The sources said Chief Executive Federico Ghizzoni will unveil the size of the capital increase alongside a three-year strategic plan on Monday, but the rights issue will likely take place in the first quarter of 2012 -- possibly as early as January -- in the hope that market conditions improve.
Tomorrow the board will have a proposal for a 7.5 billion euro capital increase, all in cash, said one of the sources, speaking on condition of anonymity, after UniCredit's strategic committee met on Sunday to discuss the cash call.
A second source said: The idea is to have the extraordinary shareholder meeting in December and launch the cash call on January 9, depending on market conditions.
UniCredit's shares have lost half of their value since the start of the year and Ghizzoni has come under mounting pressure to strengthen the bank's capital base, cut costs and refocus operations on core businesses in Italy, Germany, Austria, Poland and Turkey.
The bank, which operates in 22 countries, has a capital shortfall of 7.4 billion euros to meet tougher requirements set by the European Banking Authority last month to beef up the region's lenders in the face of a spreading debt crisis.
That figure did not include 2.4 billion euros in hybrid instruments that UniCredit has been allowed by the Bank of Italy to count as core capital.
Still, Ghizzoni wants to raise enough money to be on the safe side of the 9 percent Core Tier 1 benchmark set by the EBA, the sources said.
However, he needs to convince the bank's shareholder foundations -- which together hold around 13 percent of UniCredit -- to back the bank's third capital increase since 2009 and the biggest one since the start of the financial crisis.
The challenge will be to convince the foundations to substantially support it and to find a period where we can do it, a third source said, adding the most likely price for the rights issue would be a discount in the region of 40 percent.
There are weeks where you can't do anything at the moment.
The source said that UniCredit was also in talks with potential new investors in China and Qatar but these parties had not made any commitment to be part of the deal so far.
A further problem is the 7.5 percent stake held in UniCredit by Libya's central bank and sovereign wealth fund, which is technically still frozen because of the international sanctions imposed during the country's civil war.
Other measures in Ghizzoni's strategic plan include closing UniCredit's western European equity sales, trading and research business, which is run from London, and cutting up to 5,000 jobs globally, two sources said.
UniCredit declined to comment.
The disposal of minor eastern European operations is also under consideration but, as Ghizzoni has repeatedly said, the bank has no intention of selling its Turkish and Polish units.
UniCredit will also unveil its third-quarter results on Monday, which are expected to have been hit heavily by goodwill writedowns and market turmoil.