December 3, 2013 / 3:56 AM / in 4 years

UPDATE 1-Indonesian taxi firm Blue Bird to delay 2013 IPO-sources

* Regulatory approval not given in time-sources

* Delay is latest setback for Indonesian IPO market

* Listing in 2014 clouded by issue of national elections

* Company not wedded to IPO, could tap strategic investors (Adds details on country’s IPO market, analyst quotes)

By Andjarsari Paramaditha and Fathiyah Dahrul

JAKARTA, Dec 3 (Reuters) - The planned initial public offering of Indonesia’s biggest taxi operator, PT Blue Bird, will not happen this year after the company failed to receive regulatory approval in time, sources with knowledge of the matter said on Tuesday.

Blue Bird is the latest setback for Indonesia’s IPO market, which has been rocked by volatility in global markets and high valuations. Several stock offerings in the country, such as PT Bank Muamalat, have been delayed or cut in size.

Bluebird’s IPO, which sources earlier said could raise at least $250 million, was set to be the next biggest IPO in Indonesia since the national carrier PT Garuda Indonesia’s offering, which raised $526 million in 2011.

The Indonesian equity capital market has been in the doldrums since the middle of the year soon after the U.S. Federal Reserve began to signal that it may slow down bond purchases.

This happened after CVC Capital Partners and PT Multipolar Tbk raised around $1.3 billion by selling part of their stake in Indonesian retail giant PT Matahari Department Store in March, which had raised expectations of a strong year for Indonesia’s equity capital raisings.

Blue Bird’s shareholders are still considering whether or not to go ahead with an IPO next year because national elections are scheduled, said a source with direct knowledge of the matter.

“Generally speaking, the first half of next year will be challenging for potential IPOs due to the run-up to the election, and as investors may choose to stay on the sidelines,” said Maynard Arif, head of research at DBS Vickers in Indonesia.

“The macro environment in Indonesia is also still uncertain and investors may have other choices in markets outside Indonesia,” he added.

The Financial Services Authority of Indonesia, which regulates and supervises the financial services sector in Indonesia, earlier told Reuters it had not received complete documentation for Blue Bird’s planned IPO.

As a result, Blue Bird “has run out of time to do the IPO this year”, said one of the sources, who declined to be identified as the information was private. Blue Bird declined comment on the delayed IPO.

Blue Bird is not wedded to an IPO and may turn to strategic investors among other options to raise funds for expansion, a senior company executive told Reuters last month. The company plans to boost its taxi fleet by around 50 percent to 30,000 over the next few years.

Blue Bird operates in 17 cities and aims to expand further in Java, Sulawesi and Sumatra. It is also planning to boost its logistics business, which currently contributes around 10 percent to overall revenue. (Additional reporting by Saeed Azhar in SINGAPORE; Writing by Eveline Danubrata in JAKARTA; Editing by Matt Driskill)

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