KPS Special Situations Funds' Portfolio Company, Jernberg Holdings, Inc., a Subsidiary of Hephaestus Holdings, Inc., Completes $57 Million Recapitalization

Distributes $20 Million Dividend to Stockholders

NEW YORK, July 18 -- KPS Special Situations Funds ("KPS") announced today that Jernberg Holdings, Inc. ("Jernberg"), a subsidiary of its portfolio company Hephaestus Holdings, Inc. ("HHI"), has completed a $57 million recapitalization. The proceeds of the recapitalization were used to refinance Jernberg's debt and fund a $20.0 million dividend distribution to HHI's stockholders. KPS and management continue to own 100% of HHI's common stock following the recapitalization. On July 13, 2006, HHI completed the acquisition of the business and assets of Impact Forge, Impact Forge, Inc. Impact Precision Forge, Inc., Omni Forge, Inc. and related entities. As a result of this transaction, HHI is now the largest independent manufacturer of highly engineered forgings for the North American automotive industry.

Michael Psaros, Managing Principal of KPS, said, "Jernberg's turnaround since we created the business ten months ago is remarkable. As a result of the KPS sponsored turnaround plan successfully executed by George Thanopoulos and his team, the business has transformed into a thriving and profitable enterprise that is strategically positioned and properly capitalized for continued growth. In only ten months after our initial investment, the Company has returned almost all of our cash equity investment to our Limited Partners. By establishing such a successful company, George, his senior management team, and all of Jernberg's employees have created substantial equity value for our Limited Partners. We congratulate them on their accomplishments."

George Thanopoulos, Chief Executive Officer of HHI and Jernberg, said, "This recapitalization is validation that Jernberg has successfully completed its turnaround and has a great future. We are pleased that as a result of the recapitalization, we were able to distribute a significant amount of cash to our stockholders, particularly KPS, who has provided critical support to our business. We thank our customers, suppliers and employees for their contribution to Jernberg's success and look forward to working together to build on our achievements."

KPS formed HHI and its Jernberg subsidiary in September 2005 to purchase substantially all of the assets of Jernberg Industries, Inc., Iron Mountain Industries, LLC and related entities pursuant to a 363 sale of assets under Chapter 11 of the bankruptcy code. KPS invested $23 million of equity to capitalize the new company and retained Mr. Thanopoulos as the Company's new Chief Executive Officer.

Financing for the transaction was provided by LaSalle Business Credit, NA and LBC Credit Partners.

About Hephaestus Holdings, Inc.

Hephaestus Holdings, Inc. ("HHI"), through its Jernberg Holdings, Inc. and Impact Forge Holdings, Inc. subsidiaries, is the largest independent manufacturer of forged parts for the North American automotive industry. Jernberg Holdings, Inc. (http://www.jernberg.com/), manufacturers highly engineered symmetrical forged parts for various power-train and wheel-end applications. Impact Forge Holdings, Inc. (http://www.impactforge.com/) manufactures highly engineered symmetrical and asymmetrical forged parts for transmission, power-train and wheel-end applications. Employing over 1,200 employees, HHI operates eight manufacturing facilities located in the Chicago, Illinois, Indianapolis, Indiana and Coldwater, Michigan vicinities.

About KPS Special Situations Funds

KPS Special Situations Funds are a family of private equity funds with over $600 million of committed capital focused on constructive investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand-alone entities to operate divested assets; and recapitalized highly leveraged public and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. KPS invests its capital concurrently with a turnaround plan predicated on cost reduction, capital investment, and capital availability. Typically, the KPS turnaround plan is accompanied by a financial restructuring of the company's liabilities. The KPS investment strategy and portfolio companies are described in detail at the firm's website: http://www.kpsfund.com/.