TechnipFMC Plc announced the sale of shares it holds in its recent spinoff, Technip Energies, which analysts see as “a step in the right direction.”

“Nice positive as investors want to see FTI trim their net debt levels to achieve ‘high and tight’ balance sheet status,” analysts with Tudor, Pickering, Holt & Co. (TPH) wrote in an April 27 research note.

TechnipFMC is an oilfield services company incorporated in the U.K. with headquarters in Houston. In March, it completed the spinoff transaction of Technip Energies, creating a “leading engineering and technology company for the energy transition.”

Post the spinoff, TPH analysts estimate TechnipFMC had about $2.2 billion pro-forma net debt.

The selldown of TechnipFMC’s stake in Technip Energies announced April 26 comprised of a private placement of 25 million Technip Energies shares, representing 14% of Technip Energies’ share capital. Concurrently, Technip Energies agreed to purchase 1.8 million of its shares from TechnipFMC.

TechnipFMC retains a direct stake of 31% of Technip Energies’ share capital upon completion of the private placement. According to the company release, TechnipFMC also agreed to a 60-day lock-up for its remaining shares in Technip Energies following the private placement.

TPH analysts estimate TechnipFMC pulled in roughly $359 million from the sale consisting of $335 million in gross proceeds from the private placement plus another $24 million from the 25 million-share placement to Technip Energies.

“TechnipFMC likely won’t sell incremental shares for another 60 days given the lock-up noted in the press release,” the analysts continued, “but we continue to believe they’ll whittle their equity interest down very materially over the next ~12-16 months.”