The company has placed the vessel in layup while it looks to secure a long-term charter to another cruise operator.
The announcement is the latest in a string of setbacks for the company, which was formed in 2013 when it took over the assets of failed Classic International Cruises (CIC).
Although Portuscale put the Funchal through an extensive refit to turn it into an upscale boutique-style cruiseship, it has struggled to re-establish the vessel in the international market.
