Mumbai, July 4 -- Lenders to Vodafone Idea Ltd are worried that the telecom operator which is trying to borrow Rs.35,000 crore more may prioritize paying its government debts over its new bank loans, a person aware of the matter said.

Their concern centres around the company's ability to sustain loan repayments on the proposed loans if Vodafone Idea has to pay the adjusted gross revenue (AGR) dues to the government. The weakest player in India's telecom landscape has been steadily posting losses since FY17.

On 19 May, the Supreme Court rejected petitions from Bharti Airtel Ltd and Vodafone Idea to waive some of the dues linked to their AGR. Vodafone Idea had sought a waiver on interest, penalty, and interest on penalty crossing Rs.45,00...