Macmahon Holdings' shares have dropped by more than a fifth after resuming trade following an $80.7 million capital raising and sale of its construction business.
Shares in the mining contractor were 5.75 cents lower at 20.75 cents at 1157 AEDT, after earlier sliding to 18 cents.
The stock had last traded at 26.5 cents before going into a trading halt on Monday.
Two days later it announced the capital raising, the sale of its construction arm to Leighton Holdings for $16.3 million, and downgraded its full year earnings guidance.
Chief executive Ross Carroll warned that Macmahon's net profit for 2012/13 would be between nil and $25 million as the company had been forced to make substantial writedowns on its construction business.
The earnings downgrade came three months after Macmahon shocked investors with news that its annual profit would be about half the $56.1 million reported in 2011/12.
Morningstar Equities Research senior analyst Ross MacMillan said he had cut his net profit forecasts for the group to $2.4 million for 2012/13 from $24.3 million.
He described the capital raising as highly dilutive and advised investors not to take up their entitlements.
"However, if the shares trade above the offer price there may be profitable opportunities for investors to take up their entitlements and sell shares on market," he said in a note to clients on Friday.
As its shares resumed trading, Macmahon said it had completed the bookbuild for the institutional component of its fully underwritten capital raising.
The company raised $42 million from institutions, who paid 16 cents a share.
Macmahon's existing institutional investors took up 86 per cent of the new shares on offer, which is being used to strengthen the its balance sheet and expand its mining business.
However smaller institutions did not take up all their entitlements to the new shares, which were sold to other institutional investors and major shareholder Leighton Holdings.
Retail investors will now be offered $38 million worth of shares under the offer, which opens to them on Wednesday.
"The successful completion of the institutional component of the offer demonstrates strong shareholder support for Macmahon's refocused strategy to build on the long term success of our mining business," chief executive Ross Carroll said.
Macmahon wants to become a dedicated full service mining contractor after offloading its construction business.
The moves come after a major review of Macmahon's businesses and costs, which has led to the axing of up to 50 jobs.
Macmahon expects to be hit by one-off costs of about $10 million as a result of its restructuring, and redundancy and closure costs.