Downer EDI expects to report a full-year statutory net loss of $150 million-$160 million after recognising charges worth $386 million on account of goodwill impairment, restructuring and portfolio review costs.
The engineering and services contractor has also announced a $400 million capital raising to strengthen its balance sheet and fund the $134.5 million acquisition of the remaining shares in cleaning and catering firm Spotless, in which it acquired majority control in 2017.
Downer said complete ownership of Spotless would enable synergies of $10 million to $15 million a year by "eliminating redundant corporate management structures, integrating operations and consolidating the group's debt platform".
Downer said it was also exploring the potential sale of its mining portfolio after receiving a number of inquiries and it would resume the sale of its laundry business when business conditions improved.
It is reviewing its hospitality business to determine whether to sell, exit or continue the venture, which Downer estimated lost $20 million in FY20 with all major event venues closed during the pandemic.
Downer estimated its core urban services businesses made $511 million in earnings before interest, tax and appreciation, and chief executive Grant Fenn said Downer was "very happy" with its strong performance given the current earnings environment.
"We are confident that the actions we are taking will make our business more competitive and allow us to drive improved returns going forward," he said.
Downer is raising money through a 1-for-5.58 pro rata entitlement offer.
Shares will be offered at $3.75 apiece, a 12 per cent discount to their closing price on Monday.
Downer said it could not provide earnings guidance for FY21 and would not pay a final dividend for FY2020, but the interim dividend it deferred at the height of pandemic would be paid as scheduled on September 25.