Australian banks caught in Peabody legal action

Three of Australia's big four banks could be hit by an attempt by bankrupt coal producer Peabody Energy to reclassify some of its long-term debt as current liabilities, which would favour unsecured creditors over secured lenders, including the big banks, according to the Australian Financial Review.

The North American giant filed for chapter 11 bankruptcy protection in April with $US10 billion of debt. However, its Australian operations are not affected by the move and continue to operate as normal. Most of the funding provided to Peabody by Australian banks is to this unscathed Australian arm of the coal giant.

Arrium sale process to start in late July

Arrium's administrators KordaMentha will officially start a formal process in late July for the sale or recapitalisation of the collapsed steel company and say they have been contacted already by many “credible” local and international parties, according to the Australian Financial Review.

They aim to have that process finished by the end of 2016 and say the first phase of stabilising the group's operations has been “successfully achieved”, with the focus now switching to the sale process.

Bluescope shares surge on earnings upgrade

Bluescope Steel shares surged Monday on a surprise earnings upgrade from a housing boom and cost reductions that will help push underlying pre-tax profit to around $500 million this financial year, according to the Australian Financial Review.

The underlying profit before tax for the June half is now expected at around $270 million, it said, which is substantially above the earlier forecast of $209 million given to investors in February.