Kier Group said investors snapped up only 38% of the new shares the British builder issued as part of a fundraising, as shareholders likely avoided a construction sector shaken by the collapse of Carillion.
Kier last month announced a surprise plan to tap the market for some £264m in a heavily discounted share sale, blaming the reluctance of banks to lend to the construction sector.
The company said its joint bookrunners will look to sell the remaining 40.2 million new shares not validly taken up, and have agreed to buy the shares themselves if they are not sold by tomorrow evening.
Shares in Kier are expected to fall as much as 20% today, according to a premarket indicator.
Kier, which builds and maintains highways, railway tunnels and houses, expects to receive net cash proceeds of £250m by the end of December.
Its chief executive Haydn Mursell today appeared to calm investors jittery after the near bankruptcy of rival firm Interserve.
"Following the completion of the £250m rights issue, Kier enters 2019 with a strong balance sheet which puts us in an excellent competitive position," Mursell said in a statement.
