(Bloomberg) -- A group of National CineMedia Inc.’s creditors have hired Centerview Partners to explore options as some debt maturities are fast approaching and the outlook for theaters remains cloudy, according to people with knowledge of the situation.

Gibson Dunn & Crutcher has been providing legal advice to the group of lenders which mainly consists of term loan holders and also includes some secured bondholders, said the people, who asked not to be identified because the matter is private.

Representatives at National CineMedia and Centerview declined to comment. Gibson Dunn didn’t respond to request for comment.

While National CineMedia has benefited from improved theater attendance, they are lagging historical levels and a weakening economy could further hamper recovery for the cinema advertising company that is sitting on $1.13 billion in debt. 

On Aug. 8, National CineMedia reported second-quarter revenue that rose to $67.1 million, outstripping the year-ago period’s $14 million and beating the average Wall Street estimate. Operating income swung to $5.6 million from a loss of $29.6 million year-over-year. 

Management said it was hopeful that upcoming blockbuster releases would help lift its advertising business as it focuses on debt due in June 2023.

But such a boost may be in doubt.

Advertising clients will likely pull pack on spending in cinemas as risk of a recession grows, Standard & Poor’s wrote on July 22. This is especially untimely because National CineMedia could not secure its typical advertising up-front deals this year due to an uncertain recovery in the box office, the rating agency said.

The company will need to tackle its revolvers due June 2023 and loosen covenants, said S&P, citing expectations that total debt will be roughly 14 times earnings this year. 

National CineMedia’s first-lien term loan due 2025 is quoted at around 73 cents on the dollar, down from 81 cents on Aug. 8, according to Bloomberg-compiled data. The 5.875% first-lien bond due 2028 traded at around 58 cents, while the 5.75% unsecured notes due 2026 changed hands at roughly 20 cents, Trace data shows.

Given lower revenue and market uncertainties, the company has been trying to preserve flexibility by cutting payroll and headcount. It ended June with $74.4 million of cash, including $16.6 million held at subsidiary National CineMedia LLC. 

National CineMedia Inc. owns roughly 47% of the limited liability company.

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