Shares in the group have tumbled after last Friday's announcement of the deeply discounted £264 million rights issue.
The shares fell 34%, from 752.5p to 496.8p, on the day of the announcement and have continued to slide since, dropping below 409p on Tuesday. Today, they are trading at 397.4p.
Woodford, the company's largest shareholder, has responded by buying more shares, triggering a stock market announcement as his stake rose to 15.4% of the company's shares on Tuesday, up from 14.1% at the time of the previous filing last month.
In an update to investors, Woodford Investment Management signalled its support for the rights issue.
'Following this fundraising, Kier will have a stronger balance sheet which management believes will improve the company’s competitive positioning, putting it in a better position to win new business, given increased focus on balance sheet strength by key customers,' said Alex Correia, investment analyst at the fund group.
'Kier is a relatively new position in the funds and, with current trading in line with expectations and in anticipation of a stronger balance sheet and growing earnings, the attractive long-term investment thesis that we have built around it remains in place.'
Woodford first invested in Kier in March and has been building his stake in the company since then. At the end of October, the shares represented a 2.7% holding in his Woodford Income Focus fund and 1% of his flagship Woodford Equity Income fund.
Kier is issuing 33 new shares for every 50 existing share as part of the rights issue and has said that investors holding a third of the shares have said they are supportive of the rights issue.
But unless the shares lift from current levels, investors face paying a small premium to take part in the rights issue, versus the stock market price.
Kier is not the only troubled company held in Woodford's funds looking to raise money, with a number of his much smaller investments conducting cash calls.
This morning, mattress maker Eve Sleep (EVE) said Woodford had indicated he would inject £8 million into the company as part of its £15 million fundraising. Since floating on the Alternative Investment Market in 2017 at 101p per share, the stock has slumped to 11.8p.
That fresh investment would swell Woodford's voting rights to 42%, meaning Eve Sleep will have to seek a waiver to the stock market rule that would ordinarily require the manager to launch a takeover bid.
It's the same story at Xeros (XSG), the waterless washing machine maker in the process of raising £15 million. Woodford, Mercia Technologies, Enterprise Ventures Group and Enterprise Ventures group, which are all inter-linked, would hold 43.5% of the voting rights after the fundraising.