KUALA LUMPUR (Jan 4): The Securities Commission has approved the proposed warrants exchange between AIRASIA BHD [] and MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) under a tie-up between both airlines.

The airlines said in their statements to Bursa Malaysia on Wednesday the SC has approved the warrants exchange under the Capital Markets and Services Act 2007 of Malaysia.

However, the exchange was subject to the condition that their investment banks and the airlines comply with the relevant rules pertaining to the implementation of the proposal as stipulated under the SC's Equity Guidelines.

In August, 2011, the tie-up would see Khazanah Nasional Bhd, which owns 69.5% in MAS, taking up a 10% of shares in AirAsia. Tune Air Sdn Bhd, which owns some 23% in AirAsia will hold 20.5% shares in MAS.

The partnership was estimated to potentially save both airlines as much as RM1 billion annually.