IZAR was founded in December 2000 following the merger of Astilleros Españoles S.A. (AESA) and Empresa Nacional Bazán. It has become Spain's leading state-owned shipbuilding firm, offering its services to both military and civil projects. It is the second largest shipbuilding company in Europe, and the ninth largest in the world. It has shipyards all over Spain, one of the most famous being the Naval de Sestao shipyard, where on the 16th of September 2004 12 employees were injured when police in Bilbao in the Basque region of Northern Spain fired rubber bullets at workers demonstrating in protest of a rescue plan for the foundering enterprise. Witnesses said that the workers had set barricades on fire, and hurled stones, bolts and fireworks at security forces. The proposal by Izar's owners, the state holding company SEPI, called for the separation of the company's military construction unit, it's most profitable venture, from the civilian operation, which would be partially privatised. Izar had been in crisis since European Union authorites demanded in May 2004 that it repay 300 million euros (362 million dollars) of EU aid that Brussels regarded as having breached competition rules. The shipbuilding sector in Spain had been struggling in the face of tight competition from Asia.