Equity sale for CVC-backed Indonesian Internet firm slashed by a third

* Shareholders now seek to raise around $455 million

* Second Indonesian deal to be scaled back this month

* But deal has attracted a range of cornerstone investors (Recasts and adds details throughout)

By Eveline Danubrata and Fransiska Nangoy

JAKARTA, Oct 24 (Reuters) - A planned sale of shares in Indonesian Internet service provider PT Link Net Tbk by CVC Capital Partners and other shareholders has been cut by a third to around $455 million as investors fret over prospects for reform in the country.

Concern that new President Joko Widodo will not be able to push through reforms smoothly has mounted as opposition parties have made gains in parliament, while at the same time global equity markets have been hit by falls in oil prices and a mixed picture on Chinese manufacturing.

It is the second Indonesian deal this month to be scaled back. A planned IPO for the nation's biggest taxi operator PT Blue Bird was also cut by around a third to $200 million, according to IFR, a Thomson Reuters publication.

CVC (Taiwan OTC: 4744.TWO - news) , PT First Media Tbk and two other minority shareholders will now seek to raise 5.5 trillion rupiah, a term sheet showed, which compares with initial plans to seek as much as 8.2 trillion rupiah.

The size of the offering has been cut to 30 percent of Link Net shares from 40 percent and the price was set at 6,000 rupiah per share, below an earlier indicative range of 6,200 rupiah to 6,700 rupiah.

"It's the market volatility and with Jokowi's rather unstable start, people are getting a bit cautious," said a person familiar with the matter who declined to be identified as he was not authorised to talk to the media.

First Media, the media arm of Indonesian conglomerate Lippo (HKSE: 0226-OL.HK - news) Group, declined to comment on the reason behind the smaller offering. Representatives for CVC did not immediately reply to requests for comment.

But the person noted that the deal had attracted some strong cornerstone investors who committed a combined $250 million. These included fund manager BlackRock Inc (NYSE: BLK - news) , hedge fund firm Och-Ziff Capital Management Group LLC and Goldman Sachs Investment Strategies, a source with direct knowledge of the matter said last week.

Under the deal, CVC's unit Asia Link Dewa Pte Ltd will cut its stake to 33.4 percent from 49 percent while First Media will cut its stake to 33.6 percent from 41 percent.

Link Net shares were down 0.4 percent at 7,000 rupiah on Friday, in line with the broader market. (1 US dollar = 12,063.00 rupiah) (Reporting by Eveline Danubrata and Fransiska Nangoy in JAKARTA; Additional reporting by Fiona Lau of IFR and Elzio Baretto in HONG KONG; Editing by Edwina Gibbs)