SCHEDULE 13D/A: Two Seas Capital Amends Indivior PLC Stake, Reveals Debt and Swap Positions

Two Seas Capital LP and its affiliates have filed an Amendment No. 5 to their Schedule 13D, disclosing a 9.3% beneficial ownership in Indivior PLC, alongside details of a significant credit facility and cash-settled swap agreements.

Summary

• Two Seas Capital LP, Two Seas Capital GP LLC, and Sina Toussi (collectively, the "Reporting Persons") beneficially own 11,579,819 Ordinary Shares of Indivior PLC, representing approximately 9.3% of the outstanding shares as of March 1, 2025.
• The shares are held by two funds: 8,781,045 Ordinary Shares by the Litigation Fund and 2,798,774 Ordinary Shares by the Global Fund.
• The aggregate purchase price for the Litigation Fund's shares was approximately $77,503,903, and for the Global Fund's shares was approximately $29,547,122.
• Shares were purchased using working capital, which may include margin loans, and proceeds from a Credit Facility with UBS AG, London Branch.
• The Litigation Fund has pledged 8,781,045 Ordinary Shares to UBS as collateral for a Credit Facility, which has an outstanding loan amount of $18,774,884.89.
• The Credit Facility's maturity date is July 31, 2025, with a variable interest rate.
• The Litigation Fund plans to pay down $11,744,884.89 of the outstanding loan on March 5, 2025, reducing the balance to $7,000,000.
• The Global Fund has entered into cash-settled swaps representing economic exposure to a notional interest in 1,812,709 Ordinary Shares (approx. 1.5%) with Jefferies Financial Products, LLC and 1,340,988 Ordinary Shares (approx. 1.1%) with Goldman Sachs International.
• Transactions by the Reporting Persons on behalf of the Funds in the past 60 days include net purchases of 855,985 shares by Two Seas Global (Master) Fund LP and net sales of 1,283,680 shares by Two Seas Litigation Opportunities Fund LLC, resulting in a net reduction of 427,695 shares in direct holdings.

Sentiment

Score: 4

Explanation: The sentiment is slightly cautious. While the investor maintains a significant stake, the net sales of shares in the past 60 days and the substantial portion of shares pledged as collateral for a variable-rate loan introduce elements of financial leverage and potential risk, offsetting the positive of a planned debt paydown.

Positives

• The Reporting Persons maintain a significant beneficial ownership stake of 9.3% in Indivior PLC, indicating continued interest.
• The Litigation Fund has committed to a substantial paydown of its outstanding loan amount under the Credit Facility by $11,744,884.89 on March 5, 2025, reducing its debt burden.

Negatives

• A significant portion of the Litigation Fund's holdings (8,781,045 Ordinary Shares) are pledged as collateral under a Credit Facility, exposing them to foreclosure risk upon default.
• The Reporting Persons, through their funds, have engaged in net sales of 427,695 Ordinary Shares in the past 60 days, indicating a reduction in direct equity exposure.
• The Credit Facility carries a variable interest rate, exposing the Litigation Fund to potential increases in financing costs.
• The funds utilize margin loans as part of their working capital, which can increase financial leverage and risk.

Risks

• Foreclosure proceedings against the 8,781,045 pledged Ordinary Shares if the Litigation Fund defaults on its obligations under the Credit Facility Agreement.
• Exposure to variable interest rates on the Credit Facility, which could increase financing costs.
• Potential for certain event of default triggers under the Credit Facility Agreement to be satisfied by unencumbered assets of the Litigation Fund.
• Reliance on margin loans for working capital, which can amplify losses if share prices decline.

Future Outlook

The Litigation Fund has a planned payment of $11,744,884.89 on its Credit Facility on March 5, 2025, which will reduce the outstanding loan amount to $7,000,000. The Credit Facility is set to mature on July 31, 2025.

Industry Context

This filing is an update on a significant investor's stake and financing arrangements in Indivior PLC, rather than a company-specific operational or financial announcement. As such, it primarily reflects the investment strategy and financial leverage of the Reporting Persons, Two Seas Capital, within the pharmaceutical sector, specifically concerning a company focused on addiction treatment.

Stakeholder Impact

• Shareholders: The significant beneficial ownership by Two Seas Capital and its affiliates, along with their trading activities, can influence market perception and potentially share price volatility. The pledging of a large block of shares as collateral introduces a potential overhang if foreclosure were to occur.
• Creditors (UBS AG, London Branch): As the lender for the Credit Facility, UBS is exposed to the credit risk of the Litigation Fund, mitigated by the pledged Indivior PLC shares.

Next Steps

• The Litigation Fund is committed to paying down $11,744,884.89 of its outstanding loan amount under the Credit Facility on March 5, 2025.
• The Credit Facility is scheduled to mature on July 31, 2025.

Key Dates

Keywords

Indivior PLC, Schedule 13D, Two Seas Capital, Beneficial Ownership, SEC Filing, Investment Fund, Credit Facility, Pledged Shares, Cash-Settled Swaps, Equity Stake, Share Transactions, Financial Reporting