A hotel belonging to the proprietor of Ranalo Foods, popularly known as K’Osewe, has been put up for sale, days after the Court of Appeal gave the nod for the auction of Kisumu-based Blue Waters Hotel over an unpaid loan of Sh300 million.
Garam Investments has invited bidders for the auction of the incomplete three-star property on September 26, piling pressure on hotelier William Guda Osewe, who has waged a spirited legal battle to save the 1.3-acre asset.
The development on the block situated in Kisumu's Milimani area comprises a seven-storey commercial building with a mezzanine floor and a semi-detached double-storey wing.
It features 24 guest rooms, including two executive suites, two conference rooms, a gym, salon, barber shop, and a swimming pool area.
Company records list Mr Osewe and his wife, Stella Mutheu, among the directors of Blue Waters Hotel. Besides the Kisumu property, an apartment in Nairobi’s South C was also charged as security for facilities advanced by Guaranty Trust (GT) Bank.
According to court filings, the sale stems from a Sh220 million term loan and a Sh10 million overdraft taken on May 12, 2014 to finance the 24-room establishment in Milimani as Mr Osewe sought to scale new heights in the hospitality industry.
He previously told the court he had lined up management and branding deals with Dubai’s Aleph Hospitality and Marriott International. He argued that the auction threatened this feat.
Rising from humble beginnings hawking njugu karanga and mishikaki in Nairobi’s Kaloleni estate, Mr Osewe built a celebrated African-cuisine brand at Ranalo Foods (K’Osewe), famed for Luo delicacies such as brown ugali and tilapia.
But the businessman later ran into financial headwinds, which he has said were triggered by a near-fatal shooting that left him incapacitated for more than three years.
On August 29, 2025, the Court of Appeal upheld a High Court decision and dismissed Mr Osewe’s argument that the establishment had a unique value, noting that sentimental considerations could not override commercial obligations.
Justices Asike Makhandia, Hellen Omondi, and Aggrey Muchelule held that, having offered the properties as security, the hotel directors assumed the risk of sale upon default.
“There is no doubt the amount owed to the bank continues to accumulate interest and may get to a level that it may not be recoverable to the detriment of the lender,” said the judges, giving the go-ahead for the auction.
As repayment pressures mounted, Blue Waters and GT Bank executed a series of restructurings that added layers of security to the credit. In addition to the charged properties, the lender took a company-wide floating charge over all Blue Waters assets.
There was also a corporate guarantee by Ranalo Foods Limited, backed by a board resolution—meaning the restaurant company agreed to stand behind the debt and can be pursued if Blue Waters defaults.
As part of the restructuring, Ranalo Foods also agreed to channel money into an escrow account for loan repayment. Mr Osewe and Ms Mutheu further guaranteed the loan personally, exposing their personal assets if the sale proceeds fall short.
This is not the first attempt to dispose of collateral. In 2021, Garam invited interested buyers to acquire the South C apartment, signalling early distress as timelines slipped and costs mounted on the Kisumu project.
The extent of losses remains unclear. Some estimates value the Kisumu property at up to Sh2 billion, but the outcome will hinge on the reserve price, competitive bidding, and accrued interest and penalties.
