Anglo United's full year figures yesterday were unremarkable enough - a loss of pounds 1.3m compared with last year's deficit of pounds 38.3m - but they marked the end of a classic 1980s disaster story and the start of an intriguing South Atlantic investment opportunity.
Back in 1989 tiny Anglo thought it had hit the big time when it borrowed pounds 500m to take over the much larger Coalite conglomerate. Its head then, David McErlain, planned to sell off a raft of peripheral businesses, including land in the Falkland Islands, the Charringtons solid fuel business and a chain of motor dealerships, pay off his debts and make a handsome turn.
It was not to be. Recession intervened and disposals became impossible at a sensible price. Anglo's problem became the banks' problem, principally HSBC's, and Mr McErlain was sent on his way, leaving a shell with little to recommend it but a pile of tax losses.
Last year a deal with a potential buyer of the remaining Coalite business failed.
Yesterday Anglo admitted that sales of its Coalite fuel were running 15 per cent below last year's level and its chemicals arm was suffering from the strength of the pound.
As a result, the banks were forced to agree an unusual restructuring of Anglo that will see shareholders swap their all-but-worthless holding in the company, which has considerable negative net worth and won't be able to pay a dividend or service its debts, for shares in the only remaining business with any potential, the Falkland Islands Company.
Small beer it may be currently, but the Falkland Islands Company really is the economic powerhouse of Britain's South Atlantic colony. It owns most of the shops and a hotel, the islands' fishing agency and, importantly, the rights to service any offshore oil and gas exploration activity.
That is not worth too much just now, but with millions of barrels of oil in the region, the potential for that monopoly is substantial.Reuse content