Kier Group PLC (LON:KIE) shares dropped on Monday following reports it was in talks to sell its housing maintenance business to cut its massive debt pile.
The construction firm could fetch up to £30mln for the business, sources told the Construction Enquirer.
READ: Kier Group CEO steps down after disappointing rights issue as firm maintains guidance
The news comes after Kier’s chief executive Haydn Mursell stepped down last week following a disappointing rights issue in December, which saw investors take up just 38% of the new shares.
Joint bookrunners – Peel Hunt, Numis, Citigroup, HSBC Holdings and Banco Santander – were unable to find subscribers for the remaining stock at the rights price so they had to take the shares on themselves as underwriters.
The rights issue was held to reduce debt and better position Kier in light of tighter credit markets and more stringent tender pre-qualification requirements.
"The board believes that, following the completion of the recent rights issue, now is the right time for a new leader to take Kier forward to the next stage of its development,” chairman Philip Cox said in a Tuesday statement.
Shares plunged following the unsuccessful rights issue as it raised concerns that Kier could collapse under a mountain of debt like Carillion did early last year.
Around noon on Monday, shares in Kier were down 3.7% to 505.5p.