SEOUL, July 04 (AJP) - SK hynix is considering paying underwriting fees of about 0.5 percent of the proceeds for its planned U.S. American Depositary Receipt (ADR) offering, a level that could generate one of Asia's largest investment banking fee pools this year, Bloomberg News reported on Saturday.
The South Korean memory chipmaker is in discussions with Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase over underwriting fees and incentive compensation for the planned ADR listing, Bloomberg reported, citing people familiar with the matter.
Based on SK hynix's recent market capitalization, the offering could raise as much as $26.5 billion, implying underwriting fees of roughly $130 million, or nearly 2 trillion won ($145 million), if the proposed 0.5 percent fee is applied. The final terms remain subject to change.
While the proposed fee would be below the roughly 0.67 percnet underwriting fee reported for SpaceX's recent fundraising, the sheer size of the transaction could make it one of the largest fee-generating equity offerings in Asia this year, Bloomberg said.
The report added that the ADR sale could rank among the world's largest share offerings, alongside SpaceX's approximately $86 billion fundraising and Saudi Aramco's roughly $29.4 billion initial public offering.
SK hynix's long-standing listing on the Korea Exchange and its growing prominence among global technology stocks are expected to help attract overseas institutional investors, potentially easing the marketing burden for underwriters, according to the report.
The company previously said it plans to issue ADRs backed by up to 2.5 percent of its outstanding common shares. The final offering size and number of shares will be determined following book-building with institutional investors.
An ADR is a negotiable certificate issued by a U.S. depositary bank that allows foreign companies' shares to be traded on U.S. exchanges.
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