Mr McErlain's replacement will be Harold Cottam, 54, who until last year was managing partner of the auditors Ernst & Whinney, now part of Ernst & Young.
As foreshadowed in yesterday's Independent, the deal will see control of Anglo pass to a consortium of banks led by Samuel Montagu. Their initial stake will be 50 per cent but full conversion of a new issue of loan notes could see them taking as much as 71 per cent of the company.
The refinancing, which has to be approved by shareholders at an extraordinary meeting, will take place in two stages.
The first sees preference shareholders converting into ordinary shares on improved terms that will give them 14 per cent of the company. Current shareholders will retain 36 per cent, with the remaining 50 per cent passing to the banks in exchange for pounds 45.9m of debt at a rate of 10p a share.
A further pounds 75m slice of Anglo's pounds 250m borrowings, built up during Anglo's 1989 takeover of Coalite, the solid fuel distributor, will be swapped for convertible loan notes. The issue of a warrant will allow shareholders to claw back some of the banks' maximum stake.Reuse content