- National Treasury has moved to prevent the auction of Sony Sugar property over a KSh862.3 million bank debt.
- Awendo MP Walter Owino says Treasury will fast-track settlement of the outstanding Co-operative Bank facility.
- The intervention is also expected to address arrears owed to sugarcane farmers and factory workers.
- Co-operative Bank had issued Sony Sugar with a 40-day notice to clear the debt or risk losing its secured property.
The National Treasury has stepped in to stop the planned auction of property belonging to South Nyanza Sugar Company Limited, commonly known as Sony Sugar. The intervention follows a demand by Co-operative Bank of Kenya over an outstanding debt of KSh862.3 million. Awendo MP Walter Owino announced the development on Tuesday, August 18, saying the government had taken action after concerns emerged over the threatened sale of the company’s land.
Owino said the debt had already been recognised as part of the public pending bills during the government’s restructuring of state-owned sugar companies. He said Treasury Cabinet Secretary John Mbadi had committed to accelerating an arrangement that would settle the bank facility. The move is expected to prevent the forced sale of the public asset.
The development comes as the government continues efforts to restructure the sugar industry and make state-owned millers more commercially sustainable. Sony Sugar is among the companies that have undergone changes in ownership and management arrangements in recent years. The government has previously said restructuring is intended to revive the sector and improve its financial position.
The Treasury intervention came after Co-operative Bank issued Sony Sugar with a statutory notice threatening to exercise its power of sale. The bank said the company had failed to rectify its default despite an earlier notice. The outstanding amount was listed as KSh862,328,980.41 as of July 14, 2026.
The property identified in the notice was L.R. No. 16339/1, registered in the name of South Nyanza Sugar Company Limited. The lender gave the company 40 days from the date the notice was served to clear the outstanding balance. Failure to do so would have allowed the bank to proceed with the sale of the secured property.
The threatened auction raised concern among farmers and other stakeholders because of Sony Sugar’s importance to the local economy. Reports indicated that farmers feared losing an important part of the sugar value chain if the company’s assets were sold.
Owino said his discussions with CS Mbadi had resulted in a commitment from Treasury to expedite a settlement agreement with Co-operative Bank. According to the MP, the intervention effectively addresses the immediate threat of the auction. He said the government’s priority was to protect Sony Sugar’s assets and the livelihoods connected to the miller.
The MP further said the intervention would go beyond the bank debt. He stated that outstanding payments owed to sugarcane farmers and factory employees would also be addressed. This would provide relief to different groups that depend on the company for their livelihoods.
The timing is significant because Sony Sugar has faced financial difficulties and accumulated obligations for years. Parliamentary records have previously highlighted debts owed by state-owned sugar companies to farmers, suppliers, employees and financial institutions.
Owino said the Treasury plan would include the clearance of long-standing arrears owed to farmers and factory workers. He did not provide a specific date for when the payments would be made. Instead, he said Sony Sugar management would communicate the operational timelines through official channels.
The issue of farmer payments has previously been a major concern around Sony Sugar. In May 2025, sugarcane farmers in Migori demanded payment of about KSh317 million they said the company owed them for cane delivered to the mill. More than 2,000 farmers were reported to be affected at the time.
The latest Treasury intervention could therefore ease pressure across the local sugar industry. Clearing the bank liability would protect the company’s property, while settling farmer and staff arrears could improve confidence among those who depend on Sony Sugar. The government will now be expected to follow through on the commitments announced by Owino.
The development comes after major changes in the management of Sony Sugar. In May 2025, Busia Sugar took over the operation of the company under a 30-year lease after winning a government tender. The transition was part of a wider restructuring programme involving several state-owned sugar companies.
The government has continued to describe the restructuring as an effort to revive the sugar industry and make the companies more sustainable. Sony Sugar’s official website currently identifies the company as South Nyanza Sugar Company 2025 Limited and lists sugar production, cane development, harvesting and transport among its core operations.
For residents of Awendo and surrounding areas, protecting the company’s assets is also about protecting an important source of economic activity. Farmers supply cane to the mill, while workers and businesses depend on its operations. An auction of key property could therefore have consequences far beyond the debt dispute between the company and its lender.
With Treasury now promising to settle the Co-operative Bank facility, attention will shift to the implementation of the agreement. The bank had warned that even payments made after the statutory notice would not automatically prevent it from exercising its rights over the secured property. The government will therefore need to ensure the promised settlement is completed within the required process.
Owino said further information on payments to farmers and employees would be communicated by Sony Sugar management. The MP did not give a specific date for those disbursements. Stakeholders will now be watching for confirmation that the bank debt has been settled and the auction threat formally lifted.
The immediate crisis may have been contained, but Sony Sugar still faces the wider challenge of financial sustainability. The Treasury intervention protects the company’s property for now, while the planned settlement of farmer and staff arrears could provide much-needed relief. The long-term test will be whether the restructuring can put the miller on a stable financial footing.
