ABC NACO INC, S-3, 1999-11-05

ABC NACO INC
S-3, 1999-11-05
METAL FORGINGS & STAMPINGS

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As filed with the Securities and Exchange Commission on November 5,
1999.

Registration No. 333-__________

======================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM S-3
Registration Statement
Under
The Securities Act of 1933
__________________________

ABC-NACO INC.
(Exact name of registrant as specified in its charter)

Delaware 36-3498749
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

2001 Butterfield Road, Mark F. Baggio, Vice President,
Suite 502 General Counsel and Secretary
Downers Grove, IL 60515 2001 Butterfield Road, Suite 502
(630) 852-1300 Downers Grove, IL 60515
(Address, including zip code, (630) 852-1300
and telephone number, including (Name, address, including zip code,
area code, of registrant's and telephone number, including
principal executive offices) code, area of agent for service)

__________________________

Please send copies of all communications to:

ROBERT J. REGAN
SCHIFF HARDIN & WAITE
6600 SEARS TOWER
CHICAGO, ILLINOIS 60606
(312) 258-5500
__________________________

Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT.
___________________________

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. /_/

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. /X/

If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. /_/

If this Form is a post effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. /_/

If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. /_/

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
Proposed
Title of Each Class of Amount Maximum Proposed Maximum
Securities to be to be Offering Aggregate Amount of
Registered Registered Price Per Share(1) Offering Price(1) Registration Fee
---------------------- ---------- ------------------ ----------------- ----------------
<S> <C> <C> <C> <C>
Common stock, par value $0.01
per share, and related preferred 674,796 $10.3125 $6,958,834 $1,935
stock purchase rights

(1) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) under the
Securities Act of 1933 based on $10.3125, the average of the high and low prices of the registrant's common
stock on November 3, 1999, as reported in the consolidated reporting system. The value attributable to the
preferred stock purchase rights is reflected in the value attributable to the common stock.
</TABLE>
__________________________

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF
1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.

======================================================================

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SELLING STOCKHOLDER MAY NOT SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION RELATING TO THESE SECURITIES IS EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS
NOT PERMITTED.

SUBJECT TO COMPLETION, DATED NOVEMBER 5, 1999

PROSPECTUS
----------

ABC-NACO INC.

674,796 SHARES OF COMMON STOCK
(INCLUDING RELATED PREFERRED STOCK PURCHASE RIGHTS)

_____________________

Newmetna Limited, a Jersey, Channel Islands company, may sell up
to 674,796 shares of common stock, par value $0.01 per share (together
with the associated preferred stock purchase rights, the "Shares") of
ABC-NACO Inc. a Delaware corporation ("ABC-NACO," "we," "us" and
"our"), as further described in this prospectus. We will not receive
any part of the proceeds from the sale of the Shares.

Our common stock is listed on the Nasdaq National Market System
under the symbol ABCR. On November 4, 1999, the closing sale price
for our common stock (as reported in THE WALL STREET JOURNAL) was
$10.75 per share.

You should read the "Risk Factors" section beginning on page 3
for certain factors relevant to an investment in our common stock.
_____________________

THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAVE THESE
ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

_____________________

We have been advised that sales of the Shares may be made from
time to time by or for the account of Newmetna on the Nasdaq National
Market System, in the over-the-counter market, in private
transactions, through broker-dealers or otherwise. Any such sales
will be made either at fixed prices, at market prices prevailing at
the time of sale, at varying prices determined at the time of sale or
at negotiated prices. Any broker-dealer may either act as agent for
Newmetna or may purchase any of the Shares as principal and,
afterwards, may sell those Shares from time to time in transactions on
the Nasdaq National Market System or in the over-the-counter market at
prices prevailing at the time of sale or at negotiated prices.

_____________________

The date of this prospectus is ___________, 1999.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document we
file at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the SEC at (800)
SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available to the public at the SEC's web site at
http://www.sec.gov.

Our common stock is quoted on the Nasdaq National Market System under
the symbol ABCR, and our SEC filings can also be read at the following
Nasdaq address:

Nasdaq Operations
1735 K Street, N.W.
Washington, D.C. 20006

The SEC allows us to "incorporate by reference" into this
prospectus the information we file with it, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to
be part of this prospectus, and later information that we file with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below:

(1) Our Annual Report on Form 10-K for the fiscal year ended
July 31, 1999;

(2) Our Current Report on Form 8-K relating to the change of our
fiscal year filed with the SEC on September 24, 1999;

(3) The description of the common stock contained in our
registration statement on Form 8-A filed with the SEC on
November 19, 1993, including any amendments or reports filed
for the purpose of updating that description; and

(4) The description of the associated preferred stock purchase
rights contained in our registration statement on Form 8-A
filed with the SEC on October 2, 1995, including any
amendments or reports filed for the purpose of updating that
description.

In addition to the documents listed above, we also incorporate by
reference any future filings we make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (a)
after the date of the filing of this registration statement and before
its effectiveness and (b) until Newmetna has sold all of the
securities to which this prospectus relates or the offering is
otherwise terminated. Our subsequent filings with the SEC will
automatically update and supersede information in this prospectus.

You may request a copy of these filings at no cost, by writing to
or telephoning us at the following address and telephone number:

ABC-NACO Inc.
Shareholder Relations
2001 Butterfield Road, Suite 502

Downers Grove, Illinois 60515
Telephone: (630) 852-1300

You should rely only on the information incorporated by reference
or provided in this prospectus or any prospectus supplement. We have
not authorized anyone else to provide you with different information.
No offer of these securities is being made in any state where the
offer is not permitted. You should not assume that the information in
this prospectus is accurate as of any date other than the date on the
front of this document.

FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this prospectus and in the
documents that we have incorporated by reference into this prospectus
may constitute forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements may relate to, but are not limited to, such matters as
sales, income, earnings per share, return on equity, capital
expenditures, dividends, capital structure, free cash flow, debt to
capitalization ratios, internal growth rates, future economic
performance, management's plans, goals and objectives for future
operations and growth or the assumptions relating to any of the
forward-looking information. These statements generally are
accompanied by words such as "intend," "anticipate," "believe,"
"estimate," "project," "expect," "should" or similar statements. We
caution that forward-looking statements are not guarantees since there
are inherent difficulties in predicting future results, and that
actual results could differ materially from those expressed or implied
in the forward-looking statements. Factors that could cause actual
results to differ include, but are not limited to, the matters set
forth in this prospectus and the documents incorporated by reference
in this prospectus. This section is included pursuant to the Private
Securities Litigation Reform Act of 1995 and with the intention of
obtaining the benefits of the so-called "safe harbor" provisions of
that Act.

RISK FACTORS

IN ADDITION TO THE OTHER INFORMATION INCLUDED AND INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE
FOLLOWING FACTORS BEFORE DECIDING TO INVEST IN SHARES OF OUR COMMON
STOCK.

HIGH LEVERAGE; AMENDMENT TO CREDIT AGREEMENT

We are highly leveraged. As of July 31, 1999, our total
capitalization consisted of approximately 73.7% of debt and
approximately 26.3% of equity. Our management has developed specific
plans to reduce our indebtedness, but we cannot give you any assurance
that we will be successful in reducing our highly leveraged condition.

Recently, we requested, and, as of October 29, 1999, the bank
syndicate group under our revolving credit agreement approved, an
amendment to the credit agreement that will temporarily allow us to
increase our maximum allowable leverage ratio and our maximum allowable
senior leverage ratio under the credit agreement through September 30,
2000.

The degree to which we are leveraged and the restrictions in our
debt instruments (which, among other things, limit our incurrence of
additional debt) may adversely affect our ability to finance our future
operations, to compete effectively against better capitalized competitors
and to withstand downturns in our business or the economy generally.

CUSTOMER CONCENTRATION

Our three largest customers are TTX Company, Trinity Industries,
Inc. and Union Pacific Corp. In fiscal 1999, 1998 and 1997 (our
fiscal year end at such times was July 31), TTX Company accounted for
approximately 16%, 13% and 9% of our net sales, respectively; Trinity
Industries, Inc. accounted for approximately 8%, 6% and 5% of our net
sales, respectively; and Union Pacific Corp. accounted for
approximately 7%, 10% and 12% of our net sales, respectively. Our
five largest customers accounted for approximately 43% of our net
sales in fiscal 1999. We experienced a significant decrease in track
orders from our two largest Class I Railroad customers in fiscal 1999
compared to fiscal 1998, and we cannot predict if, or for how long,
this slowdown in track orders will continue. The loss of, or a
continued significant decrease in, business from any of our larger
customers could have a material adverse effect on our business or
results of operations.

POSSIBLE FLUCTUATING OPERATING RESULTS

Several factors may cause significant fluctuations in our
quarterly operating results. The peak season for installation of
specialty trackwork extends from March through October, when weather
conditions are generally favorable for installation, and, as a result,
net sales of specialty trackwork have historically been more
concentrated in the period from January to June. In addition, a
number of our facilities close for regularly scheduled maintenance in
late summer and late December, which tends to reduce operating results
during those periods. Consequently, the majority of our net sales of
specialty trackwork have historically occurred from January through
July. In addition, transit industry practice with respect to
specialty trackwork generally involves the periodic shipment of large
quantities, which may be unevenly distributed throughout the year.

Demand for railroad products generally fluctuates in response to
overall economic conditions, change in freight traffic and other
factors. In economic downturns, railroads and other customers may
defer expenditures. Reductions in freight traffic may reduce demand
for our replacement products by reducing wear. Railroads,
particularly Class I railroads, can experience operational problems as
a result of heavier traffic demands, which have an unpredictable
impact on railroad expenditures for new and replacement products,
including those we sell.

The flow control industry also fluctuates particularly in
response to economic conditions and changes in oil prices. Our flow
control business or results of operations could be materially
adversely affected during economic downturns or periods of depressed
oil prices.

POSSIBLE WORK STOPPAGES OR LABOR UNREST

We cannot be certain that work stoppages will not occur in the
future or that we will reach new agreements upon expiration of our
union contracts. If we suffer work stoppages or fail to reach new
agreements with our unions, our business or results of operations
could be materially adversely affected. Labor unions represent
approximately 80% of our employees.

POSSIBLE INABILITY TO SATISFY REGULATORY REQUIREMENTS

If we fail to maintain the Association of American Railroads
certifications of our railroad products facilities in North America or
fail to obtain Association of American Railroads certifications of new
facilities or railroad products, our business or results of operations
could be materially adversely affected. The Association of American
Railroads promulgates a wide variety of rules and regulations
governing safety, including, among other things, the design,
performance and manufacture of equipment used on freight cars in
interchange service throughout the North American railroad system.

Countries outside of North America also have regulatory
authorities that regulate railroad safety, freight car design, and the
design, performance and manufacture of components parts for railcars
used on their railroad systems. In addition, certain European
countries founded an organization known as the Union Internationale
des Chemins de Fer, whose function is to promulgate regulations for
safety matters, including the design and manufacture of freight car
equipment which is used in interchange service on European railroad
systems. If we fail to obtain and maintain certifications of our
product offerings within the various countries in which we market
outside of North America or as required by the Union Internationale
des Chemins de Fer, our ability to market and sell railroad products
in those countries could be materially adversely affected.

IMPACT ON FINANCIAL RESULTS OF FOREIGN CURRENCY FLUCTUATIONS

Adverse fluctuations in the value of the U.S. dollar in
comparison to local currencies in the other countries in which we
operate - Canada, Mexico, Portugal and Scotland - may have a negative
impact on our financial results.

YEAR 2000 RISKS

Our principal Year 2000 risks with respect to the completion of
our compliance conversion efforts related to our information
technology and communications systems are:

* Our failure to complete the implementation of "Manage 2000"
integrated software at certain of our facilities on a timely
basis; and

* Our failure to complete the replacement of non-compliant
labor data collection systems on a timely basis.

Our principal Year 2000 risks relating to non-information
technology systems are failures in control systems for significant
machines and equipment or facility systems. Our principal risk in our
relationships with third parties is the failure of third party systems
used to conduct such third parties' business, including customers,
rail suppliers and suppliers of financial and outsourced investor and
employee information and management services. Based on Year 2000
compliance work done to date, we believe our key customers are
currently Year 2000 compliant or will be Year 2000 compliant in all
material respects and that service suppliers will be Year 2000
compliant or can be replaced within an acceptable time frame.

ABC-NACO

We are one of the world's leading suppliers of technologically
advanced products and services to the freight railroad and flow
control industries. We operate in three business segments: Rail
Products, Rail Services and Systems, and Flow and Speciality Products,
and have four technology centers around the world supporting our three
business segments. We hold pre-eminent market positions in the
design, engineering and manufacture of high performance freight
railcar, locomotive and passenger rail suspension and coupler systems,
wheels and mounted wheel sets, and speciality track products. We also
supply freight, railroad and transit signaling systems and services,
as well as highly engineered valve bodies and components for
industrial flow control systems worldwide.

We were incorporated in Delaware in 1987. On February 19, 1999,
we merged with NACO, Inc. ("NACO"), a privately held Delaware
corporation that designed, manufactured and supplied cast steel and
related products for the railroad supply and flow control supply
markets, to create ABC-NACO. Our principal executive offices are
located at 2001 Butterfield Road, Suite 502, Downers Grove, Illinois
60515, and our telephone number is (630) 852-1300. Our common stock
is listed on the Nasdaq Stock Market's National Market System under
the symbol "ABCR."

SELLING STOCKHOLDER

The Shares covered by this prospectus are being offered by or for
the account of Newmetna Limited, a Jersey, Channel Islands company.
Newmetna acquired the Shares in connection with the Reciprocal Share
Sale and Purchase Agreement, dated September 16, 1999 and supplemented
on October 29, 1999, between us and Newmetna. Under that agreement, in
exchange for the Shares, we purchased from Newmetna through our
affiliate, ABC-NACO Europe, Ltd., all of the outstanding capital stock
of Cometna Companhia Metalurgica Nacional, S.A., a Portuguese
company ("Cometna"), that produces products for the freight and
passenger rail industries in Europe. Since 1994, we have been
operating under a strategic alliance agreement with Cometna under
which we have marketed rail products produced by them to the European

freight rail industry. Except as described above, neither Newmetna
nor any of its affiliates has had within the past three years any
material relationship with us or any of our affiliates.

Newmetna owns 674,796 Shares as of the date of this prospectus,
all of which are being offered for sale under this prospectus.
Accordingly, Newmetna will not own any shares of our common stock if
it sells all of the Shares being offered by this prospectus. Under
our agreement with Newmetna, we have agreed to keep the registration
statement in which this prospectus is included effective until such
time as Newmetna may freely sell any unsold Shares in reliance upon
Rule 144(k) under the Securities Act of 1933.

USE OF PROCEEDS

Newmetna will receive all of the proceeds from sales of the
Shares, and we will not receive any proceeds from the sale of Shares.

PLAN OF DISTRIBUTION

We are registering the Shares on behalf of Newmenta. Newmetna,
together with all donees and pledgees selling Shares received from
Newmetna after the date of this prospectus, is referred to in this
section as the "Selling Stockholder." We will pay all costs, expenses
and fees in connection with the registration of the Shares offered by
this prospectus. The Selling Stockholder will pay brokerage
commissions and similar selling expenses, if any, attributable to the
sale of Shares. The Selling Stockholder may sell Shares from time to
time in one or more types of transactions (which may include block
transactions) on the New York Stock Exchange, in the over-the-counter
market, in negotiated transactions, through put or call options
transactions relating to the Shares, through short sales of Shares, or
a combination of such methods of sale, at market prices prevailing at
the time of sale, or at negotiated prices. These transactions may or
may not involve brokers or dealers. The Selling Stockholder has
advised us that it has not entered into any agreements, understandings
or arrangements with any underwriters or broker-dealers regarding the
sale of its Shares, and no underwriter or coordinating broker is
acting in connection with the proposed sale of Shares by the Selling
Stockholder.

The Selling Stockholder may effect such transactions by selling
Shares directly to purchasers or to or through broker-dealers, which
may act as agents or principals. These broker-dealers may receive
compensation in the form of discounts, concessions, or commissions
from the Selling Stockholder and/or the purchasers of Shares for whom
such broker-dealers may act as agents or to whom they sell as
principal, or both (which compensation as to a particular broker-
dealer might be in excess of customary commissions).

The Selling Stockholder and any broker-dealers that act in
connection with the sale of Shares might be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities
Act of 1933, and any commissions received by these broker-dealers and
any profit on the resale of the Shares sold by them while acting as

principals might be deemed to be underwriting discounts or commissions
under the Securities Act of 1933. We have agreed to indemnify the
Selling Stockholder against certain liabilities, including liabilities
arising under the Securities Act of 1933. The Selling Stockholder may
agree to indemnify any agent, dealer or broker-dealer that participates
in transactions involving sales of the Share against certain liabilities,
including liabilities arising under the Securities Act of 1933.

Because the Selling Stockholder may be deemed to be an
"underwriter" within the meaning of Section 2(11) of the Securities Act
of 1933, the Selling Stockholder will be subject to the prospectus
delivery requirements of the Securities Act of 1933, which may include
delivery through the facilities of the New York Stock Exchange pursuant
to Rule 153 under the Securities Act. We have informed the Selling
Stockholder that the anti-manipulative provisions of Regulation M under
the Securities Exchange Act of 1934 may apply to its sale of Shares in
the market.

The Selling Stockholder also may resell all or a portion of the
Shares in open market transaction in reliance upon Rule 144 under the
Securities Act of 1933, provided it meets the criteria and conforms to
the requirements of such Rule.

Upon the Selling Stockholder notifying us that any material
arrangement has been entered into with a broker-dealer for the sale of
Shares through a block trade, special offering, exchange distribution
or secondary distribution or a purchase by a broker or dealer, we will
file a supplement to this prospectus, if required, pursuant to Rule
424(b) under the Act, disclosing (1) the name of the Selling Stockholder
and of the participating broker-dealer(s), (2) the number of Shares
involved, (3) the price at which such Shares were sold, (4) the
commissions paid or discounts or concessions allowed to such broker-
dealer(s), where applicable, (5) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or
incorporated by reference in this prospectus and (6) other facts
material to the transaction. In addition, upon the Selling Stockholder
notifying us that a donee or pledgee intends to sell more than 500
Shares, we will file a supplement to this prospectus.

LEGAL OPINIONS

Schiff Hardin & Waite, Chicago, Illinois, will pass upon the
validity of the Shares offered by this prospectus.

EXPERTS

We have incorporated by reference in this prospectus our audited
financial statements as of July 31, 1999, 1998 and 1997, and for each
of the three years in the period ended July 31, 1999, in reliance on
the audit report of Arthur Andersen LLP, which issued the report as
independent accountants and as experts in auditing and accounting. We
refer you to that report, which includes an explanatory paragraph with
respect to our change in the method of accounting for business process
reengineering costs effective August 1, 1997, and our method of
accounting for start-up costs effective August 1, 1998, as discussed
in Note 2 to the financial statements.

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table indicates the estimated amounts of expenses
to be borne by us in connection with the offering described in this
registration statement:

SEC registration fee . . . . . . . . . . . . . . . $ 1,935
Printing and engraving expenses . . . . . . . . . . 5,000
Accounting fees and expenses . . . . . . . . . . . . 5,000
Legal fees and expenses . . . . . . . . . . . . . . . 10,000
Miscellaneous expenses . . . . . . . . . . . . . . . 3,065
-------

Total . . . . . . . . . . . . . . . . . . . . $25,000
=======

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 102 of the Delaware General Corporation Law (the
"Delaware law") allows a corporation to eliminate the personal
liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except in
cases where the director breached his or her duty of loyalty to the
corporation or its stockholders, failed to act in good faith, engaged
in intentional misconduct or a knowing violation of the law, willfully
or negligently authorized the unlawful payment of a dividend or
approved an unlawful stock redemption or repurchase or obtained an
improper personal benefit. Our restated certificate of incorporation
contains a provision which eliminates directors' personal liability as
set forth above.

Our restated certificate of incorporation and restated by-laws
provide in effect that we shall indemnify its directors and officers
to the extent permitted by the Delaware law. Section 145 of the
Delaware law provides that a Delaware corporation has the power to
indemnify its directors, officers, employees and agents in certain
circumstances. Subsection (a) of Section 145 of the Delaware law
empowers a corporation to indemnify any director, officer, employee or
agent, or former director, officer, employee or agent, who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation), against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with such action, suit or proceeding
provided that such director, officer, employee or agent acted in good
faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, provided that such director,
officer, employee or agent had no reasonable cause to believe that his
or her conduct was unlawful.

Subsection (b) of Section 145 of the Delaware law empowers a
corporation to indemnify any director, officer, employee or agent, or
former director, officer, employee or agent, who was or is a party or

II-1

is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person
acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred in
connection with the defense or settlement of such action or suit
provided that such person acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests
of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to
the extent that the Delaware Court of Chancery shall determine that
despite the adjudication of liability such person is fairly and
reasonably entitled to indemnity for such expenses which the court
shall deem proper.

Section 145 further provides that to the extent that a director
or officer or employee of a corporation has been successful in the
defense of any action, suit or proceeding referred to in subsections
(a) and (b) or in the defense of any claim, issue or matter therein,
he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection
therewith; that indemnification provided by Section 145 shall not be
deemed exclusive of any other rights to which the party seeking
indemnification may be entitled; and the corporation is empowered to
purchase and maintain insurance on behalf of a director, officer,
employee or agent of the corporation against any liability asserted
against him or her or incurred by him or her in any such capacity or
arising out of his or her status as such whether or not the
corporation would have the power to indemnify him or her against such
liabilities under Section 145; and that, unless indemnification is
ordered by a court, the determination that indemnification under
subsections (a) and (b) of Section 145 is proper because the director,
officer, employee or agent has met the applicable standard of conduct
under such subsections shall be made by (1) a majority vote of the
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) if there are no such directors, or
if such directors so direct, by independent legal counsel in a written
opinion, or (3) by the stockholders.

We have in effect insurance policies for general officers' and
directors' liability insurance covering all of our officers and
directors.

Pursuant to an agreement, dated October 29, 1999, between us and
Newmetna, we have agreed to indemnify Newmetna, and Newmetna has
agreed to indemnify us against certain liabilities, including certain
liabilities under the Securities Act of 1933.

ITEM 16. EXHIBITS.

A list of the exhibits filed herewith or incorporated by
reference is set forth in the Index to Exhibits which is incorporated
herein by reference.

ITEM 17. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes:

II-2

(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:

(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
SEC pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective
registration statement; and

(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;

provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement
is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective
amendment by those paragraphs is contained in periodic
reports filed with or furnished to the SEC by the
registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.

(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof.

(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.

II-3

(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(5) That, for purposes of determining any liability under
the Securities Act of 1933, the information omitted
from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of
this registration statement as of the time it was
declared effective.

(6) That, for the purpose of determining any liability
under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to
the securities offered therein, and the offering of
such securities at that time shall be deemed to be the
initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the SEC such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person in the successful defense of
any action, suit or proceeding) is asserted by such director, officer,
or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Downers Grove,
State of Illinois, on this 4th day of November, 1999.

ABC-NACO INC.
(Registrant)

By: /s/ Joseph A. Seher
-------------------------------
Joseph A. Seher
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on November 4, 1999 by the
following persons in the capacities indicated.

SIGNATURE TITLE
--------- -----

/s/ Joseph A. Seher Chief Executive Officer
----------------------------- (Principal Executive Officer)
Joseph A. Seher and Director

* Chairman of the Board of
----------------------------- Directors
Donald W. Grinter

/s/ J. P. Singsank Senior Vice President and Chief
----------------------------- Financial Officer (Principal
J. P. Singsank Financial Officer)

/s/ Brian L. Greenburg Vice President and Corporate
----------------------------- Controller (Chief Accounting
Brian L. Greenburg Officer)

* Director
-----------------------------
Richard A. Drexler

* Director
-----------------------------
Daniel W. Duval

II-5

SIGNATURE TITLE
--------- -----

* Director
-----------------------------
Jean-Pierre M. Ergas

* Director
-----------------------------
James E. Martin

* Director
-----------------------------
George W. Peck IV

* Director
-----------------------------
Willard H. Thompson

________________________

* By: /s/ J. P. Singsank
----------------------------------
J. P. Singsank
Attorney-in-Fact
(Pursuant to Powers of
Attorney filed as Exhibits
to this Registration Statement)

II-6

INDEX TO EXHIBITS

Exhibit
Number Exhibit
------- -------

3.1 Our Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to our
Form 10-Q for our fiscal quarter ended April 30,
1999).

3.2 Our Restated By-laws (incorporated by reference to
Exhibit 3.2 to our Form 10-Q for our fiscal
quarter ended April 30, 1999).

4.1 Our Restated Certificate of Incorporation (see
Exhibit 3.1).

4.2 Our Restated By-laws (see Exhibit 3.2).

4.3 Rights Agreement, dated as of September 29, 1995,
between us and LaSalle National Trust, N.A., as
Rights Agent (the "Rights Agreement")
(incorporated by reference to Exhibit 4.2 to our
Current Report on Form 8-K filed with the SEC on
October 2, 1995 (SEC File No. 0-22906)).

4.4 Amendment No. 1 to the Rights Agreement, dated
November 15, 1996 (incorporated by reference to
Exhibit 4.1 to our Form 10-Q our fiscal quarter
ended October 31, 1996 (SEC File No. 0-22906)).

4.5 Amendment No. 2 to the Rights Agreement, dated
September 17, 1998 (incorporated by reference to
Exhibit 4.1 to our Form 8-A/A filed with the SEC
on September 24, 1998 (SEC File No. 0-22906)).

5.1 Opinion of Schiff Hardin & Waite.

23.1 Consent of Arthur Andersen LLP.

23.2 Consent of Schiff Hardin & Waite (contained in
their opinion filed as Exhibit 5.1).

24.1 Power of Attorney for Donald W. Grinter.

24.2 Power of Attorney for Richard A. Drexler.

24.3 Power of Attorney for Daniel W. Duval.

24.4 Power of Attorney for Jean-Pierre M. Ergas.

24.5 Power of Attorney for James E. Martin.

24.6 Power of Attorney for George W. Peck IV.

24.7 Power of Attorney for Willard H. Thompson.

EXHIBIT 5.1
-----------

[Schiff Hardin & Waite Letterhead]

November 5, 1999

ABC-NACO Inc.
2001 Butterfield Road
Suite 502
Downers Grove, Illinois 60515

RE: ABC-NACO INC. REGISTRATION STATEMENT ON FORM S-3

Ladies and Gentlemen:

We have acted as counsel to ABC-NACO Inc., a Delaware
corporation (the "Company"), in connection with the filing of a
Registration Statement on Form S-3 (as it may be amended from time to
time, the "Registration Statement") with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the
"Act"). The Registration Statement relates to the registration under
the Act of 674,796 shares of Common Stock, $.01 par value per share,
of the Company, and the related Series A Junior Participating
Preferred Stock Purchase Rights associated therewith (collectively,
the "Shares"). The Shares are being offered for the account of a
selling stockholder of the Company as set forth in the Registration
Statement and the Prospectus contained therein (the "Prospectus").

In this connection we have examined such documents and have
made such factual and legal investigations as we have deemed necessary
or appropriate for the purpose of this opinion.

Based upon the foregoing, it is our opinion that the Shares
have been validly authorized and are legally issued, fully paid and
non-assessable.

We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name under
the caption "Legal Opinions" in the Registration Statement, the
Prospectus and in any amendment or supplement thereto. In giving such
consent, we do not believe that we are "experts" within the meaning of
such term used in the Act or the rules or regulations of the
Securities and Exchange Commission issued thereunder with respect to

any part of the Registration Statement, including this opinion as an
exhibit or otherwise.

Very truly yours,

SCHIFF HARDIN & WAITE

By: /s/ Robert J. Regan
-------------------------------
Robert J. Regan

EXHIBIT 23.1
------------

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report dated September 2, 1999 included in ABC-NACO Inc.'s Form 10-K
for the year ended July 31, 1999 and to all references to our Firm
included in this registration statement.

/s/ Arthur Andersen LLP

Chicago, Illinois
November 5, 1999

EXHIBIT 24.1
------------