Kier Group, the listed construction company, is putting the finishing touches to a comprehensive plan to fix its balance sheet with a major share sale and the disposal of one of its biggest divisions.

Sky News has learnt that Kier is in detailed talks about an equity-raising that could generate close to its existing market capitalisation of £150m.

Sources said the discussions were not yet finalised, but that a deal was expected to be announced alongside the group’s financial results, which are expected to be published in April.

Kier is also finalising the sale of its housebuilding arm, Kier Living, to a consortium led by Terra Firma Capital Partners, the private equity firm set up by prominent financier Guy Hands.

Terra Firma is understood to be planning to co-invest in the deal alongside funds managed by Goldman Sachs and Partners Group, a Swiss-based investment firm.

The consortium is said to have a period of exclusivity within which to finalise a deal, which could be worth in the region of £115m.

Kier is one of the government’s biggest private sector contractors, working on major infrastructure projects such as Crossrail and the new high-speed rail link HS2.

Last year, Kier appointed Andrew Davies, an experienced industry figure who had been due to take up the top job at Carillion shortly after it collapsed in January 2018, as its new chief executive.

Kier said last September that it was examining a further equity-raise alongside the auction of the housebuilding business.

A Kier spokesman declined to comment.

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