasdown St John, Bath, BA2 8SQ

"CircleBirmingham"                                        Circle's proposed independent hospital to be built at the land at Pebble Mill, Edgbaston, Birmingham which is conditional upon various matters including financing and planning consents

"CircleManchester"                                         Circle's proposed independent hospital to be built at The Avenue, Didsbury Point, Manchester M20 2EU which is conditional upon various matters including financing and planning consents

"CircleNottingham"                                         Circle's treatment centre at Lister Road, Nottingham N67 2FT

"CircleReading"                                               Circle's independent hospital at Drake Way, Reading RG2 0NE

"Circle International"                                       Circle International plc, a company incorporated in England and Wales, with registered number 05255440

"Circle Partnership" or "Partnership"          Circle Partnership Limited, a company incorporated in the BVI

"Circle Partnership EGM"                              the extraordinary general meeting of Circle Partnership convened at the direction of the BVI Court to consider the Scheme of Arrangement

"Company" or "Circle Holdings"                   Circle Holdings PLC, a company incorporated and registered in Jersey with registered number 100016

"Consideration Shares"                                 the Convertible 2015 Shares and the Convertible 2017 Shares proposed to be issued, fully paid, to the New Trustee on behalf of the CP Shareholders as consideration under the terms of the Acquisition and as part of Project Reset

"CP Board"                                                       the board of directors of Circle Partnership

"CP Shares"                                                     A ordinary shares of 1 penny each in Circle Partnership

"CP Shareholders"                                         the registered holders of the CP Shares, or where the context so requires, the beneficial owners of the CP Shares being the Partners and Health Trust

"CREST"                                                           a relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations)

"Current Share Scheme"                               the current share scheme operated within Circle Partnership

"EGM" or "Extraordinary General Meeting"

the extraordinary general meeting of the Company convened for 12.00 noon on 8 January 2014 (and any adjournment thereof)

"Enlarged Issued Share Capital"                 the issued ordinary share capital of the Company, being 180,785,122 Ordinary Shares, as enlarged by the Placing (assuming no Option Shares are issued) and the Subscription immediately following Admission

"Group"                                                              the Company and its subsidiary undertakings

"Hinchingbrooke"                                            Hinchingbrooke Health Care NHS Trust

"HMRC"                                                             HM Revenue & Customs

"Independent Directors"                                Michael Kirkwood, Lorraine Baldry, Tim Bunting, Andrew Shilston and Anthony Bromovsky, being Directors who shall not receive Consideration Shares and/or be granted awards under the MIP and/or the PIP

"Intragroup Debt"                                             the sum of approximately £257 million owed by Circle Health and its subsidiaries to the Company and Circle International

"Invesco"                                                           Invesco Asset Management Limited acting as agent and discretionary manager for and on behalf of its discretionary managed clients

"Irrevocable Undertakings"                           the undertakings and/or letters of intent given by Shareholders, who hold in aggregate, 66,623,898 Ordinary Shares (representing 64.5 per cent. of the Adjusted Issued Share Capital of the Company) to vote in favour of the Resolutions at the EGM

"JFSC"                                                               the Jersey Financial Services Commission

"Lansdowne"                                                   together Lansdowne Developed Markets Master Fund Limited, Lansdowne UK Strategic Investment Master Fund Limited, Lansdowne UK Equity Fund Limited and Lansdowne UK Fund Equity LP

"London Stock Exchange"                             London Stock Exchange plc

"MIP"                                                                  the proposed management incentive plan details of which will be set out in the circular

"New Ordinary Shares"                                  the Placing Shares, the Option Shares (if any) and the Subscription Shares

"New Share Scheme"                                    the MIP and the PIP which are to be adopted by the Company as part of Project Reset

"New Trustee"                                                  Circle Partnership Trustee Limited, which shall, be: (i) the legal and registered shareholder of the Consideration Shares (together with any Ordinary Shares arising out of any conversion of the Consideration Shares); and (ii) hold the Additional Shares (as the trustee of the Partnership Benefit Trust), on the terms of the PBT

"NHS"                                                                the National Health Service of the United Kingdom

"NHS Trust"                                                      an NHS trust that is part of the NHS in England

"Numis"                                                             Numis Securities Limited, a company incorporated in England and Wales

"Ordinary Shares"                                           ordinary shares of £0.02 each in the capital of the Company

"Option"                                                             the option granted to Numis by the Company under the Placing Agreement pursuant to which Numis has the right up to 7 January 2014 to require the Company to allot the Option Shares to placees

"Option Shares"                                               the up to 5,000,000 new Ordinary Shares to be issued by the Company following the exercise of the Option by Numis

"Partnership Benefit Trust" or "PBT"            a new trust to be established and resident in the United Kingdom with the New Trustee as its trustee which will hold the Additional Shares on the terms of this trust

"PIP"                                                                   the proposed partnership incentive plan

"Placing"                                                           the proposed placing by the Company of the Placing Shares and the Option Shares (if any) at the Placing Price

"Placing Agreement"                                      the agreement between the Company and Numis dated 20 December 2013 in relation to the Placing

"Placing Price"                                                 the price of 50 pence per Placing Share and/or Option Share

"Placing Resolution"                                      resolution number 1 to be set out in the Notice of EGM seeking Shareholders' consent to disapply pre-emption rights under the Existing Articles

"Placing Shares"                                             the 46,000,000 new Ordinary Shares (excluding the Option Shares) to be issued pursuant to the Placing

"Project Reset"                                                the proposed restructuring of the Group whereby it is proposed that the Company will, pursuant to the Scheme of Arrangement, acquire all of the issued shares of Circle Partnership, issue the Additional Shares, waive the Intragroup Debt and adopt the MIP and the PIP, further details of which will be set out in the circular

"Project Reset Resolution"                           resolution numbered 2 to be set out in the Notice of EGM seeking Shareholder approval of various matters necessary to implement Project Reset

"Remuneration Committee"                         the committee of Directors responsible for the Group's remuneration policy

"Reset Shares"                                                the Consideration Shares and the Additional Shares

"Resolutions"                                                   the Placing Resolution and the Project Reset Resolution

"Results Announcement"                              the announcement made via a Regulatory Information Service by the Company at 7.00 a.m. on 10 September 2013 regarding the Group's unaudited results for the year ended 30 June 2013

"Scheme of Arrangement"                             the proposed scheme of arrangement, to be sanctioned by the BVI Court, whereby the Acquisition will be affected

"Securities Act"                                                the US Securities Act of 1933, as amended

"Shareholders"                                                the persons who are registered as the holders of Ordinary Shares

"Subscription"                                                  the proposed subscription for the Subscription Shares at the Subscription Price

"Subscription Agreement"                             the conditional agreement dated 20 December 2013 in relation to the Subscription

"Subscription Price"                                        the price of 50 pence per Subscription Share

"Subscription Shares"                                    the 4,000,000 new Ordinary Shares to be issued pursuant to the Subscription

"United Kingdom" or "UK"                             the United Kingdom of Great Britain and Northern Ireland

"United States" or "US"                                  the United States of America, its territories and possessions and the District of Columbia

"Warrants"                                                        warrants issued by the Company entitling the holders to subscribe for, in aggregate, 3,623,005 Ordinary Shares of which 3,384,075 warrants are exercisable at £1.52 each and 238,930 are exercisable at £10.31 each

Important Information

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY AT RELEVANT PERSONS (AS DEFINED IN THE APPENDIX). THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT, CONTROLLED INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

Persons who are invited to and who choose to participate in the Placing, by making an oral or written offer to subscribe for the Placing Shares and/or the Option Shares, will be deemed to have read and understood this Announcement (including the Appendix) in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings, contained in the Appendix.

The distribution of this Announcement in certain jurisdictions may be restricted by law. Persons into whose possession this Announcement comes should inform themselves about and observe any restrictions on the distribution of this Announcement. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions. Persons receiving this Announcement should not distribute or send it into any jurisdiction where to do so would or might contravene local securities laws or regulations.

This Announcement is not for publication, release or distribution, directly or indirectly, in whole or in part, in or into the United States, Australia, Canada, Japan or South Africa or any jurisdiction in which the same would be unlawful. Neither the Placing Shares nor the Option Shares have been and will not be registered under the Securities Act or under any state securities laws, and may not be offered or sold within the United States unless registered under the Securities Act or pursuant to an applicable exemption from, or as part of a transaction not subject to, the registration requirements of the Securities Act. Neither the Placing Shares nor the Option Shares have been and will not be registered under the applicable securities laws of Canada, Australia, South Africa or Japan and subject to certain exceptions, the Ordinary Shares may not be offered or sold in Canada, Australia, South Africa or Japan or to, or for the account or benefit of, any resident of Canada, Australia, South Africa or Japan. There will be no public offer of securities in the United States, Canada, Australia, South Africa, Japan, the United Kingdom or elsewhere.

This Announcement is for information purposes only and does not constitute or form part of an offer to sell or issue or the solicitation of an offer to subscribe for or buy, any Placing Shares or any Option Shares in the United States or any other jurisdiction in which, such sale, offer or solicitation is unlawful. In particular, this Announcement is not for publication, release or distribution, in whole or in part, in or into the United States, Canada, Australia, South Africa or Japan.

This Announcement has been issued by Circle and is the sole responsibility of Circle. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Numis or by any of its respective affiliates or agents as to or in relation to the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Numis, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for the Company and for no-one else in connection with the contents of this Announcement, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Numis, or for providing advice in relation to the contents of this Announcement or any matters referred to herein.

The contents of this Announcement are not to be construed as legal, financial or tax advice. If necessary, each recipient of this Announcement should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Statements contained in this Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this Announcement is subject to change without notice, and neither Numis nor, except as required by applicable law, the Company assumes any responsibility or obligation to update publicly or review any of forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Announcement. No statement in this Announcement is or is intended to be a profit forecast or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company. The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

The Appendix to this Announcement (which forms part of this Announcement) sets out the terms and conditions of the Placing.

APPENDIX: TERMS AND CONDITIONS OF THE PLACING

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION IN IT, IS RESTRICTED, AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

Members of the public are not eligible to take part in the Placing.

This Announcement and the terms and conditions set out herein are for information purposes only and are directed only at: (a) persons in Member States of the European Economic Area who are qualified investors as defined in Section 86(7) of the Financial Services and Markets Act 2000, as amended, ("Qualified Investors") being persons falling within the meaning of Article 2(1)(e) of the EU Prospectus Directive (which means Directive 2003/71/EC and includes any relevant implementing directive measure in any Member State), as amended (the "Prospectus Directive"); (b) in the United Kingdom, Qualified Investors who are persons who (i) have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of the Order; and (iii) are persons to whom it may otherwise be lawfully communicated (all such persons together being referred to as "Relevant Persons"). This Appendix and the terms and conditions set out herein must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this Appendix and the terms and conditions set out herein relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

This Announcement is not an offer of or solicitation to purchase or subscribe for securities in the United States. The Placing Shares and the Option Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or any laws of, or with any securities regulatory authority of, any state or other jurisdiction of the United States, and may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. No public offering of securities is being made in the United States. The Placing Shares and the Option Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act ("Regulation S"). Neither the US Securities and Exchange Commission nor any securities regulatory authority of any state or other jurisdiction of the United States has approved or disapproved of an investment in the Placing Shares and/or the Option Shares or passed upon or endorsed the merits of the placing or the accuracy or adequacy of the contents of this Announcement. Any representation to the contrary is a criminal offense in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in this Announcement, will not be accepted.

Each prospective Placee (as defined below) should consult with its own advisers as to legal, tax, business and related aspects of an investment in the Placing Shares and/or the Option Shares before making an investment decision.

Persons who are invited to and who choose to participate in the Placing, by making (or on whose behalf there is made) an oral or written offer to subscribe for Placing Shares and/or Option Shares (the "Placees"), will be deemed to have read and understood this Announcement, including this Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular, each such Placee represents, warrants and acknowledges that:

1.            it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares and/or Option Shares that are allocated to it for the purposes of its business;

2.            in the case of any Placing Shares and/or Option Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the Placing Shares and/or Option Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of Numis has been given to the offer or resale; or (ii) where Placing Shares and/or Option Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares and/or Option Shares to it is not treated under the Prospectus Directive as having been made to such persons; and

3.            (a) (i) it is outside the United States and (ii) it is not acting for the account or benefit of a person in the United States; (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S; or (c) it is otherwise acquiring the Placing Shares and/or Option Shares in an "offshore transaction" within the meaning of, and pursuant to, Regulation S.

The Company and Numis will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements.

This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares and/or Option Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Australia, Canada, Japan or the Republic of South Africa or in any other jurisdiction in which such publication or distribution would be unlawful. Persons into whose possession this Announcement may come are required by the Company to inform themselves about and to observe any restrictions of transfer of this Announcement. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and none of the Placing Shares nor the Option Shares have been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, none of the Placing Shares nor the Option Shares may (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the Announcement of which it forms part should seek appropriate advice before taking any action.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) on whose behalf a commitment to subscribe for Placing Shares and/or Option Shares has been given.

Details of the Placing Agreement, the Placing Shares and the Option Shares

Numis has entered into a Placing Agreement with the Company under which Numis has, on the terms and subject to the conditions set out therein, undertaken to use its reasonable endeavours to procure as agent for the Company, subscribers for the Placing Shares, failing which Numis shall subscribe for the same at the Placing Price. The Company has granted the Option to Numis under the Placing Agreement in order to give Numis, with the agreement of the Company (and subject to applicable laws and regulations), the flexibility to meet any additional demand under the Placing. The Placing Agreement contains certain customary representations and warranties given by the Company to Numis as to matters relating to the Group and its business and an indemnity given by the Company to Numis in respect of liabilities arising out of or in connection with, inter alia, the Placing.

The Placing Shares and the Option Shares (if any) will, when issued, be credited as fully paid and will rank pari passuin all respects with the existing issued Ordinary Shares including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of the Ordinary Shares by reference to a record date falling on or after the date of issue of the Placing Shares and the Option Shares (if any).

The Company, subject to certain exceptions including any issue or grant of securities to effect Project Reset, has agreed not to allot, issue or grant any rights in respect of any of its Ordinary Shares in the period of 12 months after the date of Admission without Numis's prior consent, such consent not to be unreasonably withheld or delayed.

Details of the Option

The Company has granted the Option to Numis under the Placing Agreement in order to give Numis, with the agreement of the Company (and subject to applicable laws and regulations), the flexibility to meet any additional under the Placing in the period from the date of this Announcement to 6.00 p.m. on 7 January 2014

The Option is exercisable on more than one occasion at any time prior to 6.00 p.m. on 7 January 2014. Any Option Shares issued pursuant to the exercise of the Option will be issued on the same terms and conditions as the Placing Shares issued pursuant to the Placing and the Subscription. The Option may be exercised by Numis with the agreement of the Company and there is no obligation on Numis to exercise the Option or to seek to procure subscribers for Option Shares or subscribe for any Option Shares itself. The maximum number of Option Shares that may be issued pursuant to the exercise of the Option is 5,000,000 Option Shares.

Application for admission to trading on AIM

Application will be made to the London Stock Exchange for Admission. It is expected that settlement of any such shares and Admission will become effective on or around 8.00 a.m. on 9 January 2014 and that dealings in the Placing Shares and the Option Shares will commence at that time.

Participation in, and principal terms of, the Placing

4.            This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares or any Option Shares.

5.            The placing price will be 50 pence per Placing Share and Option Share.

6.         An offer to acquire Placing Shares and/or Option Shares, which has been communicated by a prospective Placee to Numis which has not been withdrawn or revoked prior to publication of this announcement shall not be capable of withdrawal or revocation immediately following the publication of this announcement without the consent of Numis.

7.         Each Placee's allocation will be agreed by Numis and the Company and will be confirmed orally or in writing by Numis following publication of this announcement. Numis' oral or written confirmation of an allocation will give rise to a legally binding commitment (the "Placing Commitment") by the Placee concerned, in favour of Numis and the Company, under which it agrees to acquire the number of Placing Shares and/or Option Shares allocated to it at the Placing Price and otherwise on the terms and subject to the conditions set out in this Appendix and the Company's articles of association. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Numis, to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares and/or Option Shares comprised in such Placee's Placing Commitment.

8.         Each prospective Placee's Placing Commitment will be evidenced by a contract note issued to such Placee by Numis as soon as practicable following Numis' oral or written confirmation of the relevant Placee's allocation. The terms of this Appendix will be deemed incorporated therein.

9.            Except as required by law or regulation, no press release or other announcement will be made by Numis or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

10.          Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares and/or Option Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

11.          All obligations under the Placing will be subject to fulfilment or (where applicable) waiver of, amongst other things, the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".

12.          By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

13.          To the fullest extent permissible by law, none of the Company, Numis or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise of these terms and conditions). Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares and/or Option Shares to the Placees, and Numis shall have no liability to the Placees for the failure of the Company to fulfil those obligations. In particular, none of the Company, Numis or any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Numis's conduct of the Placing.

Conditions of the Placing

Numis's obligations under the Placing Agreement in respect of the Placing Shares and the Option Shares are conditional on, inter alia:

(a)        none of the warranties contained in the Placing Agreement being untrue, inaccurate or misleading as at the date of the Placing Agreement and the Closing Date as though they had been given and made on such dates (by reference to the facts and circumstances existing at such dates); (b)        the Company allotting, subject only to Admission, the Placing Shares and/or Option Shares (if any) in accordance with the Placing Agreement and the Company having allotted the Subscription Shares in accordance with the Subscription Agreement; (c)        the passing of the Placing Resolution without amendment; (d)        Admission taking place not later than 8.00 a.m. on 9 January 2014 or such later date as the Company and Numis may otherwise agree but not being later than 8.00 a.m. on 10 February 2014 (the "Long Stop Date"); and (e)        in the good faith opinion of Numis, there having been since the date of the Placing Agreement no Material Adverse Change (as defined in the Placing Agreement), whether or not foreseeable at the date of the Placing Agreement.

If (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares and the Option Shares (if any) are not fulfilled or waived by Numis by the respective time or date where specified (or such later time or date as the Company and Numis may agree), (ii) any of such conditions becomes incapable of being fulfilled or (iii) the Placing Agreement is terminated in the circumstances specified below, the Placing in relation to the Placing Shares and the Option Shares (if any) will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares and the Option Shares (if any) shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

Numis may, at its discretion and upon such terms as it thinks fit, waive or extend the period (subject to the Long Stop Date) for compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement, save that the above condition relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Neither Numis nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally. By participating in the Placing, each Placee agrees that any such decision is within the absolute discretion of Numis.

Right to terminate under the Placing Agreement

Numis is entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia, a breach of the warranties given to Numis in the Placing Agreement, the failure of the Company to comply with obligations under the Placing Agreement or, the occurrence of a force majeureevent which, in each of the circumstances described in the Placing Agreement is in the good faith opinion of Numis, is material in the context of the Group, the Placing, the Subscription or Admission. Following Admission, the Placing Agreement is not capable of termination.

The rights and obligations of the Placees shall terminate only in the circumstances described in the Placing Agreement and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by Numis of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Numis, and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise.

No Admission Document or Prospectus

The Placing Shares and the Option Shares are being offered to a limited number of specifically invited persons only, and will not be offered in such a way as to require an admission document or prospectus in the United Kingdom or in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the UK Financial Conduct Authority in relation to the Placing, and Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix) and the Exchange Information (as defined further below). Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty or statement made by or on behalf of the Company or Numis or any other person. Neither Numis nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. If given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by Numis, the Company, or their respective officers, directors, employees or agents. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Neither the Company nor Numis are making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares and/or the Option Shares by such Placee under any legal, investment or similar laws or regulations. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares and or the Option Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement

Settlement of transactions in the Placing Shares and the Option Shares (if any) (ISIN: JE00B4V99J57) following Admission will take place within CREST, subject to certain exceptions. Numis reserves the right to require settlement for, and delivery of, the Placing Shares and the Option Shares (if any) (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

Each Placee allocated Placing Shares and/or Option Shares in the Placing will be sent a trade confirmation or contract note in accordance with the standing arrangements in place with Numis, stating the number of Placing Shares and/or Option Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Numis and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with Numis.

It is expected that settlement will be on 9 January 2014 in accordance with the instructions set out in the trade confirmation.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Numis.

Each Placee is deemed to agree that, if it does not comply with these obligations, Numis may sell any or all of the Placing Shares and/or Option Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Numis's account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it, and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares and/or Option Shares on such Placee's behalf. By communicating a bid for Placing Shares and/or Option Shares, each Placee confers on Numis all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Numis lawfully takes in pursuance of such sale.

If Placing Shares and/or Option Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares and/or Option Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares and/or Option Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax or securities transfer tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, warranties and further terms

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to the Company and Numis:

2.            acknowledges that no offering document, admission document or prospectus has been prepared in connection with the Placing and represents and warrants that it has not received and will not receive a prospectus, admission document or other offering document in connection therewith;

3.            acknowledges that the Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules for Companies (collectively "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and the Company's announcements and circulars published in the past 12 months and the Company's AIM admission document and that it is able to obtain or access such information without undue difficulty and has read and understood the Exchange Information;

4.            acknowledges that none of Numis or the Company, or any of their respective affiliates or any person acting on behalf of any of them has provided it, and will not provide it, with any material regarding the Placing Shares and/or Option Shares or the Company other than this Announcement, nor has it requested any of Numis, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

5.            acknowledges that the content of this Announcement is exclusively the responsibility of the Company, and that none of Numis, its affiliates or any person acting on its or their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or concurrently published by or on behalf of the Company, and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares and/or Option Shares is contained in this Announcement and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and/or Option Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by Numis or the Company, or, if received, it has not relied upon any such information, representations, warranties or statements (including any management presentation that may have been received by any prospective Placee), and neither Numis nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied solely on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing and it will not rely on any investigation that Numis, its affiliates or any other person acting on its or their behalf has or may have conducted;

6.            represents and warrants that it has neither received nor relied on any confidential price sensitive information concerning the Company in accepting this invitation to participate in the Placing;

7.            acknowledges that none of Numis, any person acting on behalf of it or them, or any of its affiliates has or shall have any liability for the Exchange Information, any publicly available or filed information or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

8.            represents and warrants that (a) (i) it is outside the United States; and (ii) it is not acting for the account or benefit of a person in the United States; (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S; or (c) it is otherwise acquiring the Placing Shares and/or the Option Shares in an "offshore transaction" within the meaning of, and pursuant to, Regulation S;

9.            acknowledges that neither the Placing Shares nor the Option Shares have been or will be registered under the Securities Act or with any state or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares or the Option Shares (if any) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

10.          represents and warrants that it will not reoffer, resell, pledge or otherwise transfer the Placing Shares and/or the Option Shares except in an "offshore transaction" within the meaning of, and pursuant to, Regulation S, and that such reoffer, resale, pledge, or transfer will be made in accordance with any applicable securities laws of any state or jurisdiction of the United States;

11.          unless otherwise specifically agreed in writing with Numis, represents and warrants that neither it nor the beneficial owner of such Placing Shares or Option Shares will be a resident of Australia, Canada, Japan or the Republic of South Africa;

12.          acknowledges that neither the Placing Shares nor the Option Shares have been or will be registered under the securities legislation of Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;

13.          represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares and/or Option Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that neither the Placing Shares nor the Option Shares are being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares and/or the Option Shares into a clearance system;

14.          represents and warrants that: (i) it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007; and (ii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the "Regulations"); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to Numis such evidence, if any, as to the identity or location or legal status of any person which Numis may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Numis on the basis that any failure by it to do so may result in the number of Placing Shares and/or Option Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Numis may decide at its sole discretion;

15.          if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents and warrants that the Placing Shares and/or Option Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of Numis has been given to the offer or resale;

16.          represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares and/or Option Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA;

17.          represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares and/or Option Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);

18.          represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the Placing Shares and/or the Option Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;

19.          represents and warrants that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares and the Option Shares in, from or otherwise involving, the United Kingdom;

20.          if in a Member State of the European Economic Area, unless otherwise specifically agreed with Numis in writing, represents and warrants that it is a Qualified Investor within the meaning of the Prospectus Directive;

21.          if in the United Kingdom, represents and warrants that it is a person (i) who has professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (ii) falling within Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order; or (iii) to whom this Announcement may otherwise be lawfully communicated;

22.          represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares and/or the Option Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities and taken any other necessary actions to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations;

23.          where it is acquiring Placing Shares and/or the Option Shares for one or more managed accounts, represents and warrants that it is authorised in writing by each managed account: (a) to acquire the Placing Shares and/or the Option Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the Announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to it by Numis;

24.          undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares and/or the Option Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares and/or Option Shares may be placed with other subscribers or sold as Numis may in its sole discretion determine and without liability to such Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and/or Option Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax or security transfer tax (together with any interest or penalties due pursuant to or referred to in these terms and conditions) which may arise upon the placing or sale of such Placee's Placing Shares and/or Option Shares on its behalf;

25.          acknowledges that none of Numis, any of its affiliates or any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be treated for these purposes as a client of Numis and that Numis has no duties or responsibilities to it for providing the protections afforded to their respective clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of their rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

26.          undertakes that the person whom it specifies for registration as holder of the Placing Shares and/or the Option Shares will be (i) itself; or (ii) its nominee, as the case may be. Neither Numis nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and Numis in respect of the same on the basis that the Placing Shares and/or Option Shares will be allotted to the CREST stock account of Numis who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

27.          acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares and/or the Option Shares (together with any interest chargeable thereon) may be taken by the Company or Numis in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

28.          acknowledges that time shall be of the essence as regards to obligations pursuant to this Appendix;

29.          agrees that the Company, Numis and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to Numis on its own behalf and on behalf of the Company and are irrevocable and are irrevocably authorised to produce this Announcement or a copy thereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;

30.          agrees to indemnify on an after-tax basis and hold the Company, Numis and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

31.          acknowledges that no action has been or will be taken by any of the Company, Numis or any person acting on behalf of the Company or Numis that would, or is intended to, permit a public offer of the Placing Shares and/or the Option Shares in any country or jurisdiction where any such action for that purpose is required;

32.          acknowledges that it is an institution that has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares and/or the Option Shares. It further acknowledges that it is experienced in investing in securities of this nature, and is aware that it may be required to bear, and it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved; and

33.          acknowledges that its commitment to subscribe for Placing Shares and/or Option Shares on the terms set out herein and in the trade confirmation or contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing, and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing.

The representations, warranties, acknowledgments and undertakings contained in this Appendix are given to Numis for itself and on behalf of the Company and are irrevocable.

The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares and/or Option Shares in question. Such agreement assumes that the Placing Shares and/or the Option Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares and/or the Option Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares and/or Option Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor Numis will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares and/or Option Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Numis in the event that any of the Company and/or Numis has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify Numis accordingly.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription by them of any Placing Shares and/or any Option Shares or the agreement by them to subscribe for any Placing Shares and/or any Option Shares.

Each Placee, and any person acting on behalf of the Placee, acknowledges that Numis does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Numis or any of its affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares and/or the Option Shares.

When a Placee or person acting on behalf of the Placee is dealing with Numis, any money held in an account with Numis on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from Numis's money in accordance with the client money rules and will be used by Numis in the course of its own business and the Placee will rank only as a general creditor of Numis.

All times and dates in this Announcement may be subject to amendment. Numis shall notify the Placees and any person acting on behalf of the Placees of any changes.

This information is provided by RNS

The company news service from the London Stock Exchange

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