The contractor confirmed the move in a Stock Exchange announcement on Friday afternoon which saw its share price fall 15%.

Kier said it needs the money because banks are becoming increasingly nervous of the construction sector and subcontractors need to be paid quicker.

The contractor said its net debt as at 31 October 2018 was £624m.

It added: “The average value of the assets in the Group’s Property and Residential divisions during the year ended 30 June 2018 was approximately £460m on a cost basis, although the Directors believe that the value of these assets is higher.”

Haydn Mursell, Chief Executive of Kier Group said: “There has been a recent change in sentiment from the credit markets towards the UK construction sector, with various lenders indicating that they will be reducing their exposure to the sector.

“This has led to lower confidence among other stakeholders and an increased focus on balance sheet strength.

“The Rights Issue is intended to address these issues, better position Kier to continue to win new business and further strengthen our market leading positions.”

Those holding around  one third of the shares have indicated they will take up the rights offer.

Kier said: “The Directors believe that it is important that the net proceeds of the Rights Issue are reported on the Group’s balance sheet as at 31 December 2018, in order to enable the Group to be better positioned, in light of tighter credit markets and more stringent tender pre-qualification requirements, to win new business.”