Two New Zealand sailors and their Mexican skipper have been rescued from a liferaft 280km south of Niue after their yacht caught fire just after midnight last night.

The Sunny Deck, a 15m US flagged yacht, was travelling from Rarotonga to Tonga when a fire in the engine compartment engulfed the vessel.

The yacht Sunny Deck was a Bavaria 51, similar to the one pictured, with an after-market centre cockpit.

The two New Zealanders, a 67 and 70-year-old from Hamilton, were asleep when the fire took hold.

The crew had no time to dress or grab any equipment before abandoning the vessel to a liferaft. The 36-year-old skipper, who was on watch, managed to reach the EPIRB - fire had already melted the lanyard attaching it to the vessel.

The German registered EPIRB first alerted the Marine Rescue Coordination Centre in Bremen, which contacted the Rescue Coordination Centre New Zealand with owner's details.

RCCNZ identified ships nearby and the Liberian-flagged container ship MV Cap Capricorn was just over 38km away and requested to divert and provide assistance. The ship arrived on scene just after 3am today, says RCCNZ Search and Rescue Mission Coordinator Dave Wilson.

'When they arrived on scene they saw the glow from the burning yacht and blasted their whistle to attract the attention of any survivors,” says Dave.

After around 30 minutes of searching they saw a distress flare fired in response. The liferaft was located and the ship manoeuvred alongside.

'The three sailors were able to board the ship via the pilot ladder. First aid was provided on board but we understand there are no serious injuries.

'Conditions in the area were not easy, with seas of about 3.5m, and winds of 45km/h,” says Dave.

The yacht's crew were safely on board the MV Cap Capricorn by around 5.15am.

'It was an excellent piece of seamanship to bring a 228m ship alongside a liferaft in these conditions. We'd like to express our appreciation to the Master and the crew of the MV Cap Capricorn for their efforts.

'The crew of the yacht were also well prepared – they had a registered EPIRB, which enabled them to be identified quickly, their liferaft was in good condition, and they had a distress flare to respond when the ship arrived. In the circumstances it was an excellent result.”

The Cap Capricorn is expected in Auckland on Saturday.