Merali family's Sasini terminates $61 million Kenyan coffee estate sale after buyer defaults

Sasini Plc, the NSE-listed agribusiness company majority owned by the family of the late Kenyan billionaire Naushad Merali, has terminated its planned sale of the Gulmarg Division coffee estate in Kiambu County after the buyer failed to fulfil key contractual obligations by the agreed deadlines, the company disclosed in its half-year results released on June 4, 2026.

The Gulmarg Division, which is part of Sasini's Mweiga Estates Limited and carries a book value of Sh3.7 billion ($223 million) on the company's balance sheet, had been agreed for sale at Sh7.9 billion ($477 million) on September 17, 2025. The transaction would have generated a substantial capital gain for the company. It is now off the table.

"We also wish to notify all stakeholders that the sale transaction in respect of Gulmarg Estate, previously classified as an asset held for sale, has been formally terminated," Sasini said in a statement accompanying its half-year results. "The termination arose because of the purchaser's failure to fulfil key contractual obligations by the stipulated due dates. The Gulmarg Estate will accordingly revert to operational use and will no longer be classified as an asset held for sale in the company's financial statements."

Sasini did not publicly name the buyer who defaulted. The company did not indicate whether it intends to pursue legal remedies against the defaulting party or relist the asset for sale to a new buyer.

The collapse of the transaction is a significant setback for a company navigating one of its more challenging financial periods. In the six months to March 2026, Sasini reported a net loss of Sh170.8 million ($10.3 million), wider than the Sh113 million ($6.8 million) loss recorded in the same period a year earlier, despite revenue rising modestly to Sh3.01 billion ($181.6 million) from Sh2.96 billion ($178.6 million). The company cited adverse weather, geopolitical tensions and rising logistics costs driven by the ongoing Middle East conflict as the primary pressures on its operations, with tea segment headwinds particularly acute due to global oversupply depressing prices at the Mombasa Auction.

The sale of Gulmarg would have provided a substantial liquidity injection at a difficult operational moment. The Sh3.7 billion book value of the asset versus the Sh7.9 billion agreed sale price represented a premium of Sh4.2 billion ($253.5 million) in capital gains that Sasini will now not recognise, at least not from this transaction.

Sasini is controlled by the Merali family through three investment vehicles: Legend Investments Limited, Yana Towers Limited and East Africa Batteries Limited, which together hold a 65.46 percent majority stake in the NSE-listed firm. Legend Investments is the primary vehicle of the late Naushad Merali's estate and is now controlled by his widow Zarina Merali and their son Sameer Naushad Merali, who has quietly assumed stewardship of the family's multi-billion-shilling business empire since his father's death in July 2021.

Naushad Merali, born January 2, 1951, and died July 3, 2021, was one of Kenya's most celebrated entrepreneurs. He co-founded Kencell, the Kenyan mobile service provider later renamed Airtel Kenya, with French media giant Vivendi, and became famous in Kenyan corporate folklore for a boardroom manoeuvre that earned him a $20 million profit in one hour by exercising pre-emptive rights on his Kencell stake before transferring to Celtel in 2004. He built the Sameer Group into a conglomerate of 15 Kenyan companies spanning financial services, agriculture, information technology and manufacturing. His net worth was estimated at $370 million at his peak. Zarina Merali's current fortune is estimated at $220 million, while son Sameer's wealth has been estimated by Oxfam at $790 million, reflecting the full appreciated value of the family's portfolio since Naushad's passing.

The family's Sasini stake is currently valued at approximately Ksh2.53 billion ($19.6 million at the current NSE price), a figure that reflects the company's recent operational difficulties rather than the underlying land value of its agricultural estates. Sasini's total assets grew 54.52 percent to Ksh25.19 billion ($194.6 million) as of its last full fiscal year, driven primarily by plantation revaluations, and total equity stands at Ksh21.25 billion ($164.2 million).

Gulmarg Division itself generated a net profit of Sh10.6 million in the year ended September 2025, helped by growth in the value of its plantations. The division had posted a net loss of Sh6.3 million the year before, illustrating the volatile earnings profile of Kenyan coffee cultivation in the current commodity environment.

The failed sale continues a pattern of complex asset management decisions at Sasini. The company sold its former building on Nairobi's Loita Street for more than Sh600 million in 2015, and in the same year sold 513.7 acres of leasehold land in Nyeri for Sh1 billion, having exited two loss-making coffee estates in that region. With Gulmarg now reverting to operational use, Sasini must decide whether the asset is better deployed as a productive estate or relisted for sale at a later date when a more reliable buyer can be found.