At 04.28 hours on 21 Oct 1941, U-123 fired a spread of three torpedoes at HMS Aurania (F 28) (A/Capt Ivan Walter Whitehorn, RN), which was travelling zigzagging at 13.5 knots in a group of five armed merchant cruisers behind convoy SL-89 and was hit at the bow and underneath the bridge by two torpedoes. The flooding of #3 hold caused a 25 degree list to port, but empty drums in the other holds kept the ship afloat. The master managed to correct the list to 15 degrees and the ship soon continued on a zigzag course at 8 knots. The U-boat was chased away by an escort.

Due to a misunderstanding, one lifeboat containing six men was launched and swamped upon hitting the water. Gunner Charles Stewart, Able Seamen Cornelius O´Keefe and Abed Graves were picked up by HMS Croome (L 62) (LtCdr J.D. Hayes, RN), but Leading Seamen Bertie Edward Shaw, George R. Brown and Able Seaman Victor A. Pancott were reported missing. At 10.09 hours, U-123 came upon the sinking lifeboat, but only Bertie E. Shaw was left in it and taken as prisoner on board.

On 23 October, HMS Aurania (F 28) arrived at Rothesay Bay under escort by HMS Totland (Y 88) (LtCdr S.G.C. Rawson, RN). The ship was under repair for 19 months and returned to service as repair ship HMS Artifex (F 28).