UPDATE 2-Journal Register investor offers $25 mln infusion

(Adds Moody's debt downgrade)

By Robert MacMillan

NEW YORK, May 14 (Reuters) - Battered U.S. newspaper Journal Register Co (JRCO.PK: Quote, Profile, Research, Stock Buzz) may have found a savior to help it stave off default.

Ancora Capital is willing to invest at least $25 million to shore up the struggling newspaper publisher in return for a significant ownership stake, the company disclosed in a filing with U.S. securities regulators on Wednesday.

That would help the company avoid defaulting on its debt and risking bankruptcy.

Getting the money is contingent on Journal Register being able to arrange with its lenders a restructuring of its debt, said Richard Barone, chairman of the Cleveland-based investment firm.

"If the debt can be restructured in such a way that the projected cash flow can cover interest and principal payments, then Journal Register would be able to survive," Barone told Reuters in an interview.

Journal Register owns 22 daily papers in several states, including Ohio, Pennsylvania and Michigan. Its largest paper is the New Haven Register in Connecticut.

The company said last week it risks defaulting on its debt by July 23, barring better second-quarter performance or an amendment to its credit agreement.