The company announced on Wednesday it was looking to raise up to $80.6 million through a heavily discounted three for one pro-rate entitlement offer to recapitalise its balance and set a platform for a turnaround in financial performance.
"The company's ability to remain financially viable and meet its obligations remains uncertain until the entitlement offer has been completed," Neptune said in a statement.
"Until the minimum subscription amount is received, Neptune is reliant on continued support from the NAB [National Australia Bank] to remain financially viable, together with the support from two vendors in relation to deferred earn-out payments.
"If the entitlement offer is not successful and the company is unable to source sufficient funds elsewhere, there is a real risk that the company may default on its debt obligations."
Earlier this month, Neptune flagged a major restructuring of its business aimed at returning it to profitability in the shortest possible time after a poor performance in the last financial year and first and second quarters of FY 2011.
The company appointed Robin King as acting chief executive officer to replace managing director Christian Lange and engaged PricewaterhouseCoopers to assist with a thorough review of the business, current organisational efficiency, asset utilisation and disposal options.
It also began an immediate and aggressive cost reduction program targeting about $10 million in ongoing annual savings.
The key terms of revised banking facilities with the NAB have also been agreed on, with the maturity date for all debt facilities extended to March 31, 2012.
Chairman Ross Kennan said the immediate changes were necessary and would set a platform for a return to profitability.
"The performance of our business over the last financial year and first and current quarter of 2011 has simply not been acceptable," he said.
"The board has taken decisive and wide-reaching steps to turn around the company's performance and to do so in the shortest possible timeframe.
"We require a recapitalised balance sheet in order to move forward and we understand that our shareholders will want to see commitment to significant change before they commit further investment.
"In our current situation, equity will have to be raised at a deep discount to the last market price and therefore we believe it's fair and appropriate that we offer our existing shareholders the first opportunity to invest at this discounted level."
Neptune aims to raise a minimum of $60 million and a maximum of $80.6 million through the entitlement offer at an issue price of 6c per share, a 70% discount to Neptune's last trading price of 20.5c on November 19 before it went into a halt.
Shares in the company have traded at a high of 89c in late September 2009.
Patersons Securities and Euroz Securities will manage the entitlement offer and place any shortfall on a best endeavours basis.
Neptune directors will also have the right to place any shortfall not taken up by shareholders with new investors.
The entitlement offer will be subject to shareholder approval, but is targeted to close on February 24.
Trading in the company's shares will remain suspended pending the completion of the raising.
Acting CEO King said he believed, based on his industry experience, Neptune had a strong underlying business with a bright future.
"To restore value to investors, we need to recapitalise the balance sheet, accelerate the integration of performing business units, and put in place a cost structure that supports financial performance," he said.
"This will undoubtedly require changes to how Neptune operates and the senior management team has a mandate from the board to effect these changes.
"As a relative newcomer to Neptune, I bring a fresh set of eyes to this business and plan to make whatever changes are necessary to improve our performance."
