K’Osewe four star Kisumu hotel set for auction over Sh330m debt

A stalled four-star hotel in Kisumu, Blue Waters Hotels Ltd, belonging to K’Osewe eateries owner has finally been put up for auction over a Sh330 million bank debt.

The seven-storey hotel in high-end Milimani Estate sits on 1.3 acres and will be sold when the auctioneer's hammer falls on January 22, putting a dent on meteoric rise of businessman William Guda Osewe.

The Osewes owe Guaranty Trust Bank more than Sh330 million, secured using the Kisumu hotel and a block of apartments in Nairobi’s South C.

The bank has been trying to auction the property since 2018 amid multiple court suits before Judge Thripsisa Cherere in October cleared the sale of the stalled hotel.

“The development comprises an incomplete seven storey building with a mezzanine floor which is 60 percent complete and semi detached double storey building which is 27 percent complete,” says Garam Investments — which is leading the auction—and is demanding a Sh1 million deposit ahead of auction.

Mr Osewe is the latest prominent personality to have fallen into hard times as they battle auctioneers over unpaid bank loans. They are struggling to hold onto their prime assets over mounting bank loans as Kenya’s economy slows down and repossessions pick up.

Mr and Mrs Osewe sued to stop the bank from doing so, arguing that they have been servicing the loan.

After the judge lifted the order barring the auction of the properties in October, the couple filed an application in court, intending to appeal.

The Osewes argued that their property is valued at four times the loan. They added that the Kisumu hotel is on a prime beachfront and would be difficult to replace if the auction goes on. They said adverse action on the Kisumu property would spell doom for their franchising deal with Marriott and Aleph.

Guaranty Trust Bank, however, insisted that the Osewes have defaulted on their loan and that they are only buying time with another court order barring the auction.

The bank said it is not a party to the franchising agreements.

Bluewaters had signed franchising deals with Dubai’s Aleph Hospitality and American giant Marriott International. It was expected to join the prestigious league of Protea Hotels by Marriott in 2022.

Mr Osewe who has grown into one of the pillars of Nairobi’s food culture, owing to his Ranalo Foods or K’Osewe, has gone through turbulent times in the past three years.

On July 30, Bensure Auctioneers sold hundreds of items at Ranalo Foods Upper Hill, marking the end to the branch.

Shortly after opening the Ranalo Foods branch in Kisumu last year, it emerged that the restaurant was on Kenya Railways land. It was demolished but later reopened at another location.

In 2018, Mr Osewe escaped death narrowly when his friend Tom Oywa Mboya shot him three times.