The share placing, which is fully underwritten, will be the final part of its turnaround strategy allowing Kier to pay down much of its £436m net debt.

Chief executive Andrew Davies said he now hoped Kier could achieve a net cash position in two to three years.

Kier’s banks have agreed to extend the contractor’s facilities until 2025 after completion of the fund raise on 16 June.

Together with the recent £110m sale of Kier Living, the group hopes to raise £351m.

Davies said these proceeds will give Kier the financial and operational flexibility it needed to deliver an order book of £8bn which covers 62% of year to 30 June 2022 forecast revenues.

Davies said: “Today’s proposed capital raise represents the final milestone in Kier’s strategy to simplify the group; to improve cash generation; and to strengthen our balance sheet.

“This capital raise will provide Kier with the financial and operational flexibility to continue to pursue our strategic objectives, within our chosen markets, and to facilitate investment in the business to help drive sustainable, profitable organic growth and the achievement of our medium-term financial targets”

Over more than a year, Davies has streamlined the group reducing staff numbers by 1,700 through its ‘Perform Excellence’ self-help programme. This is expected to achieve £115m in annualised cost savings by the end of this financial year.

He said the board would continue to review its cost base to identify additional cost saving measures.

Actions taken to ‘right-size Kier would see the business target in the medium term revenue of £4-£4.5bn, with adjusted operating margin of around 3.5%.