At 08.00 hours on 15 Oct 1941, U-553 entered convoy SC-48 on the surface from ahead between column 7 and 8 and at 08.15 hours sank the Silvercedar in station #72 with the first torpedo, while the second torpedo fired two minutes later missed the intended target but was observed to hit a ship behind it, a claim that is not confirmed by Allied reports. Due to a misunderstanding, the torpedo data computer was no longer set correctly and the remaining three torpedoes were fired with wrong settings. However, the third torpedo missed its target and hit the Ila in station #74 at 08.23 hours. The U-boat then passed ahead of the British motor merchant Silverelm in station #83, which unsuccessfully tried to ram her and missed this ship with the stern torpedo. Eventually Thurmann fired the last bow torpedo at W.C. Teagle in station #103, missing her due to the wrong settings and passed behind her stern to outrun convoy on its starboard bow. The U-boat had been observed by at least three ships in convoy but they could not open fire due to the danger of hitting other ships and the two corvettes on the starboard side did not spot the enemy.

The Ila (Master Thore K. Johnsen), armed with one 4in and four machine guns, had just evaded wreckage and people in the water from Silvercedar when she was struck on the starboard side amidships by a torpedo and apparently immediately broke in two after a boiler explosion, causing her to sink in less than one minute. There was no time to launch any of the lifeboats and one of the rafts had been destroyed and the other jammed under a davit. Ten survivors kept themselves afloat on wreckage and a capsized lifeboat, but the first engineer soon died of exhaustion. Three of the survivors were rescued by the lifeboat from Silvercedar and were picked up by FFL Mimosa (K 11) (Cdr R.R. Birot, FNFL) at 09.30 hours, which then picked up five more survivors from Ila but one of them shortly thereafter died on board and was buried at sea. HMCS Baddeck (K 147) (T/Lt A.H. Easton, RCNR) then searched the area for 90 minutes and located another survivor on a lifebuoy, unfortunately he died after being rescued and was buried at sea later that day. The master and six crew members were landed in Reykjavik on 20 October.