At 21.57 hours on 14 December 1941 U-108 fired a spread of two G7e torpedoes at the unescorted and neutral Cassequel (Master Sebastião Augusto da Silva) about 160 miles southwest of Cape St. Vincent. One of them was a dud, but the other struck on the port side at the end of the aftermost hold and carried away the rudder and propeller. The 48 crew members and nine passengers (seven men and two women) abandoned ship in four lifeboats in calm seas, shortly thereafter the ship was struck on starboard side at the end of the superstructure by a coup de grâce at 22.25 hours. The explosion ignited the cargo of gasoline, causing a huge ball of fire and the ship to sink immediately after breaking in two. Scholtz reported that the vessel was illuminated but no flags or markings were visible from the distance of 1000 meters in the dark, so he decided to sink her because it was not allowed to stop a suspicious vessel by night. However, the Cassequel had already been stopped by another U-boat, possibly U-127 (Hansmann), in position 36°38N/10°28W at noon the same day and allowed to proceed.

On 15 December, U-131 (Baumann) came across two lifeboats from the Cassequel and provided one of them with bread and water. The survivors asked to be towed to the Portuguese coast, but this was denied. The chief officer and twelve crewmen were picked up by HMS Campion (K 108) (LtCdr A. Johnson, RNVR) in position 34°40N/11°30W at 10.00 hours on 17 December and landed at Gibraltar. 24 crew members and seven passengers in the two boats in charge of the second and third officers were rescued by the Portuguese steam merchant Maria Amélia after being spotted by British aircraft on 17 December and landed at Funchal, Madeira the next day. The eleven crew members and two passengers in the lifeboat of the master were spotted by a Portuguese aircraft about 92 miles off Cape St. Vincent at noon on 19 December, were picked up by the Portuguese destroyer Douro the following morning and taken to Lisbon.