The firm has seen its debt levels rise in the past few years, with its net debt standing at £624m as of 31 October.

In a statement to the stock market on Friday, Kier said it was planning to offer 64.5m new shares at 409p per share, a discount of 46% to the closing price on Thursday.

The company saw its share price fall by more than 27% after the announcement.

The Board said it had taken the decision due to the increased risks associated with operating with such big debts since the collapse of Carillion.

It said: “The Board believes that the risks associated with the group’s net debt position have recently increased for the following reasons:

“– although the majority of the group’s banking facilities are committed until 2022, a number of lenders have indicated an intention to reduce their exposure to the construction and related sectors, which may affect the confidence of other credit providers and liquidity in the medium term and may also have an impact on access to uncommitted facilities and/or future financings;

“– potential clients and customers are increasingly focusing on service providers’ balance sheets, resulting in procurement processes becoming increasingly rigorous and automated; and

“– the increasing pressure from stakeholders to shorten supply chain payment terms.”

Haydn Mursell, chief executive at Kier, 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.”