At 07.52 hours on 20 April 1943, U-565 fired torpedoes at convoy UGS-7 about 60 miles west of Oran and sank the Sidi-Bel-Abbès in station #82 and Michigan in station #81.

The Michigan (Master Birger Jacobsen) was hit by one torpedo between the #1 and #2 holds with a muffled explosion. The blast caused extensive damage to the hull and minor to the deck and superstructure and threw water to the height of the bridge. The ship began to settle rapidly by the bow and lost way immediately. The engines were secured and all eight officers, 29 crewmen, 23 armed guards (the ship was armed with one 4in, one 3in and six 20mm guns) and one passenger abandoned ship in two lifeboats and three rafts within ten minutes. The ship stayed afloat for about one hour before sinking bow first. The survivors were picked up after two hours by HMS Stella Carina (FY 352) (Lt J.V. Lobb, RANVR) and HMS Foxtrot (T 109) (Lt J.B. Bald, RNVR), later transferred to the HMS Felixstowe (J 126) (T/Lt C.G. Powney, RNVR) and landed in Oran. Some of the crew remained in their lifeboats to assist in the rescue of survivors from the other torpedoed ship, which carried Senegalese troops. The crew was later repatriated to New York on the American steam merchant Delnorte.