At 01.57 hours on 25 Aug 1942, U-176 and U-438 (Franzius) simultaneously fired torpedoes at ships in convoy ONS-122 from its starboard bow. Dierksen observed detonations after 1 minute 33 seconds and 1 minute 36 seconds after firing a spread of two torpedoes and Franzius fired one torpedo and observed a detonation after 1 minute 31 seconds and a ship settling by the stern and sinking. Empire Breeze (Master Robert Thomson) in station #41 was hit by two torpedoes in #3 hold and amidships and the Athelprince in station #51 saw a torpedo missing astern of her around the time. Judging from the attack positions and torpedo courses it is clear that only the torpedoes of U-176 had hit and U-438 mistook this success as her own.

The Empire Breeze settled by the stern as the hit hold and engine room flooded and after about 15 minutes the crew abandoned ship in the four lifeboats, one of them destroyed during launch. One crew member had been lost and the third officer was badly injured when blown by the explosion from the bridge into #3 hold, swimming out through the hole made by the torpedo and rescued by one of the boats. Stockport (Master Thomas Ernest Fea, OBE) tried to locate the survivors astern of convoy but thick fog prevented this. The ship remained afloat and the crew reboarded her the next morning, sending distress messages from a repaired radio set. The tug HMS Frisky (W 11) was sent from St. Johns to salvage the vessel with HMCS Rosthern (K 169) (Cdr P.B. Cross, RCNVR) detached from convoy to assist in the salvage of Empire Breeze. During the night of 26/27 August, the Irish steam merchant Irish Willow found the wreck in the fog and picked up the master, 41 crew members and six gunners (the ship was armed with one 4in, one 20mm AA and two twin machine guns), landing them at Dunmore, Ireland on 1 September.

When the crew left Empire Breeze behind on 27 August, the #1 hold was slowly flooding through the bilges and the master thought the ship foundered shortly afterwards in approx. 49°45N/35°10W. The tug and the corvette unsuccessfully searched the area and then set course to St. Johns on 30 August.