Credit Suisse Group AG is working with Royal Bank of Canada and Morgan Stanley on a potential capital increase, should the bank need to shore up its balance sheet and raise funds for its restructuring, according to people familiar with matter. 

The Zurich-based firm has lined up banks including the Canadian and U.S. firms for the possible share sale, the people said, asking not to be identified as the matter is private. A capital increase, under the name Project Ghana, could come after the bank’s formal restructuring announcement on Oct. 27, the people said.

Credit Suisse is just over a week away from unveiling what’s expected to be a major overhaul after a string of high profile losses and scandals. While the bank is seen as preferring to avoid the sale of new shares at current depressed levels, it isn’t ruling out the need to raise money if asset sales aren’t sufficient, people familiar with the matter said earlier.

If Credit Suisse were to pull the trigger on a capital increase, it would likely seek at least US$2 billion -- and possibly more -- to cover restructuring and any operating losses over the next couple of years as it pivots the business, the people said.

Morgan Stanley, Royal Bank of Canada and Credit Suisse declined to comment. Credit Suisse shares fell before recovering losses, and traded at 4.67 Swiss francs as of 3:20 p.m. in Zurich. 

Credit Suisse has already reached out to the Qatar Investment Authority and others to gauge interest in a potential capital injection, people familiar with the matter said earlier. Other Middle Eastern funds, such as Abu Dhabi’s Mubadala Investment Co. and Saudi Arabia’s Public Investment fund, are weighing whether to put money into its investment banking arm or other businesses, the people said. 

Credit Suisse has long counted on wealthy Middle Eastern investors as top shareholders, including the QIA and Saudi Arabia’s Olayan Group. They’ve often invested in times of need, including the QIA’s participation in Credit Suisse’s approximately US$2 billion convertible notes issuance in April 2021. That helped shore up the balance sheet after Archegos.

Goldman Sachs Group Inc. analyst Chris Hallam said last week the bank could face a capital shortfall of least a 4 billion Swiss francs to pay for its restructuring at a time when capital generation has been muted. The total need could be as much as 8 billion francs, he said. 

In the run up to next week’s announcement, the bank is accelerating its plans on asset disposals, including the likely partial sale of its securitized products unit. That business is attracting interest from Pimco, Sixth Street and an investor group including Centerbridge Partners, people with knowledge of the matter have said.