Italian oil contractor Saipem said on Wednesday it will ask investors for up to 3.5 billion euros (2.5 billion pounds) of fresh capital to help it weather the oil service recession and plot a path to recovery as main investor Eni SpA (ENI.MI) takes a step back.

Saipem (SPMI.MI), which is 43 percent owned by Eni, said the rights issue, part of its new turnaround plan, would be completed in the first quarter of next year.

At the same time Eni said it had agreed to sell a stake of around 12.5 percent in Saipem to state-controlled Fondo Strategico Italiano (FSI) in a move that will allow it to get the oil contractor’s debt off its balance sheet.

Eni said it and FSI were both committed to subscribing their respective shares of the rights issue, adding it expected net proceeds for Eni to be about 5.4 billion euros with a net debt reduction of around 5.1 billion euros.

State-controlled Eni, which funds Saipem debt through its A- credit rating, is looking to focus on its bread-and-butter business of finding oil and gas and is keen to get its subsidiary on a standalone footing.

Saipem, which expects to secure an investment grade rating, said the 3.2 billion euros of gross debt remaining after the rights issue would be refinanced by new credit lines.

“Today’s announcement marks a turning point for Saipem: we have a new shareholder structure, a strengthened balance sheet, a new strategic plan,” Saipem CEO Stefano Cao said.

With margins and orders battered by low oil prices, Saipem needs a large capital injection to get the group back on its feet.

It has issued two profit warnings in just over 30 months and in July announced cost cuts including 8,800 redundancies.

Saipem will present its “Fit for the future” turnaround plan to the investors and analysts in London later on Wednesday.