Shares in healthcare contractor Circle plunged 27 per cent to 49p this morning, after it admitted it is in talks to pull out of its contract managing the UK's first privately run NHS hospital Hinchingbrooke.
The company blamed increased pressure on its accident and emergency services, a lack of places for patients awaiting discharge and funding cuts of 10.1 per cent for this financial year.
The Aim-listed company has pumped £4.84m into the Trust and could be required to make a final payment of £160,000.
Its contract gives it the right to end the franchise if the amount of money required exceeds £5m.
Circle took over the ailing trust back in early 2012. Today it said at that point, Hinchingbrooke was a "basket case".
Steve Melton, Circle's chief executive, said:
Like most hospitals, over the past year Hinchingbrooke saw unprecedented A&E attendances and not enough care places for healthy patients awaiting discharge.
At the same time, our funding has been cut. We also believe that inconsistent and conflicting regulatory regimes compound the challenge for acute hospitals in this environment. This combination of factors means we have now reluctantly concluded that, in its existing form, Circle's involvement in Hinchingbrooke in unsustainable.