AST Members may be aware from press and other sources that the Arsenal Board has received a proposal from Red & White Holdings (R&W) for a rights issue to raise money for the club through the issue of new shares

The Arsenal Board considered the proposal at their regular monthly meeting on Thursday 2 July, and have since issued statements to the press and via Arsenal.com to say that they do not wish to go ahead with a rights issue at the current time. The full statement from Ivan Gazidis can be seen on Arsenal.com.

R&W have countered to state that they do not believe the club currently has adequate financial resources to support the manager to strengthen the squad, to weather the property downturn, to renegotiate the Highbury Square loan on good terms and to deal with the continuing difficult economic conditions, though they are prepared to give the Board the benefit of the doubt at present.

The AST maintains regular contact with all of the clubs major shareholders and have met with the club and their advisers to discuss this issue. We have written to R&W requesting more details on their proposals.

In the absence of more details the AST cannot comment specifically, but our view is that a rights issue could be beneficial in reducing the club’s debt and perhaps also freeing up some funds for Arsene Wenger to use to build a winning squad. We would welcome further discussion on this concept and the appropriate structure a rights issue would need to take as most companies would prefer to increase equity rather than hold debt. That said, we are committed to plurality of ownership at Arsenal, and would not support a rights issue that could lead to a sole majority owner of Arsenal ‘by the back door’, nor the raising of funds that are spent on unsustainable transfer fees and wages as at Real Madrid.

The AST has recently commented on this subject in the media, and Guardian football writer David Conn has written a blog which gives a good airing to the subject. It is an important debate for Arsenal that will impact on the future of the club. The AST would welcome feedback from our members on this subject which we will discuss in more detail at our next members’ meeting on Monday 10 August.

In the meantime we continue to challenge all the major shareholders, both within and outside the clubs Board, to act together for the long-term benefit of Arsenal. We urge them to put self interest aside and consider their obligations to every Arsenal supporter, as well as to the shareholders they succeeded, and to remember that a football club is far more than a commercial enterprise.