June 3 (Bloomberg) -- Lehman Brothers Holdings Inc. may raise $3 billion to $4 billion of extra capital to strengthen its balance sheet, the Wall Street Journal reported, citing people familiar with the matter. .

The fresh capital will probably be raised by selling common shares, thus diluting the holdings of current shareholders, the newspaper said.

The amount being mooted indicates that the securities firm's second-quarter loss might be larger than the $300 million that some analysts have been predicting, according to the Journal, citing unidentified financial executives and analysts.

Lehman will probably make the announcement when it releases its second-quarter results, scheduled for the week starting Monday, June 16, the newspaper said.

Lehman has already raised $6 billion in the past year by issuing preferred shares, the Journal added.

Mark Lane, a Lehman Brothers spokesman, told Bloomberg News in a telephone interview he had no comment.

To contact the reporter on this story: Alan Purkiss in London on apurkiss@bloomberg.net.

Last Updated: June 3, 2008 00:46 EDT