New York, NY (March 2, 2004) -- KPS Special Situations Fund announced today that it has completed the sale of its portfolio company, New Flyer Industries Ltd., to a company formed by Harvest Partners Fund IV, L.P. and The Lightyear Fund, L.P. New Flyer is the largest manufacturer of transit buses in North America.

KPS Special Situations Fund L.P. received proceeds from the New Flyer sale of over $200 million, an amount that exceeds all of the capital drawn by KPS in its Fund I investment campaign.

"The successful turnaround of New Flyer is a testament to the quality and dedication of the company's management and employees," said David Shapiro, a Managing Principal of KPS. "KPS is proud of its successful restructuring of New Flyer into the leading player in its industry and a strong and sustainable company for the future."

Mr. Shapiro continued, "The New Flyer investment is a great example of our investment strategy, working with management and employees to turn a struggling business into a financially stable market leader while also generating a superior return for KPS investors. For KPS Fund I investors, this single transaction guarantees the return of one hundred percent of their original investment in the Fund, plus a profit. The remaining investments held by Fund I now represent incremental profit to its investors."

In March 2002, KPS invested approximately $27.5 million of equity in New Flyer for a controlling interest in the company. The KPS investment was the catalyst for a financial and operating restructuring that involved the support of the company's banks, the Province of Manitoba, the Communications Worker of America (CWA), the Canadian Autoworkers Union (CAW) and the company's key suppliers.