SHS Holdings (SGX:566) said its recently acquired subsidiary, Nanning Tidal Aluminium, is involved in a legal dispute in China with a construction vendor over alleged unpaid progress payments of 113.9 million yuan.

The vendor, who ceased work on the ongoing 203 million yuan project, initiated legal action, according to a Friday filing with the Singapore bourse.

SHS intends to contest the claim, citing a supplemental agreement, and is considering a counterclaim for breach of contract.

The dispute stems from events prior to the acquisition and is not expected to materially impact the group's net assets, said the company.