KPS Special Situations Funds' Portfolio Company, Hephaestus Holdings, Inc., Announces Sale of Minority Equity Interest to Mitsubishi Corporation

NEW YORK, Oct. 3, 2006 -- KPS Special Situations Funds ("KPS") announced today that its portfolio company, Hephaestus Holdings, Inc. ("HHI"), has sold a minority equity interest to Mitsubishi Corporation ("Mitsubishi"). Financial terms of the transaction were not disclosed.

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

Michael Psaros, Managing Principal of KPS, said, "Mitsubishi is a Limited Partner of the KPS Funds and a key strategic relationship. This is the second transaction involving a KPS portfolio company and Mitsubishi, and its affiliated entities, in the past year. We expect Mitsubishi to add a great deal of value to HHI."

George Thanopoulos, Chief Executive Officer of HHI, said, "HHI is pleased to welcome Mitsubishi as a strategic investor. While we are committed to our existing domestic customer base and value the longstanding relationships we have enjoyed with our core customers, HHI continues to seek opportunities to diversify its customer base. We expect this relationship with Mitsubishi to contribute to the acceleration of our rapidly expanding business with the New Domestic automotive manufacturers in North America, and to the sourcing of our primary raw materials on a global basis."

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: www.kpsfund.com