(Repeats story published late Friday; no changes to text)
* ANZ seeking to sell 39 pct stake in Indonesia's Panin Bank
* Death of Gunawan family member puts process on hold-sources
* ANZ looking to scale back in Asia
By Swati Pandey and Saeed Azhar
SYDNEY/SINGAPORE, March 11 (Reuters) - The sale of ANZ Banking Group's ANZ.AX 39 percent stake in Indonesia's PT Bank Pan Indonesia Tbk (Panin) PNBS.JK has hit a roadblock after the death of a key member of the family that owns the biggest stake in the Indonesian lender, people familiar with matter said.
Disagreements among family members over terms and conditions of the sale are also delaying the process, said the sources who declined to be identified due to the confidential nature of the matter.
ANZ, which is scaling down its presence in Asia in the face of an economic slowdown around the region, launched a formal process to sell the stake in the second half of last year, attracting interest from bidders including Taiwan's Fubon Financial Holding Co Ltd and Japan's Mizuho.
The Gunawan family owns 46.5 percent of Bank Panin, Indonesia's eighth-biggest lender by assets, and their involvement is crucial for the sale to take place.
The sources said that the death of Tjitrawati Gunadi, wife of Panin Group founder Mu'min Ali Gunawan, has added to delays in the auction process, which envisaged bidders making a formal offer earlier this year.
"The sale is unlikely to materialise soon," one of the people said.
An ANZ spokesman declined to comment. Fadjar Gunawan, a representative of the Gunawan family, declined to comment on the sale process while Jasman Ginting Munthe, corporate secretary of Panin Bank said he was not aware of the details of the sale process because the decision is made at the shareholders' level.
It was not immediately clear when ANZ, which also needs to free up capital to boost its finances, would be able to revive the sale process, the sources said. ANZ's stake is worth an estimated $450 million.
Shares in Bank Panin, which has interests in banking, asset management and insurance, have fallen 21 pct this year, underperforming the benchmark Indonesia index .JKSE which is up about 4 percent over the same period.
Australia's four major banks together raised A$20 billion ($15 billion) since May last year and are looking to offload some non-core assets after regulators ordered them to set aside more reserves against their oversized mortgage books. Thursday, ANZ said it had closed its business lending to small and mid-sized enterprises (SMEs) in five Asian locations, cutting around 100 jobs. ($1 = 1.3389 Australian dollars)