SK hynix to raise up to $29.4 bil. via Nasdaq ADR offering

An aerial view of SK hynix's plant in Icheon, Gyeonggi Province / Courtesy of SK hynix

SK hynix is set to raise up to 45.45 trillion won ($29.4 billion) through an American depositary receipt (ADR) offering backed by newly issued shares, expanding its global investor base and funding major semiconductor projects.

The chip giant said Wednesday that its board approved the ADR issuance, with the securities set to debut on Nasdaq on July 10.

Depositary receipts are bank-issued securities that represent shares in a foreign company, allowing investors to trade them on local exchanges.

Under the offering structure, newly issued common shares will be deposited with a local custodian in Korea, and a U.S. depositary bank will issue ADRs representing those underlying shares for trading on Nasdaq.

The indicative price is set at 255,500 won per ADR, based on the company's Tuesday closing price of 2.555 million won for the underlying common shares. Each ADR will represent 0.1 of a common share, with up to 17.79 million new shares to be issued under the offering.

Bank of America, Citi, Goldman Sachs and J.P. Morgan are acting as joint lead underwriters for the offering. The Korea Securities Depository will serve as custodian, while Citibank will act as the depositary bank.

SK hynix plans to file regulatory registration statements in both Korea and with the U.S. Securities and Exchange Commission. Once those filings become effective, the chipmaker will launch the offering process, conducting a series of roadshows for institutional investors across the United States, Europe and Asia ahead of the listing.

The ADRs are expected to begin trading on the Nasdaq Global Select Market Composite on July 10, with settlement set for July 14. The final size and pricing of the offering will be determined through bookbuilding, after which SK hynix will file amended disclosures.

The company is also expected to conduct roadshows for institutional investors across the United States, Europe and Asia ahead of the listing.

SK hynix said it will use the entire 45.45 trillion won in proceeds to fund capital expenditures, including building a semiconductor cluster in Yongin, Gyeonggi Province.

The proceeds will also be used to fund a P&T7 facility in Cheongju, North Chungcheong Province, a fab dedicated to advanced packaging for AI memory chips such as high-bandwidth memory (HBM), and to purchase high-tech equipment such as extreme ultraviolet scanners.