At 02.45 hours on 25 Aug 1940, U-48 attacked convoy HX-65A 90 miles east by north of Flannan Isles and hit the Athelcrest in station #13 and the Empire Merlin in station #15 with one torpedo each, claiming two ships totaling 14,000 grt sunk.

The Athelcrest (Master Llewellyn V.F. Evans) was struck on the port side between bunker and boiler room by one G7e torpedo and caught fire after an internal explosion with flames enveloping the poop, the main deck and bridge. The ship stopped at once and slowly settled by the stern until only 20 feet of her bow was visible over the water. 29 crew members and one gunner (the ship was armed with one 12pdr and one 4in gun) were lost. The master and five crew members managed to launch two lifeboats in the heavy swell, but suffered from oil and sulphur fumes from Empire Merlin. They were picked up after 4 hours by HMS Godetia (K 72) (LtCdr G.V. Legassick, RNR), which scuttled the wreck of the tanker with gunfire and later landed the survivors at Rosyth.