20.2.2008 Official Journal of the European Union L 4433 COMMISSION DECISION of 25 September 2007 on the measures C 47/2003 (ex NN 49/2003) implemented by Spain for Izar (notified under document number C(2007) 4298) (Only the Spanish text is authentic) (Text with EEA relevance) (2008/141EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, and in particular the first subparagraph of Article 88(2) thereof, Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof, Having called on interested parties to submit their comments pursuant to the provisions cited above (') and having regard to their comments, Whereas: I. PROCEDURE (1)  In March 2000, the Commission learnt that three delivery guarantees had been granted by the Spanish public holding company Sociedad Estatal de Participa- ciones Industriales (SEPI) to Repsol/Gas Natural (Repsol) in relation to the construction and delivery of three LNG tankers contracted to two public shipyards belonging at the time to Astilleros Espafioles (AESA), and subse- quently transferred to the Izar group. AESA and Izar were wholly owned by SEPL (2) By letter dated 9 July 2003, the Commission notified Spain of its decision to initiate proceedings under Article 88(2) of the Treaty concerning the three non- notified measures. (3) By letters dated 5 August 2003 and 22 October 2003, the Spanish authorities submitted their comments on the Commission’s letter. The Commission received comments from one interested party (Repsol) in October 2003 and February 2004. It forwarded them to Spain, which was given the opportunity to react. The comments from () O] C 209, 4.7.2003, p. 24. Spain were received in letters dated 12 January 2004 and 10 May 2004, respectively. (4 In the context of two State aid decisions not related to the present procedure (), adopted during 2004 (i.c. after the opening of the formal investigation concerning the LNG tanker guarantees), the Commission found State aid of EUR 864 million granted to Izar by Spain to be incompatible with the Treaty, and ordered its recovery. (5) By letter dated 5 August 2004, Spain invoked Article 296 of the Treaty (°) with the objective of rescuing the military shipbuilding activities from a foreseeable bank- ruptcy of Izar, as a consequence of that recovery order. In subsequent correspondence, the Spanish authorities also explained to the Commission how the new military shipbuilding company formerly known as Bazdn (Navantia) would function, outlined their commitments in relation to the competition concerns, and proposed a methodology for the follow-up of those commitments. (6)  In the meanwhile, the pending recovery orders on Izar, for a total of EUR 1,2 billion (%), had led the company to a situation of negative net worth, and technical bank- ruptcy. In view of this, on 1 April 2005 Spain put into liquidation the civil shipyards that remained in Izar (ie., shipyards outside the perimeter of the newly created Navantia: Gijon, Sestao, Manises and Seville), and launched a privatisation procedure for those yards. II. DESCRIPTION OF THE AID MEASURES (7)  In 1999, Repsol awarded three shipowners one contract each for the chartering of one LNG tanker each, plus the option for one extra tanker each, under a long-term time-charter arrangement. (%) Cases C 382003 and C 40/2000. (%) This Article 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’. (* In addition to the two 2004 decisions, an older decision from 1999 (Case C 3/99) also requested from Izar recovery of a further EUR 111 million.