SCHEDULE 13D/A: Two Seas Capital Amends Indivior PLC Stake, Discloses Pledged Shares and Credit Facility Details

Two Seas Capital LP has filed Amendment No. 4 to its Schedule 13D for Indivior PLC, detailing its continued 9.6% beneficial ownership, the pledging of shares under a UBS credit facility, and recent trading activities.

Summary

• Two Seas Capital LP, Two Seas Capital GP LLC, and Sina Toussi (Reporting Persons) beneficially own 12,007,514 Ordinary Shares of Indivior PLC, representing approximately 9.6% of the outstanding shares.
• This ownership is based on 124,633,727 Ordinary Shares outstanding as of January 14, 2025.
• The shares are held by two funds: Two Seas Litigation Opportunities Fund LLC (10,064,725 shares, purchased for approximately $98,549,912) and Two Seas Global (Master) Fund LP (1,942,789 shares, purchased for approximately $21,193,236).
• The Litigation Fund's shares are partially financed by a Credit Facility from UBS AG, London Branch, with $18,774,884.89 outstanding and a maturity date of July 31, 2025.
• The Litigation Fund has pledged all 10,064,725 Ordinary Shares held by it to UBS as collateral for the Credit Facility.
• The Global Fund has entered into cash-settled swaps representing economic exposure to 2,162,709 Ordinary Shares with Jefferies Financial Products, LLC and 1,115,988 Ordinary Shares with Goldman Sachs International, totaling approximately 2.6% economic exposure without direct control.
• Recent transactions (past 60 days) include both purchases and sales of Indivior PLC shares by both funds, with the Global Fund making net purchases and the Litigation Fund making net sales.

Sentiment

Score: 6

Explanation: The document is neutral to slightly positive from the perspective of the investor maintaining a significant stake, but introduces a financing risk with pledged shares and a maturing credit facility. It's a factual update, not a performance report.

Positives

• Continued significant stake (9.6%) by an institutional investor, indicating ongoing interest in Indivior PLC.
• The Global Fund's use of cash-settled swaps allows for economic exposure without direct voting or dispositive control, potentially offering flexibility in managing its position.

Negatives

• A substantial portion of the Litigation Fund's shares (10,064,725 shares) are pledged as collateral, creating a risk of foreclosure if the Credit Facility obligations are not met.
• The Credit Facility has a relatively near maturity date of July 31, 2025, requiring refinancing or repayment of the outstanding loan amount.
• Recent trading activity shows both purchases and sales by the funds, indicating active management of the position rather than a pure accumulation, with the Litigation Fund reducing its direct share count.

Risks

• Foreclosure Risk: If the Litigation Fund defaults on its obligations under the Credit Facility Agreement, UBS could initiate foreclosure proceedings against the 10,064,725 pledged Ordinary Shares.
• Credit Facility Maturity Risk: The Credit Facility matures on July 31, 2025, requiring the Litigation Fund to repay or refinance the outstanding loan amount of $18,774,884.89 by that date.
• Variable Interest Rate Risk: The interest rate under the Credit Facility is variable, exposing the Litigation Fund to potential increases in financing costs.
• Market Price Volatility: The value of the pledged shares and the overall investment is subject to the volatility of Indivior PLC's share price, which could impact the collateral value and the fund's financial position.
• Swap Counterparty Risk: While cash-settled, the swaps entered into by the Global Fund expose it to counterparty risk with Jefferies Financial Products, LLC and Goldman Sachs International.

Future Outlook

The document primarily details current ownership structure and financing arrangements. It does not provide explicit forward-looking statements or guidance from Indivior PLC or the Reporting Persons regarding future performance or strategic direction, beyond the maturity date of the credit facility on July 31, 2025.

Industry Context

This filing reflects an institutional investor's significant stake in Indivior PLC, a company operating in the pharmaceutical sector. The use of credit facilities and swaps for financing and gaining economic exposure is a common practice among investment funds, indicating sophisticated portfolio management strategies within the healthcare investment landscape.

Stakeholder Impact

• Shareholders: The continued significant stake by Two Seas Capital indicates a notable institutional investor's ongoing interest, which could be viewed positively. However, the pledging of a large block of shares as collateral introduces a potential overhang if the credit facility defaults, leading to forced sales. The active trading by the funds could also contribute to market liquidity and price movements.
• Creditors (UBS): UBS is a creditor to the Litigation Fund, holding a security interest over a substantial portion of Indivior PLC shares. Their exposure is tied to the fund's ability to repay the loan and the value of the pledged collateral.

Next Steps

• The Credit Facility for the Litigation Fund is set to mature on July 31, 2025, requiring repayment or refinancing by that date.

Key Dates

Recommendation

Keywords

Indivior PLC, Schedule 13D, Two Seas Capital, Beneficial Ownership, Shareholding, SEC Filing, Investment Fund, Credit Facility, Pledged Shares, UBS, Cash-Settled Swaps, Share Transactions, Institutional Investor, Pharmaceuticals, Healthcare