(Bloomberg) -- California Pizza Kitchen Inc. is looking to refinance debt from its bankruptcy exit as its owners mull a potential sale or initial public offering of the pizza chain, according to people with knowledge of the matter.

The Los Angeles-based chain has tapped Guggenheim Partners LLC to advise on the refinancing, which would target the $177 million of debt left on its balance sheet after it emerged from bankruptcy last November, the people said, who asked not to be identified discussing confidential matters.

The exact timing of the refinancing has not been decided, but it could be launched in the coming weeks, the people said. Guggenheim acted as the company’s financial adviser during its bankruptcy, according to court filings.

California Pizza Kitchen wants to reduce borrowing costs in anticipation of a potential sale to a strategic party or an initial public offering, spurred by improved sales as pandemic restrictions end in the U.S. and the return of full-capacity, in-person dining in California, the people said.

A representative for California Pizza Kitchen declined to comment, while Guggenheim didn’t immediately respond to a request for comment.

The chain filed for Chapter 11 in Texas last July and reached an agreement with its creditors to eliminate more than $220 million of debt by converting it to equity in the restructured business. Its first-lien debt has an interest rate of 1,000 basis points above the London interbank offered rate, according to Bloomberg data.

A return of in-person dining in California has pushed its average weekly sales to about $10 million, compared to $8 million to $9 million in April and May, the people said. Its annualized earnings are expected to be above $60 million for June, compared to around $50 million before the pandemic, the people said.

California Pizza Kitchen was founded in Beverly Hills in 1985 by lawyers Rick Rosenfield and Larry Flax, according to its website. It has about 200 restaurants in 8 countries and U.S. territories.

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