Kier is offering 284,049,829 new ordinary shares at an issue price of 85 pence.
Kier said that the capital raise, together with the £110m banked from the sale of Kier Living to Terra Firma, would firm up the balance sheet and keep the business on an even keel. It will also facilitate the re-financing of existing borrowing facilities.
Kier plans to use most of the money to pay down debts, although £700,000 will go into the company pension scheme.
Of the £241m being raised, a balance of £16.9m will be left for cash reserves.
Chief executive Andrew Davies said: "Today's proposed capital raise represents the final milestone in the group'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."
The last time Kier launched a rights issue was in December 2018. It was generally regarded as a failure with fewer than 38% of the shares put up for sale being taken, leaving the underwriters with a big bill. A month later Haydn Mursell, Andrew Davies' predecessor as chief executive, lost his job.