MUMBAI: United Film Organizers (UFO) Moviez, a subsidiary of Apollo International Ltd, has raised $22 miilion (Rs 1 billion) of equity financing from UK-based 3i Group to fund its expansion plans.

3i Group has subscribed to cumulative convertible preference shares and has the option to invest an additional $3 million at a later date. Indiantelevision.com had earlier reported that UFO was in the process of raising venture capital (VC) funding of $25 million (Rs 1.13 billion) and had mandated Ernst & Young for this.

"3i has the option to put in an additional $3 million within this year. The exact holding of 3i will be arrived at based on our performance by FY09. That is the time when the preference shares will be converted," says UFO Moviez CEO Sanjay Gaikwad.

UFO will be using the capital to invest in hardware as it plans to expand its footprint in India and overseas. The immediate expansion plans include Middle East, South East Asia and Africa and the company says it is ready to roll out in January itself.

UFO Moviez is currently present in 600 theatres across India and plans to create a chain of 3000 digital cinema houses worldwide by 2008.

3i had entered the Indian market when last year it picked up around 33 per cent stake in Mumbai-based Nimbus Communications for Rs 1.97 billion