Shein to Pay $39 Million in Fees for Team of Banks in Hong Kong IPO
Shein's Hong Kong IPO: Fees, Underwriters, and Market Context
By Selena Li
IPO Fee Structure and Comparison
HONG KONG, Aug 24 (Reuters) - Fast-fashion giant Shein said it would pay up to HK$306 million ($39 million) in total fees for an expanded line up of underwriters of its Hong Kong initial public offering, its prospectus showed on Monday.
The total fee rate, accounting for roughly 2.2% of fresh capital it seeks to raise, appears lower than recent large initial public offering in the Hong Kong market.
Comparison with Recent IPOs
China's autonomous driving firm Momenta Global, which paid around 3.4% in total underwriting fees in its $752 million Hong Kong listing in July.
Factors Influencing Fee Structure
The lower fee structure comes as the fast-fashion giant looks to raise up to $1.77 billion, in a deal that values the company at about $27 billion
Shein said bank would enjoy a discretionary incentive fee without disclosing the rate.
Underwriters and Deal Arrangements
Expanded Team of Banks
The company has assembled a larger team of banks to arrange the deal amid growing pressure to lower the valuation since the deal kick-start, due to stronger tax and regulatory headwinds and stiffer competition.
Main and Additional Underwriters
The roster includes its three main banks – Goldman Sachs, Morgan Stanley, J.P. Morgan – which stayed with the high-profile e-commerce giant through its earlier efforts to list in the U.S. and Britain.
Chinese bank Haitong International and UBS were added later when it first disclosed the advisor line-up for its Hong Kong listing, followed by four more underwriters – HSBC, Bank of America Securities, Banco Santander, and East West Bank – the offering document showed.
Additional Information
($1 = 7.8372 Hong Kong dollars)
(Reporting by Selena Li; Editing by Stephen Coates)
