Jazztel Restructures Debt

MADRID, Spain -- JAZZTEL P.L.C. (“JAZZTEL” or the “Company”) as established in accordance witharticle 82 of the “Mercado de Valores” law 24/1988 of 28th July, announces thefollowing:

ANNOUNCEMENT

On 5 May 2009 JAZZTEL signed an agreement (the “Agreement”) with the principalholders (the “Principal Bondholders”) of the Bonds to restructure the debt representedby those bonds (the “Restructuring”). The Principal Bondholders, who includeBOUSSARD GAVAUDAN ASSET MANAGEMENT, hold, in aggregate, over 75% of theoutstanding Bonds, excluding the €23,670,000 in principal amount of the Bondscurrently held by JAZZTEL. The principal terms of the Agreement are as follows:

In accordance with the terms of the Agreement, JAZZTEL will acquire at a 50%discount up to an aggregate principal amount of €140 million of Bonds, giving aneffective debt reduction and a capital gain to the Company of up to €70 million less thefair value of warrants issued to Bondholders as detailed further below.JAZZTEL intends to raise up to €80 million through an issue of rights to subscribe fornew ordinary shares in the Company (the “Rights Issue”). Of the proceeds of the RightsIssue, up to €70 million will be used to repurchase Bonds and €10 million will beretained by the Company to strengthen its capital resources. The final price at whichthe shares will be issued pursuant to the Rights Issue shall be determined prior to theRights Issue subscription period.

The repurchase shall reduce the total amount of outstanding debt in the form of Bondsfrom €251.33 million (excluding the Bonds held by Jazztel) to between €111.33 millionand €119.33 million. The range of outstanding Bonds relates to the fact that if theRights Issue is more than 95% subscribed, the Company has the option of issuingadditional shares in exchange for bonds to cover the shortfall from the Rights Issue, orleaving a greater amount of debt outstanding up to €119.33 million. The €23,670,000 ofBonds held by the Company will be cancelled.

JAZZTEL’s chairman and principal shareholder Leopoldo Fernández Pujals, hascommitted to subscribe the ordinary shares he is entitled to subscribe under the RightsIssue as well as to vote in favor of any resolution which may be necessary toimplement the agreement at the different corporate levels.The remaining Bonds of up to, in aggregate principal amount, €119.33 million will havetheir maturity date extended by 3 years until April 2013, with periodic partialamortisations and a 9.75% coupon.

Jazztel plc