The Pennmar (Master Sigmund Charles Krolikowski) straggled from convoy SC-100 due to mechanical difficulties and proceeded toward Cape Farewell for repairs. On 21 Sep 1942, an armed guard was washed overboard and lost while assisting to hand steer from the emergency steering station on the stern. The steering gear mechanism had been broken when a truck had shifted in the heavy seas and rolled against the gear.

At 18.47 hours on 23 September, U-432 fired a stern torpedo at the Pennmar in 58°25N/32°15W, but it was spotted approaching from the starboard quarter and avoided by a hard left rudder. One hour later they saw the U-boat surfacing on the starboard quarter, which was taken under fire from the 4in stern gun. After four rounds were fired the U-boat submerged. At 01.44 hours on 24 September, U-432 fired a spread of four torpedoes and managed to hit the Pennmar with one torpedo on the port side about 30 feet from the bow near the fore peak oil tank. A second torpedo was seen by a lookout to pass under the ship, probably due to heavy seas. The eight officers 31 crewmen and 22 armed guards (the ship was armed with one 4in, one 3in, four 20mm, four .50cal and two .30cal guns) abandoned ship in one lifeboat and two rafts, while the ship began to settle by the bow rapidly sinking after eleven minutes. One man died after being crushed between a raft and the ship and another drowned near the propeller of the ship. The survivors were picked up the same day by USCGC Bibb (WPG 31) and taken to Reykjavik, arriving on 2 October.