BANGKOK (Dow Jones)--State-owned Islamic Bank of Thailand said Friday it's likely to offer the country's first Islamic bonds worth THB5 billion ($154.5 million) late in the third quarter or early in the fourth quarter, but a final decision will depend on market conditions.

The bank also plans to provide a greenshoe option of THB1 billion for the bond issuance, bank President Dheerasak Suwannayos told reporters.

The long-awaited bonds' maturity will be in a range of five to seven years, he said, adding that it would be sold to both retail and institutional investors.

CIMB Securities (Thailand) Co. will act as the bond's financial adviser.

The bank is working out details to clear a tax problem with the Finance Ministry to pave the way for the Sukuk issuance, he said.

The sale of Sukuk bonds in Thailand has been delayed for several years because of concerns over a withholding tax.

Proceeds arising from the issuance of the bonds will be used to finance the bank's business expansion, he said.

"If the bond's sale is a success, we may offer another THB5 billion bonds within this year," said Dheerasak.

Meanwhile, he said the bank's plan to acquire a 49% stake in Nava Leasing PCL (NVL.TH), a small consumer financial service provider, is part of its effort to offer a full-array of financial services under Shariah law and to focus more on its retail banking business.

Nava Leasing's board last month approved the Islamic Bank of Thailand's proposal, under which the bank will buy 265.5 million shares from existing shareholders through a tender offer and another 200 million shares from a capital increase at the same price of THB1.20 per share.

Nava Leasing's shareholders will meet on July 13 to endorse the plan.

Dheerasak said the deal is expected to be completed 60 days after the tender offer, though the period hasn't been set yet.