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IZAR

IZAR ["hoist"] was, until the end of 2004, the main shipbuilding company in Spain. IZAR was founded in December 2000 following the merger of Astilleros Españoles S.A. (AESA) and Empresa Nacional Bazán. Its activities were spread over 11 sites in Galicia, Asturias, Basque Country, Valencia, Murcia, Andalucia and Madrid. It had around 10,700 employees. Around half of the sales concerned military production.

By two decisions in 2004 the European Union Commission decided that €864 million of state aid to IZAR was not in line with EC State aid rules and had to be recovered (see IP/04/633 and IP/04/1260). Spain invoked Article 296 of the EC Treaty, which allows a Member State to “take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war materials”, with the objective of rescuing the military shipbuilding activities from a foreseen bankruptcy of IZAR. This rescue would take place by transferring IZAR’s military shipyards to a new public company (Navantia).

On 30 July 2004 the Spanish Cabinet authorised Izar to constitute this new company in order to respond to the crisis facing these shipyard – basically due to the grave situation facing Izar and also because of the obligation to return subsidies that had been deemed incompatible with European Union norms – the framework of European law awarding independent treatment to the activity of military naval construction because of its special characteristics. The agreement signed with the trade unions on 16 December 2004 opened the way to find a solution and a future for Izar’s shipyards, including both the civil yards –through the inclusion of private venture capital- and the military ones that make up Navantia.

Once a plan of action in line with EU norms was agreed, the new company was initially constituted and was provisionally named New Izar. The aim was to integrate its military activity and enable it to carry out complementary activities in the civil field. On 17 December 2004, following the signing of the agreement, the Board of Directors of SEPI authorised Izar to transfer all the assets used for these military shipbuilding activities to New Izar and also the subsequent purchase by the State holding company of 100% of its shares. In January 2005 SEPI acquired all of the shares in New Izar, now called Navantia. This was recorded in the Company Register with the increase in company capital and the share ownership that had already been executed.

IZAR was put into liquidation on 1 April 2005. The liquidators plan to sell the remaining assets (shipyards in Gijon, Sestao and Sevilla and a motor factory in Manises). The sale of these assets should take place under market conditions, on an open, transparent and unconditional basis, as otherwise the buyers might find themselves obliged to pay the outstanding amounts of illegal state aid due to be recovered from IZAR.