Baker Steel Resources Trust - Potential sale of Futura on the horizon

Baker Steel Resources Trust (BSRT) has announced that Futura Resources (one of its largest holdings, making up 33.1% of end-April 2025 NAV) obtained a US$15m loan from International Resources Holdings (IRH), a mine-to-market company based in the UAE. The loan proceeds will be used to fund the further production ramp-up of Fairhill (one of Futura's two coking coal mines in Australia). Separately, BSRT and some other Futura shareholders, representing more than 50.1% of Futura's fully diluted share capital, signed agreements giving IRH an option to acquire their shares at a price of A$3.15 per Futura share within nine months, which implies Futura's enterprise value of c A$250m, according to BSRT. Importantly, this equity valuation is c 43% above the carrying value of A$2.21 per share at which BSRT currently holds its Futura shares (which we calculate make up 12.5% of BSRT's end-April 2025 NAV), offering significant re-rating potential if IRH exercises its option (a c £5m valuation uplift and a 5.3% increase in BSRT's NAV vs end-April 2025). For now, BSRT has refrained from revaluing Futura pending a binding offer from IRH.

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