At 11.56 hours on 17 Jan 1940, U-25 spotted two steamers 6-7 miles north of Muckle Flugga, Shetland Isles and fired one torpedo at 12.35 hours that missed the first ship, the Enid (Master Wibe). Ten minutes later, another torpedo was fired at the second ship, the Polzella, which was hit near the bridge and sank in 12 seconds with the loss of all men. The Norwegian ship went to her assistance and the order was given to lower the boats, but the U-boat surfaced and fired a shot across the bow to stop her. When the ship turned away they opened fire and after three shots the crew abandoned ship in two lifeboats. Then the U-boat fired 21 rounds from the deck gun and hit seven times, setting her on fire. At 14.10 hours, a coup de grâce was fired that broke the ship in two. The forepart sank immediately while the burning stern remained afloat and was later scuttled by HMS Firedrake (H 79) (LtCdr S.H. Norris, DSC, RN) which was sent to the area to hunt for the U-boat together with HMS Fortune (H 70) (Cdr E.A. Gibbs, DSO, RN) and several A/S-trawlers.

Eight survivors in one lifeboat made landfall after 3 hours at Burra Firth on Unst. The master and seven crew members were picked up by the Danish motor merchant Kina and taken to Las Palmas, arrving on 23 January.