Robert Preston from the BBC has an interesting summary of the rights issue.
Lazard Brothers, the bank Usmanov used to support his proposal, believes that earnings before interest will fall from between £55m-60m in 2009 to £35-40m in 2010, that the Highbury Square deal will turn out to be unprofitable, and that there isn't enough funds to remain competitive with the top sides. On the basis of this, Usmanov proposed an injection of £150m via a rights issue of new shares.
Rothschild, the bank that advised the board, suggested that the money would only save £5 million in year in debt, that there are better alternatives than a rights issue, and that Wenger is'nt hampered financially.
Now, 5 million a year isn't a lot of money for a £Club with 350 million in debt. And I don't think anyone outside of the Club can say whether the current finances circumstances are hampering the development of the squad. But I was puzzled by the second point, which was:
"There are better ways to rehabilitate the Highbury redevelopment, including a putative cunning plan under negotiation right now - and even if the worst came to the worst, there should be no direct financial contagion to the club, since the providers of the property loans have no recourse to the footballing assets."
I admit, I'm not blessed with financial knowledge. Actually, most of what I know about finance comes from Usmanov, Kroenke and the Arsenal. Thanks to the boardroom tussles, I now know about things like rights issues, leveraged loans, the intricate world of property development... who said football can't be educational?
But this is something that got me baffled. What exactly is a "putative cunning plan", and how is it better than getting a free £100 million from the shareholders? My only knowledge of "cunning plans" comes from Baldrick of Blackadder, and most of his plans weren't very good. They usually involve something violently stupid.
I really hope the Arsenal board's plan is a lot more cunning, because I get the feeling that we're sending this team into the season like the British High Command sent troops over the top in Word War 1. As like in Blackadder Goes Forth:
Private Baldrick: I have a plan, sir.
Captain Blackadder: Really Baldrick? A cunning and subtle one?
Private Baldrick: Yes, sir.
Captain Blackadder: As cunning as a fox who's just been appointed Professor of Cunning at Oxford University?
Private Baldrick: Yes, sir.
[another call: On the signal, Company will advance]
Captain Blackadder: Well, I'm afraid it's too late. Whatever it was, I'm sure it was better than my plan to get out of here by pretending to be mad. I mean, who would have noticed another madman round here?
[a whistle blows he looks at Baldrick]
Captain Blackadder: Good luck, everyone.