Why Is Wiseway Now Seeking Shareholder Approval for Key Leases?

Background on the Lease Arrangements

Wiseway Group Limited (ASX, WWG), a leading integrated logistics provider, has disclosed it should have obtained shareholder approval under ASX Listing Rule 10.1 for certain related party lease arrangements with RFT Investment Management Pty Limited. These leases, which underpin the company’s warehousing and logistics operations across South Australia, Western Australia, and other regions, were initially disclosed during the company’s 2018 IPO and subsequent market announcements in 2019.

At the time, Wiseway believed that shareholder approval was not required for the renewal of these leases or for entering into new leases with RFT, as the arrangements were either previously disclosed or considered below the materiality threshold. The company also relied on an ASX waiver for the renewal of initial leases.

ASX Review and Compliance Determination

Following consultation, the ASX has taken a different view, concluding that the lease renewals and new leases, when considering the full term including options, exceed the 5% equity interest threshold that triggers the requirement for shareholder approval. This means Wiseway should have sought approval before exercising renewal options or entering into the Western Australian and South Australian leases.

The ASX’s determination highlights the importance of strict compliance with related party transaction rules, especially when such leases form a substantial part of a company’s operational infrastructure.

Wiseway’s Proposed Remedy and Next Steps

In response, Wiseway has committed to convening a general meeting as soon as practicable to seek retrospective shareholder approval for the lease renewals and new leases, including all past and future payments under these agreements. The company has also stated it will suspend any further lease payments until approval is obtained.

To support this process, Wiseway will commission an Independent Expert’s Report to assess whether the transactions are fair and reasonable to shareholders not associated with RFT, in line with ASX Listing Rule 10.5.10. This step aims to reassure investors about the commercial terms of the leases.

Operational Impact and Market Implications

Importantly, Wiseway confirms that this compliance issue does not affect its current operations. The leases remain critical to the company’s logistics network, which spans Australia and the Asia-Pacific region. However, the pause on lease payments until shareholder approval is secured introduces a degree of financial and operational uncertainty in the short term.

Investors will be watching closely how the shareholder meeting unfolds and whether the Independent Expert’s Report supports the fairness of the arrangements. The episode underscores the ongoing challenges companies face in navigating related party transactions within ASX’s regulatory framework.