At 18.44 hours on 26 March 1943 the City of Perth (Master John Blewitt) in station #42 of convoy MKS-10 was hit on the port side by one torpedo from U-77 while steaming at 8.5 knots in fine and clear weather about 52 miles west of Oran. The torpedo struck a few feet forward of the after bulkhead of the deep tank and threw up a big column of water and debris, all hatches and beams were buckled or blown off the deep tank and hold #4. Unable to close the tunnel door the engine room filled with water after the deep tank was flooded and the ship began to settle rapidly by the stern. The crew of 79 men and 13 gunners (the ship was armed with one 4in, one 40mm, four 20mm and two machine guns) abandoned ship in three lifeboats, a fourth could not be launched as it had become unhooked and was hanging in its belly bands. They pulled towards the nearby HMS Man o’ War (FY 104) (T/Lt G.L. Coles, RNVR) which took all survivors aboard, but a roll call showed that two gunners were missing, so a boarding party of seven men led by the master returned to the ship in the motor boat. They discovered one of the missing men seriously injured at the entrance to the well deck and transported him to the trawler, but he later died of wounds.

When the City of Perth remained afloat, another boarding party prepared a tow line and HMS Man o’ War took her in tow at a speed of 4 to 5 knots about two hours after the ship had been torpedoed, screened by HMS MMS-88 (J 588) (Lt J.G. Scott, RNR) and HMS MMS-134 (J 634) (T/Lt D. Hannah, RNVR).The rescue tug HMS Restive (W 39) (Lt D.M. Richards, RNR) was sent from Oran, escorted by HMS Shiant (T 170) (Lt A.C. Elton, RNR) and HMS Inchmarnock (T 166) (T/Lt C.G.V. Corneby, RNR), in order to get the damaged ship to Beni Saf and took over towing of the again abandoned vessel at 06.30 hours on 27 March. The tow convoy proceeded until the City of Perth was beached by the tug after towing her for about 10 hours due to worsening weather south of Cape Figalo, Algeria and became a total loss. All survivors were taken to Gibraltar by HMS Man o’ War and landed there in the afternoon of 28 March.