With just over a week to go until the unveiling of its critical turnaround plan, Credit Suisse Group AG executives are probing every corner of the business for ways to raise fundsand preparing to tap outside investors in case they need more. 

The Zurich-based bank is working with Royal Bank of Canada and Morgan Stanley on a potential capital increase, should it need raise funds for its restructuring, according to people familiar with matter. Those discussions buttress efforts to dispose of some areas of the business, likely to include large parts of the investment bank and potentially asset management in the U.S.

A capital increase, which the bank is exploring under the name “Project Ghana”, could come after the bank’s formal restructuring announcement on Oct. 27, the people said.

After years of scandals and multi-billion-dollar losses, investors have little certainty over what it will cost for Chief Executive Officer Ulrich Koerner to restore confidence in the historic Swiss firm. Analyst estimates have ranged between $4 billion and as much as $8 billion, though executives may seek to keep the figure initially lower at a time of volatile markets and depressed valuations. 

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

“A capital ‘hole’ of 6 billion francs needs to be plugged in order to restructure operations, absorb regulatory requirements, support growth and buffer against the unknown,” analysts at KBW including Tom Hallett wrote in a note. “We do not believe this is possible purely through asset sales, particularly in the current environment.”

Morgan Stanley, Royal Bank of Canada and Credit Suisse declined to comment. Credit Suisse shares rose as much as 4.3% Tuesday and were up 1.8% to 4.62 Swiss francs as of 5:25 p.m. in Zurich, suggesting investors may see a capital raising as less dilutive than some may have been expecting.

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 $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. 

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