SK hynix is said to be reviewing a fee rate of around 0.5% to pay the underwriters for its American depositary receipt (ADR) listing.
According to a Bloomberg report on the 4th (local time), SK hynix is discussing performance-based compensation with its ADR listing underwriters Bank of America, Citigroup, Goldman Sachs and JPMorgan based on this fee rate.
Bloomberg said the 0.5% fee rate SK hynix is reviewing is lower than the fee rate for SpaceX's initial public offering (0.67%) and is also low compared with Wall Street practice.
However, given SK hynix's recent market capitalization, the amount of funds it could raise through an ADR listing would reach $26.5 billion (about 40.545 trillion won), putting total fees at about 200 billion won.
Bloomberg projected that the SK hynix ADR listing would be a large equity offering in terms of fundraising size, following SpaceX (about $86 billion) and Aramco (about $29.4 billion).
Previously, SK hynix disclosed it plans to issue ADRs backed by common shares (17.79 million shares), up to 2.5% of total shares outstanding, as the underlying asset, but the actual volume and size will proceed after demand forecasting.
The ADR listing SK hynix is pursuing would allocate newly issued shares to the depositary bank as a third-party allotment to create securities, enabling the overseas stock to trade in the U.S. market.