At 01.47 hours on 12 July 1942 the Port Hunter (Master John Bentham Bradley), dispersed from convoy OS-33 at 11.00 hours on 11 July, was struck on the port side in #2 hold by one of two torpedoes from U-582 about 370 miles west-southwest of Madeira. The ship had been missed by a first spread of two torpedoes at 01.15 hours. The torpedo ignited the cargo of ammunition and the vessel disappeared after several heavy detonations, which were seen as flashes at the horizon by other ships of the dispersed convoy. A lot of debris was blown into the air and hailed down on the nearby U-boat, forcing it to dive immediately. In the meantime, the ship listed heavily to port and sank within two minutes. The motor launch HMNZS ML-1090 was lost with the vessel. When the U-boat surfaced again after 20 minutes, only burning fuel oil and wreckage were spotted at the sinking position. At daylight, the Germans examined U-582 and discovered that the net deflector had been torn away when hit by a side plate of the steamer, which was found on deck together with parts of guns and ammunition and an anchor chain hanging over both sides. The falling debris had ruptured the deck at several places and opened leaks in a fuel tank, causing a trail of oil for a while.

The master, 68 crew members, 14 gunners and five passengers were lost. Three crew members sleeping on deck had been blown into the water and clung to wreckage of the motor launch until they were picked up at about 08.30 hours by HMS Rother (K 224) (Cdr R.V.E. Case, DSC and Bar, RD, RNR) after being spotted by the British steam merchant City of Windsor from the same convoy.