Yesterday the bondholders agreed in principle to swap €676m (£434m) of senior notes for 88% of the company's share capital and €75m (£48m) in new convertible bonds.
Jazztel is the London holding company for Madrid-based Jazztel Telecom, which provides telecom services in Spain and Portugal. It joins a group of companies, including Versatel Telecom International and Completel Europe, that are swapping outstanding debt for equity in their companies in an effort to stay afloat.
Jazztel chief eExecutive officer Antonio Carro said in a statement that the move to restructure the company's high-yield debt will save more than €93m (£60m) in yearly cash interest payments.
The company's stock has plunged almost 98% since March.
Like KPNQwest and several other bandwidth service providers, Jazztel miscalculated demand for communication services and continued to invest in building networks despite plunging prices.
According to the market research group Telegeography, less than 4% of long-distance fibre-optic capacity is being used in Europe.