MUMBAI: Bajaj Auto, the country's second-biggest two-wheeler maker, is likely to take a decision on May 17 for carving out the company's auto and financial business into separate entities.

The company on Thursday informed the Bombay Stock Exchange that its Board of Directors would meet on May 17 to consider a proposal for demerger, besides taking up the audited financial results and dividend for 2006-07.

Bajaj Auto chairman Rahul Bajaj had in the past said the company intended to unlock shareholders value by splitting the manufacturing and financial assets into two separate entities.

At present, the company has cash reserves of around Rs 8,000 crore and a market capitalisation of about Rs 25,950 crore. The shares of the company closed at Rs 2,609, up 1.74 per cent on BSE on Thursday.

The auto and finance entities are expected to be headed by Rahul Bajaj's sons Rajiv and Sanjiv respectively.

Rahul Bajaj had earlier said the proposed demerger would not have any bearing on the company's joint ventures with German financial firm Allianz.

Bajaj Auto has joint ventures with Allianz -- Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance --in which it is the majority partner.

The demerger process is expected to take long as after the board approval, it would have to get regulatory and High Court clearances.