Between 01.25 and 01.43 hours on 27 Aug 1941, U-557 fired four single torpedoes at convoy OS-4 west of Ireland and reported three ships sunk and another damaged which was hit after the torpedo had missed the intended target. In fact, only Segundo and Saugor were hit and sunk.

The Segundo (Master Karsten B. Wilhelmsen) was struck on the port side at the #2 hold by a torpedo and sank by the bow within seven minutes. The crew stopped the engines and abandoned ship in the starboard lifeboat and the port motor boat and by jumping overboard. After about 30 minutes, HMS Lulworth (Y 60) (LtCdr C. Gwinner, RN) picked up two men from rafts, then 23 survivors from the boats and after a couple of hours another two men hanging on to some debris. The master, five crew members and the female secretary Gudrun Torgersen (the wife of the first mate) were lost.

The first mate Arnt Olav Torgersen was awarded the Lloyds War Medal for bravery at sea. He jumped into the rough sea from a lifeboat in an attempt to rescue two men, but in spite of his desperate efforts they drifted away. He was not able to return to the boat and clung to a hatch cover until he was rescued by the sloop.