KUALA LUMPUR (Sept 9): Star Media Group Bhd's Capital FM Sdn Bhd (CFSB), which operates Capital FM and Red FM radio stations, will be sold to Astro Malaysia Holdings Bhd's Measat Broadcast Network Systems Sdn Bhd for RM42 million.

In a filing with Bursa Malaysia today, Star Media said it entered into a conditional share sale and purchase agreement with Measat to dispose of five million shares of RM1 each in its wholly-owned CFSB.

Star Media said the disposal price is subject to adjustment after taking into consideration the quantum of the net working capital of CFSB as at the conditions fulfilment date.

However, the adjusted price is not expected to vary significantly, it said, adding that upon completion of the disposal, CFSB will cease to be its subsidiary.

"The disposal is to streamline the group's businesses to concentrate on profitable operations while divesting those that do not contribute significantly to its financials. The proposed utilisation of the proceeds is mainly for working capital," Star Media said.

Measat, wholly owned by Astro, is involved in the provision of television services.

The completion of the disposal is subject to relevant regulatory approvals and the fulfilment of the conditions precedent detailed in the agreement.

At closing, Star Media fell two sen or 0.77% to RM2.57 for a market capitalisation of RM1.9 billion.