Metaldyne Submits Stalking Horse Bids for Most of Its Powertrain and Chassis Operations

PLYMOUTH, Mich., July 27 -- Metaldyne Corporation said today the U.S. Bankruptcy Court for the Southern District of New York has approved Hephaestus Holdings, Inc. as the stalking horse bidder for most of its Powertrain operations and Revstone Industries LLC as the stalking horse bidder for most of its Chassis operations. The auctions will be held in early August.

Hephaestus Holdings, Inc. (HHI), a portfolio company of KPS Capital Partners LP with other automotive holdings, has submitted a binding proposal for all of Metaldyne's Sintered Products, European Forgings and Vibration Controls Products operations located in Europe, Asia, Brazil, Mexico and the U.S. In addition, HHI, through an affiliate, has agreed to purchase the company's Bluffton, Ind.; Litchfield, Mich., and, subject to certain conditions, the Twinsburg, Ohio, plant. KPS Capital Partners will provide HHI with a significant additional cash investment to support letters of credit and working capital needs of the Powertrain businesses post closing.

HHI, through its Jernberg Holdings Inc., Impact Forge Group Inc. and Kylos Bearing International Inc. subsidiaries, is a leading independent manufacturer of forged parts and wheel bearings for the North American automotive industry.

The final auction date for the Powertrain sale is August 5, 2009. It will be held at the offices of Jones Day at 222 East 41st Street, New York, N.Y. Additional bids for the company's Powertrain operations are due by August 3, 2009.

Revstone, a private equity company, is bidding on the purchase of Metaldyne's chassis operations in Edon, Ohio; Greensboro, N.C.; Barcelona, Spain, and Iztapalapa, Mexico.

The final auction date for the Chassis sale is August 3, 2009. It will also be held at the Jones Day offices at 222 East 41st Street, New York, N.Y. Additional bids for the Chassis business are due by July 31, 2009.

A stalking horse bid is a binding proposal on a bankrupt company's assets from an interested buyer chosen by the bankrupt company. Once the stalking horse is approved by the court other potential buyers may submit competing bids for the bankrupt company's assets.

"I am very pleased we have identified stalking horse bidders for most of our Powertrain and Chassis operations," said Thomas A. Amato, chairman, president and CEO of Metaldyne. "The industrial logic between HHI and Metaldyne Powertrain as well as Revstone and Metaldyne Chassis is sound. The Metaldyne operations being purchased have strong product portfolios, advanced technologies and perform well operationally. We believe they would be strong additions to their businesses.

"It is our plan to sell Metaldyne's operations on a going concern basis. We believe this is the best way to preserve as many jobs as possible, best serve our customers and will allow certain of our operations to emerge from bankruptcy as quickly as possible," Amato said.

At the onset of Metaldyne's bankruptcy process the company said private equity firm RHJ International (RHJI) had submitted a non-binding letter of intent to purchase certain portions of its Powertrain assets while The Carlyle Group, also a private equity company, had submitted a non-binding letter of intent to purchase portions of the Chassis operations. However, as part of the sale process undertaken by Metaldyne's advisors, the bids submitted by HHI and Revstone presented better alternatives than other bids.

"We are pleased to have so much interest in our operations from such well-respected companies," Amato said.

Metaldyne is also seeking buyers for its Balance Shaft Module and its Tubular Products businesses.

Metaldyne is a market leader in balance shaft modules. It has good technology, a diverse customer base and growth potential. It currently supplies components for the fuel-efficient I-4 engine. Balance shaft modules are produced at Metaldyne's plants in Fremont, Ind., and Pyeongtaek, Korea.

The Tubular Products operations are housed at Metaldyne's Hamburg, Mich., plant, which produces fabricated exhaust manifolds and other tube-formed products.

Metaldyne's Balance Shaft Module and Tubular businesses are being marketed by the investment banking firm Donnelly Penman & Partners. Metaldyne's Powertrain and Chassis operations are being marketed by Lazard.

Metaldyne and its U.S. subsidiaries filed voluntary petitions in the United States Bankruptcy Court for the Southern District of New York under Chapter 11 of the U.S. Bankruptcy Code on May 27 primarily as a result of liquidity, excess leverage, and pension and lease costs compounded by the unusually low production volumes in the North American automotive industry. The filing did not include the company's non-U.S. entities or operations. Metaldyne has a $19.85 million debtor-in-possession (DIP) facility in place with agent bank Deutsche Bank AG, New York, but funded by certain of Metaldyne's OEM customers.

"Overall we remain on track both in financial performance and in our divestiture process," Amato said. "I am confident Metaldyne's better performing operations will emerge from bankruptcy quickly. I am very proud of the hard work and commitment of our employees to restructure the company and keep our costs down without sacrificing safety, quality, and customer support."

For access to certain court documents and other information about Metaldyne's Chapter 11 case, please visit www.metaldynerestructuring.com.

About Metaldyne

Metaldyne is a wholly owned subsidiary of Asahi Tec, a Shizuoka, Japan-based chassis and powertrain component supplier in the passenger car/light truck and medium/heavy truck segments. Asahi Tec is listed on the Tokyo Stock Exchange.

Metaldyne is a leading global designer and supplier of metal based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel end and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry.

Headquartered in Plymouth, Mich., Metaldyne had revenues in 2008 of approximately $1.57 billion. Metaldyne employs more than 4,400 employees at 33 facilities in 14 countries. For more information go to www.metaldyne.com.

Forward Looking Statement

This press release contains statements that are not statements of historical fact, but instead are forward-looking statements, as that term is defined by the federal securities laws. We caution readers not to place undue reliance on these forward-looking statements, which reflect management's expectations, estimates and assumptions based on information available as of the date hereof. Important factors that could cause actual results to vary materially from those expressed or implied by the forward-looking statements are set forth in our Annual Report on the Equivalent of Form 10-K for the fiscal year ended March 31, 2008 and our subsequent Quarterly Reports, and include: our high degree of leverage; substantial restrictions in our credit facilities and other debt; declining financial condition of our customers; risks associated with the condition of our suppliers and subsequent availability of product; adequacy of our liquidity to meet our obligations and grow our business; seasonal fluctuations in our business and impact on working capital; our industry's cyclicality and dependence on general economic conditions; inability to achieve profitability given our high degree of leverage and resulting interest expense; affordability of raw materials and components; inability to quickly replace any diminished or lost business due to the length of the sales process; risks related to termination for convenience provisions in certain of our customers' purchase orders and unanticipated cancellation of programs by our customers; risks associated with our parent company being controlled by a Japanese principal stockholder and therefore being subject to the regulatory environment for publicly traded Japanese companies; costs could potentially exceed estimates used in pricing our products; our employee benefit obligations may negatively impact future liquidity; risks related to international sales; inability to protect our intellectual property rights; environmental compliance obligations and liabilities; inability to meet obligations for any product liability and warranty claims; unanticipated labor stoppages at our facilities or those of our customers; general economic conditions in the market sector in which we operate, including continued volume deterioration of our top three customers, changes in interest rates or foreign currency exchanges; impact of the global financial crisis on our business and liquidity; and potential consolidation, loss or insolvency of our customers. We do not intend or assume any obligation to update any of these forward-looking statements.